PART 1: OPERATION GLADIO:THE UNHOLY ALLIANCE BETWEEN THE VATICAN,CIA AND THE MAFIA

I know what you're thinking. 

The author of this book must be a Baptist. 

It's a common assumption. 

Most Welsh people are Baptists and Williams is a Welsh name. 

But names are deceptive. 

I was born and raised a Roman Catholic. My parish was St. John the Baptist Church in West Scranton, where I learned by rote the Baltimore Catechism and sang “Panis Angelicus” with the choir. I wrote “JMJ” (Jesus, Mary, and Joseph) on the right hand corner of my composition papers, went to confession every Saturday afternoon, and received Holy Communion at Sunday Mass. I participated in all the rites and rituals—the Forty Hour Devotion to the Blessed Sacrament, the recitation of the litanies to the saints, and the yearly novenas at St. Ann's Basilica. 

In those Tridentine days, the liturgy was in Latin, which gave the Mass a sense of timelessness and the assurance that the teachings of Holy Mother Church were semper eadem—“always the same”— binding the generations in one system of belief. 

I had my throat blessed on the feast of St. Blaise and my forehead anointed with ashes on the first day of Lent. I wore a St. Christopher's medal and a scapular. I fasted and abstained on the days appointed and received all the sacraments, save Holy Orders and Extreme Unction. 

As a graduate student at Drew University, my mentor was Fr. Gabriel Coless, an Augustinian monk, who provided rigorous instruction in the Patristics and Medieval Latin. After receiving my doctorate, I taught religion and the humanities at the University of Scranton, a Jesuit institution, and served as the editor of the annual proceedings of the Fellowship of Catholic Scholars. I also penned a number of articles on Vatican II and the effects of aggiornamento for National Review, where I met William Buckley, the celebrated CIA spook. 

I encountered the wrath of Rome while writing Everything You Always Wanted to Know about the Catholic Church for Doubleday. Doubleday, at that time, was a publishing outlet for the Catholic Church through its imprint, Image Books, and an imprimatur was considered a prerequisite for publication. My clerical overseers found no fault with my handling of the evolution of doctrine and the matter of the pontiffs who later were decried as heretics. The problem arose with the subject of the Church's “temporalities.” I was told to expunge all references to the Vatican Bank, including the donation of Mussolini, the Ambrosiano affair, and the P2 scandal. These topics had garnered headlines throughout the world and to exclude them from a book with a tell-all title would be an act of obsequiousness that bordered on cowardice. I refused to make the suggested cuts and was supported in my decision by Patricia Kossman, my intrepid editor. In 1990, the work was published by Doubleday without a nihil obstat—the declaration that nothing about the work is contrary to the faith—despite the fact that it contained no canonical errata. 

In subsequent years, I probed deeper into the affairs of Vatican, Inc., during my tenure as the editor and publisher of the Metro, and as a consultant (CI-9) for the FBI. My findings, including the ties between the Vatican and Gambino crime family, constituted the core of The Vatican Exposed: Money, Murder and the Mafia, which was published by Prometheus in 2001. 

For the past fourteen years, I have been engaged in combing all available government records regarding the Vatican, the CIA, and the Mafia. The task has been grueling, since most of the files— even the files of Pope Paul VI, Michele Sindona, Roberto Calvi, Archbishop Paul Marcinkus and other individuals long dead—remain classified; any disclosure of their contents would represent a threat to “national security.” Fortunately, enough information has come to light in recent years that readers can obtain a complete account of the unholy alliance of Gladio. 

Am I still a Catholic? 

Suffice it to say, anyone who attempts to come to terms with the facts presented in these pages will have his faith in Holy Mother Church compromised, if not shattered.

Leading Rogues

Allen Dulles—Swiss director of the OSS who became the director of the CIA in 1953 

William “Wild Bill” Donovan—executive director of the OSS and chairman of the World Commerce Corporation 

Reinhard Gehlen—Nazi general who commanded the “werewolves,” the first Gladio unit 

James Jesus Angleton—commander of the secret counterintelligence unit of the OSS Junio Valerio Borghese—leader of Decima Mas and commander of the Gladio units in Italy 

Paul E. Helliwell—OSS official, director of Sea Supply, Inc., and the president of the Castle & Trust Bank 

Charles “Lucky” Luciano—American Mafioso, agent of the ONI, and kingpin of the international heroin trade 

Monsignor Giovanni Montini (Pope Paul VI)—Vatican undersecretary of state who introduced the OSS to the Sicilian Mafia 

Don Calogero Vizzini (“Don Calo”)—Sicilian capo who took part in Operation Husky and the creation of the heroin network 

Vito Genovese—Lucky Luciano's right-hand man in charge of heroin distribution throughout the United States 

Eugenio Pacelli (Pius XII)—Roman pontiff who formed an alliance with the CIA 

Cardinal Francis Spellman—leader of the Sovereign Order of the Knights of Malta and CIA operative 

William Colby—Vatican insider, legal consul at Nugan Hand bank, and future director of the CIA 

Michele Sindona—nexus between the CIA, the mob, and the Vatican 

Licio Gelli—grand-master of P2 and director of the “strategy of tension” 

Alparslan Türkeş—leader of Turkey's National Action Party and its paramilitary youth group, the Grey Wolves. 

Giulio Andreotti—prominent P2 member and Italy's prime minister 

Giuseppe Santovito—head of SISMI 

David Kennedy—Sindona's partner, chairman of Continental Illinois, and secretary of the Treasury under Richard M. Nixon 

Monsignor Paul Marcinkus—cleric from Cicero, Illinois, who became the head of the IOR 

Theodore Shackley—CIA operative who set up the heroin trade in Southeast Asia and played a part in the attempted assassination of John Paul II 

Roberto Calvi—head of Banco Ambrosiano who set up the Vatican shell companies 

Henry Kissinger—former US secretary of state and a master geopolitical strategist 

Fr. Felix Morlion—former OSS official, founder of the Pro Deo intelligence agency in Rome 

Michael Ledeen—US intelligence official who worked closely with P2 and CSIS 

Zbigniew Brzezinski—former National Security Advisor and master geostrategist 

Juan Perón—thrice-elected president of Argentina with close ties to Licio Gelli and P2 

Fr. Jorge Mario Bergoglio (Pope Francis)—Jesuit Provincial-General in Argentina, complicit in Operation Condor 

David Rockefeller—founder of the Trilateral Commission and CEO of Chase Manhattan Bank 

Cardinal John Cody—archbishop of Chicago and CIA operative 

Cardinal Karol Wojtyła (Pope John Paul II)—archbishop of Krakow, who came to preside over the greatest scandals within the Roman Church since the time of the 

Borgias Abdullah Çatlı—vice chairman of the Gray Wolves and assassin for the CIA 

Mehmet Ağca—assassin for the babas who made the attempted hit on Pope John Paul II 

Alexander de Marenches—leader of the Safari Club and director of the French secret service 

Francesco Pazienza—second in command at SISMI and a CIA operative 

Claire Sterling—CIA spinmaster/journalist 

Enrico De Pedis—leader of Banda della Magliana 

Salvatore Inzerillo—godfather of the Gambino-Inzerillo-Spatola crime family 

Gulbuddin Hekmatyar—Afghan warlord, CIA operative 

Fethullah Gülen—Muslim preacher dedicated to the formation of a New Islamic World Order

CHRONOLOGY

June 1942—Pius XII creates the Vatican Bank; Lucky Luciano is recruited by ONI 

April 1943—Operation Husky 

Feb. 1945—Fort Hunt Conference (formation of Gladio) 

April 1945—Angleton and Borghese establish Italian stay-behind units 

Oct. 1946—Luciano hosts Havana conference 

Sept. 1947—CIA is established 

Nov. 1947—Heroin comes to Harlem; PCI makes monumental election gains 

Jan. 1948—Vatican receives $65 million in “black funds” 

Jan. 1951—CIA develops drug trade with KMT 

Fall 1953—Operation Mockingbird 

Jan. 1955—Establishment of Catholic Gladio 

Fall 1956—Gelli serves as CIA's liaison to Italian military intelligence 

Oct. 1957—Hotel des Palmes gathering; Sindona becomes mob financier; Apalachin Conference 

Nov. 1957—Creation of Fasco AG with CIA funds 

Sept. 1958—Vito Genovese goes to jail 

Jan. 1959—P2 lodges pop up on NATO bases 

Feb. 1960—Gladio mounts first coup in Turkey 

Jan. 1962—Helliwell forms Castle Bank and Trust 

Oct. 1962—“Strategy of tension” gets underway with the murder of Enrico Mattei 

May 1963—Vatican is bugged 

June 1963—Gelli knighted by Paul VI 

Fall 1963—Piano Solo 

Jan. 1964—Sindona joins P2 

April 1968—Medellin Conference; Msgr. Paul Marcinkus becomes IOR secretary 

Spring 1968—Shackley meets Trafficante in Saigon 

Jan. 1969—“Years of lead” begin 

May 1969—Sindona anointed “pope's banker” 

Fall 1969—Operation Condor 

Dec. 1969—Piazza Fontana bombing 

Jan. 1970—CIA establishes MIT in Turkey 

Dec. 1970—Golpe Borghese 

Jan. 1971—CIA funds Opus Dei; Vatican establishes first shell company 

May 1971—Peteano attack 

Fall 1972—BCCI set up in Karachi; Nixon approves Sicilian coup 

July 1973—David Rockefeller forms Trilateral Commission June 1974—Brescia bombing 

Aug. 1974—Attack on the Italicus; collapse of Franklin National Bank 

Sept. 1974—Collapse of BPF 

April 1975—Fall of Saigon 

May 1975—Church Committee 

Fall 1975—Banzer Plan 

March 1976—Dirty War begins in Argentina 

Sept. 1976—Henry Kissinger forms the Safari Club 

Oct. 1977—Conference at Hotel Vitosha 

Winter 1977—CIA funds Hekmatyar and other “holy warriors” to cultivate Afghan poppy fields 

Sept. 1978—Death of John Paul I 

March 1979—Assassination of Carmine Pecorelli 

July 1979—Assassinations of Giorgio Ambrosoli and Boris Giuliano 

Dec. 1979—Soviet invasion of Afghanistan 

Aug. 1980—Bologna bombing 

Sept. 1980—Coup in Turkey 

Fall 1980—Gelli and George H. W. Bush plan October Surprise; CIA forms partnership with Honduran drug lords 

March 1981—P2 exposed; Solidarity strike 

May 1981—Attempted assassination of John Paul II 

May 1981—Killing of Salvatore Inzerillo 

Sept. 1981—Vatican issues “letter of patronage” 

Fall 1981—Mena, Arkansas, becomes cocaine hub 

Dec. 1981—Martial law in Poland 

May 1982—General Alberto Dalla Chiesa is murdered 

June 1982—Collapse of Banco Ambrosiano; Calvi hangs from Blackfriars Bridge 

Nov. 1982—Raid on Stibam 

June 1983—Emanuela Orlandi kidnapping 

Nov. 1983—Henri Arsan dies in jail cell 

March 1986—Sindona is poisoned in prison 

Feb. 1987—Arrest warrant for Archbishop Marcinkus 

April 1989—Kerry Commission 

Nov. 1990—European Parliament condemns Gladio 

May 1996—William Colby's mysterious end 

Nov. 1996—Susurluk incident 

Sept. 1998—Gülen comes to Pennsylvania 

Aug. 2001—Creation of AKP in Turkey 

Oct. 2001—US-led invasion of Afghanistan 

Nov. 2002—Andreotti receives guilty verdict 

April 2012—IOR fails transparency test 

March 2013—Bergoglio becomes Francis I 

April 2014—Canonization of John Paul II

LIST OF ABBREVIATIONS

AIUC—American International Underwriters Corp.—Insurance company owned by C. V. Starr, which later became the company AIG 

AKP—Adalet ve Kalkinma—Turkey's Justice and Development Party 

ANSA—Agenzia Nazionale Stampa Associata—Italy's leading news wire service 

ASALA—Armenian Secret Army for the Liberation of Armenia 

AV—Avanguardia Nazionale—National Vanguard—Italian right-wing terror group 

BCCI—Bank of Credit and Commerce International 

BND—Bundesnachrichtendienst—Germany's overseas intelligence agency 

BNDD—Bureau of Narcotics and Dangerous Drugs—precursor of the DEA 

BPF—Banca Privata Finanziaria—Bank of Private Finance—first bank owned by Sindona 

CAT—Civil Air Transport 

CDP—Christian Democratic Party 

CFR—Council on Foreign Relations 

CIA—Central Intelligence Agency 

CIC—Counter-Intelligence Corps—precursor to the CIA 

CIG—Central Intelligence Group—another precursor to the CIA 

CSIS—Center for Strategic and International Studies 

CSS—Committee for State Security—Bulgarian secret service 

DEA—US Drug Enforcement Agency 

ENI—Ente Nazionale Idrocarburi—Italy's National Hydrocarbons Authority 

ESMA—Escuela Superior de Mecánica de la Armada—Argentina's Navy Petty Officers’ School of Mechanics; used as a detention center 

FBI—Federal Bureau of Investigation 

FBN—Federal Bureau of Narcotics 

FN—Fronte Nazionale—National Front—Italian right-wing terror group 

FOIA—Freedom of Information Act 

IGS—Chilean Institute for General Studies—Opus Dei think tank. 

IOR—Istituto per le Opere di Religione—Institute for the Works of Religion—The Vatican Bank 

IRA—Irish Republican Army 

ISI—Pakistan's Inter-Services Intelligence 

KGB—Komitet gosudarstvennoy bezopasnosti—Soviet intelligence service 

KMT—Kuomintang—National Chinese Army 

MAR—Movimento d'Azione Rivoluzionaria—Revolutionary Action Movement—Italian right-wing terror group 

MIT—Milli Istihbarat Teskilati—Turkey's National Intelligence Organization 

MPM—Movimiento Peronista Montonero—Argentine leftist urban guerrilla group 

MSI—Movimento Sociale Italiano—Italy's National Socialist Movement 

NAR—Nuclei Armati Rivoluzionari—Armed Revolutionary Nuclei—right-wing terror group 

NATO—North Atlantic Treaty Organization 

NSC—National Security Council 

ON—Ordine Nuovo—New Order 

ONI—Office of Naval Intelligence 

OSS—US Office of Strategic Services 

P2—Propaganda Massonica Due—Licio Gelli's Masonic lodge 

PCI—Partito Comunista Italiano—Italian Communist Party 

PKK—Partiya Karkerên Kurdistan—Kurdistan Workers’ Party 

PLO—Palestine Liberation Organization 

RICO—Racketeer Influenced and Corrupt Organizations Act 

SCI—Secret Counterintelligence—a unit of the OSS. 

SDECE—Service de Documentation Extérieure et de Contre-Espionnage—France's External Documentation and Counter-Espionage Service 

SID—Servizio Informazioni Difesa—Information Defense Service—Italian intelligence agency, later split into SISDE and SISMI 

SIFAR—Servizio Informazioni Forze Armate—Italy's Armed Forces Information Service 

SISDE—Servizio per le Informazioni e la Sicurezza Democratica—Italy's domestic intelligence service 

SISMI—Servizio per le Informazioni e la Sicurezza Militare—Italy's Military Information and Security Service 

SMOM—Sovereign Military Order of Malta 

SS—Schutzstaffel—“Protection Squadron” of the Third Reich 

SSU—Strategic Services Unit—American intelligence agency existing between the OSS and CIA TD-BDJ—Technischer Dienst des Bundes Deutscher Jugend—Technical Service Branch of the League of German Youth 

TIR—Transport Internationaux Routiers—International Road Transport 

UBS—Union Bank of Switzerland 

WCC—World Commerce Corporation—a CIA arms-for-drugs front

Watch out for false prophets. They come to you in sheep's clothing, but inwardly they are ferocious wolves. By their fruits you will recognize them. Do people pick grapes from thorn bushes, or figs from thistles? Likewise every good tree bears good fruit, but a bad tree bears bad fruit. A good tree cannot bear bad fruit, and a bad tree cannot bear good fruit. Every tree that does not bear good fruit is cut down and thrown into the fire. Thus, by their fruits you will recognize them. Not everyone who says to me, “Lord, Lord,” will enter the kingdom of heaven, but only he who does the will of my Father who is in heaven. Many will say to me on that day, “Lord, Lord, did we not prophesy in your name, and in your name drive out demons and perform many miracles? Then I will tell them plainly, “I never knew you. Away from me, you evildoers!” 

Matthew 7: 15–23

CHAPTER 1

THE STAY BEHIND UNITS

The Association for Responsible Dissent estimates that by 1987, six million people had died as a result of CIA covert operations. Former State Department official William Blum correctly calls this an “American Holocaust.” The CIA justifies these actions as part of its war against communism. But most coups do not involve a communist threat. Unlucky nations are targeted for a wide variety of reasons: not only threats to American business interests abroad, but also liberal or even moderate social reforms, political instability, the unwillingness of a leader to carry out Washington's dictates, and declarations of neutrality in the Cold War. Indeed, nothing has infuriated CIA Directors quite like a nation's desire to stay out of the Cold War. 

Steve Kangas, “A Timeline of CIA Atrocities,” 1994 

“We're fighting the wrong enemy.” Allen Dulles, the Swiss director of the US Office of Strategic Services (the OSS), came to this conclusion at the close of 1942, when the German infantry remained mired in the mud and snow of the Russian steppes. He had received word via Vatican messengers from Schutzstaffel (SS) chief Heinrich Himmler and Walter Schellenberg, head of the Sichterheitsdienst (the SS foreign intelligence service), that the Nazi government wished to establish a separate peace with the United States. Such reconciliation would enable the Third Reich to turn its undivided attention to pulverizing the Soviets. When Dulles expressed his openness to discuss the proposal, the German High Command sent Prince Max von Hohenlohe, a Prussian aristocrat and businessman, to meet with him in Bern.1 Hohenlohe was surprised to learn that Dulles not only endorsed the Nazi proposal, but also maintained that a strong Germany was necessary as a bulwark against Bolshevism, the Leninist branch of the Communist Party that had seized control of Russia in 1917.2 

SEEING RED 

William (“Wild Bill”) Donovan

In a series of communiques with William (“Wild Bill”) Donovan, the O.S.S chief in Washington, Dulles expressed his eagerness to pursue the peace negotiations, believing that the Soviets posed a far greater threat to the United States and to the stability of the Western world than the Nazis.3 The Soviets, Dulles maintained, committed acts of genocide that far surpassed the pogroms of the Third Reich. They endorsed a godless ideology that called for world revolution and the collapse of capitalism. They believed that human history was governed by the process of dialectical materialism, the idea that any current economic order would always give rise to its opposite, a process that would terminate in the creation of a “stateless state”—built on the common ownership of goods and property. Dulles had problems with the Nazis—their goal of a thousand-year Reich and their division of mankind into übermenschen and untermenschen. But the Nazis were Christians; they retained a Hegelian sense of history, which explained the rise and fall of governments in terms of a spiritual process; and they shared with Americans a common Western heritage. Even more importantly, the Nazis believed in capitalism and the right of private property. They even had minted the word reprivatisierung (reprivatizing) for their policy of restoring to their former owners the properties that had been seized by the government, a policy that went against the leftist trends that were spreading throughout Europe. 

THE GREAT SEDUCER 

Allen Dulles

A scion of the Eastern Establishment in the United States, Dulles came from a distinguished family of political dignitaries. John W. Foster, his maternal grandfather, had served as secretary of state under Benjamin Harrison, and Robert Lansing, his uncle by marriage, had been Woodrow Wilson's secretary of state. A tweedy, pipe-smoking corporate lawyer, Dulles, with his snake-like charm and Machiavellian ambition, had been credited with seducing over one hundred women, including Claire Booth Luce, the wife of Henry Luce, founder of Time and Life; and Queen Frederika of Greece.4 

Dulles entered the diplomatic service in 1916 and was stationed in Vienna and later Bern. From 1922 to 1926, he served as the chief of the Near East Division of the US State Department. He left this post to join the Wall Street law firm of Sullivan and Cromwell, where his brother John Foster Dulles was a partner. Sullivan and Cromwell floated bonds for Krupp AG, the German arms manufacturer, and managed the finances of IG Farben, the German chemical conglomerate that manufactured Zyklon B, the gas that would be used to murder millions of Jews.5 

In addition to his law practice, Allen Dulles was elected in 1927 as the first president of the Council on Foreign Relations (C.F.R), an organization of high-ranking government officials, wealthy industrialists, and prominent bankers. The purpose of the C.F.R was to engineer a US foreign policy of interventionism in order to “make the world safe for democracy.”6 His ties to this organization would have a profound effect on the undertakings of Operation Gladio. 

GEHLEN'S GUERRILLAS 

Having established contact with Hitler's High Command, Dulles conducted meetings in Bern with Nazi General Reinhard Gehlen, the head of German military intelligence. Gehlen was a stiff, unassuming man with sparse blond hair, a toothbrush mustache, and ears that stuck out of his head like radar antennas. Knowing that the defeat of the Third Reich was inevitable, he had concocted the idea of forming clandestine guerrilla squads composed of Hitler youth and die-hard fascist fanatics, as “stay-behind units” These units, Gehlen informed Dulles, would serve as a police force to ward off a postwar Soviet invasion.7 The Nazi general referred to the members of his secret army as “werewolves”—individuals who would function as ordinary citizens by day and Communist-killers by night. Each werewolf unit, Gehlen said, had access to buried depots of food, radio equipment, weapons, and explosives.8 

Believing the Soviets planned a takeover of Germany and Western Europe at the conclusion of the war, Dulles became convinced that the OSS must reach out to these stay-behind armies in order to supply them with tactical and strategic assistance. This task, he informed Donovan and the OSS top brass in Washington, could be accomplished through Gehlen and SS General Karl Wolff, another Nazi Dulles had become friends with. 

THE ARYAN IDEAL 

Wolff conformed to the Aryan ideal: six feet tall, blond hair, blue eyes, and a high forehead. He was commissioned as an SS-Sturmführer in February 1932. Five years later, he was third in command of the entire SS. His principal assignment was the arrangement of transportation of Jews to concentration camps. Wolff excelled at this task to such a degree that he was later charged with complicity in the murder of three hundred thousand men, women, and children. In 1942, as a reward for his service, Wolff was appointed by Hitler to serve as the SS adjutant to Mussolini and the Italian government.9 

Along with securing and fortifying the werewolves, Dulles busied himself with arranging the separate peace with the Nazis that would exclude the Soviet Union. This undertaking became known as Operation Sunrise. The separate peace should be signed without delay, Dulles informed Donovan, since it would allow the Wehrmacht (the combined armed forces of Nazi Germany) to deploy three divisions from northern Italy to the eastern front, where they could combat the Red Army.10 When Stalin became aware that such negotiations were underway, he went ballistic, accusing his US allies of bad faith and betrayal. President Franklin D. Roosevelt responded that such accusations were “vile misrepresentations” of actuality.11

THE FORT HUNT CONFERENCE 

The worst fears of Allen Dulles for the postwar period began to materialize in February 1945, when the leaders of the Big Three—the United States, Great Britain, and the Soviet Union—met at Yalta on the Black Sea to redraw the map of Europe. The eastern border of Germany was moved westward to the Oder and Neisse Rivers and parts of eastern Poland were handed over to the Soviets. What remained of Germany was to be divided into four zones of occupation, which would be administered by a council of military generals, including the French.12 

As soon as the ink dried on the Yalta agreement, Dulles transported Gehlen and his top representatives to Fort Hunt, Virginia, where they were wined and dined by Donovan and other US officials. An agreement was reached. Gehlen would return to Germany under US protection to establish the Gehlen Organization, which would receive full funding from US Army G-2 (intelligence unit) resources. The primary purpose of this organization would be the maintenance of the existing stay-behind armies and the recruitment of new guerrilla soldiers from the ranks of Third Reich veterans with staunch anti-Communist credentials.13 These soldiers would no longer be known as werewolves. They were to be known as “gladiators,” and they would be commissioned to ward off Communist invaders in the great theater of postwar Europe. The operation in which they were engaged was to be known as Gladio, after the short swords Roman gladiators used to kill their opponents.

POETRY AND PARANOIA 

James Jesus Angleton

Dulles was not the only O.S.S officials involved in establishing stay-behind units. He was aided by James Jesus Angleton, one of the strangest spooks to emerge from the shadow world of the US intelligence community. A tall figure of spectral thinness, with owlish glasses, Angleton was a rabid anti-Communist, an ardent Anglophile, and a devout Roman Catholic. He bred orchids, wore a black homburg, and drank bourbon for breakfast. A graduate of Yale, Angleton possessed a gift for poetry and had established close friendships with Ezra Pound, E. E. Cummings, and T. S. Eliot. Fluent in several languages, including German and Italian, he arrived in Rome as the commander of the Secret Counterintelligence (SCI) unit of the OSS. Few were more qualified for the position. Unfortunately, Angleton was not only brilliant but also dangerously paranoid, seeing the world as a “wilderness of mirrors.” In these mirrors, he saw reflections of spies and counterspies (many of whom he felt compelled to eliminate) and the unfolding succession of conspiracy upon conspiracy—all of which required immediate and, at times, murderous resolution.14 

Junio Valerio Borghese

Angleton's father, Hugh, also served the O.S.S. Before the war, Hugh had been the president of the American Chamber of Commerce in Italy and the owner of the Milan branch of the National Cash Register Company. The elder Angleton, who was outspokenly pro-Hitler and pro-Mussolini, had developed extensive contacts throughout Italy that were of great use to his son. One such contact was Prince Junio Valerio Borghese, a member of the Catholic Black Nobility, the Italian aristocrats who had remained loyal to the Holy See after the rise of Garibaldi in the nineteenth century.15

BLACK XMAS 

Borghese was the leader of Decima Flottiglia MAS (10th Light Flotilla), also known as X MAS, an Italian naval commando unit. After Italy signed an armistice with the Allies on September 8, 1943, Borghese and his commandos opted to fight for the so-called “Solo Republic” that had been set up by the Nazis in northern Italy. His unit was given the task of attacking the Italian partisan bands that had sprouted up throughout Italy. The partisans were sponsored by the Italian Communist Party (Partito Comunista Italiano, or PCI). And, thanks to X MAS, thousands were found hanging from street lights and flag poles by the end of the war.16 

On April 13, 1945, Borghese met with General Wolff and Angleton at a villa on Garda Lake, where they discussed the possibility of extending their war efforts beyond any peace treaty with the Soviets, redeploying X MAS under the covert direction of the OSS. Borghese was amenable to the terms, especially since his cooperation would save him from an Italian firing squad.17 

THE SECRET GOVERNMENT 

On May 15, 1945, when Borghese was arrested and charged with war crimes, Angleton managed to secure his release into US Army custody. The Black Prince was dressed in an American uniform and transported from Milan to Rome. Angleton needed Borghese and the 10,267 fascists who fought under his command to help establish the stay-behind units that would ward off any Soviet aggression.18 

For a while, Angleton and other O.S.S officials, including Donovan, toyed with the idea of making Borghese the new king of Italy. But soon they came to their senses and realized that the X MAS commander would be of greater use as the leader of a shadow government, with a secret army that could manipulate Italian affairs throughout the coming decades.19 To create this government, the US State Department issued a mandate by which the “operational resources” of the Italian police, the Italian military intelligence, and the Italian secret service were placed at the disposal of Angleton and the SCI.20 

Under Borghese, the Gladio forces in Italy were divided into forty main groups: ten specialized in sabotage; six each in espionage, propaganda, and escape tactics; and twelve in guerrilla activities. A special training camp for members of the stay-behind units was set up in Sardinia, off Italy's western coast. The camp, thanks to the efforts of Gehlen and Wolff, was soon swarming with new gladiators from Germany, France, and Austria. By 1946, when the O.S.S morphed into the Central Intelligence Group (the precursor of the CIA), hundreds of Gladio units were in place throughout Western Europe.21 

THE MONEY SUPPLY 

But there was still a problem that seemed insurmountable. Gladio was a covert operation and had not been initiated by an act of Congress or a mandate from the Pentagon. Few federal officials knew of its existence. The $200 million in original funding came from the Rockefeller and Mellon foundations.22 But a new and steady stream of revenue had to be created almost overnight, or the world would not be safe for democracy. The future of Gladio would come to reside within America's ghettos.

CHAPTER TWO

THE LUCKY BREAK

NEGROES AND NARCOTICS

What cannot now be denied is that US intelligence agencies arranged for the release from prison of the world's preeminent drug lord, allowed him to rebuild his narcotics empire, watched the flow of drugs into the largely black ghettoes of New York and Washington, DC, escalate and then lied about what they had done. This founding saga of the relationship between American spies and gangsters set patterns that would be replicated from Laos and Burma to Marseilles and Panama. 

Alexander Cockburn and Jeffrey St. Clair, 

Whiteout: The CIA, Drugs, and the Press 

Col. Paul E. Helliwell had one hell of an idea. 

Col. Paul E. Helliwell

It came to him in China, where he was serving as Chief of Special Intelligence for the OSS. 

Helliwell's idea would result in a union between the US intelligence community and organized crime that would result in conflicts, wars, rebellions, financial upheavals, and an epidemic that would forever alter the flow of world history. 

Mainstream books about the CIA, like Tim Weiner's Legacy of Ashes, make no mention of Helliwell, his relationship with Lucky Luciano and Meyer Lansky, his creation of the Castle Bank in the Bahamas, and his grand experiment on the black community of Harlem. In the flood of CIA documents released since 1992, one does not find Helliwell's name 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 only once—on a list of documents withheld from inspection during the CIA's 1974 search for records concerning Watergate. This silence about the principal architect of the postwar CIA-drug connection exceeds all standards of eloquence.1 

Within Kunming, a town within the South China province of Yunnan, Helliwell observed that General Chaing Kai-shek's, leader of the Kuomintang (KMT—the Chinese National Army), sold opium to Chinese addicts in order to raise funds for his army's planned war against the Communist forces of Mao Zedong.2 Since Helliwell's task was to provide covert assistance to the KMT, what better help could he provide than steady shipments of opiates for the good general? 

Helliwell presented this idea to his boss General William “Wild Bill” Donovan. Donovan shared it with James Jesus Angleton, Allen Dulles (the OSS Swiss Director), and William “Little Bill” Stephenson, master spy of the British Security Coordination. Delighted with the concept, the officials arranged to funnel money to Helliwell, who now “became the man who controlled the pipe line of covert funds for secret operations throughout Asia.”3 The money for the opiates would eventually come from Nazi gold that had been laundered and manipulated by Dulles and Stephenson through the World Commerce Corporation, a financial firm established by Wild Bill.4 But that was still in the future. 

By the close of World War II, Helliwell and a number of fellow Army intelligence officers—E. Howard Hunt, of Watergate fame; Lucien Conein, a former member of the French Foreign Legion with strong ties to the Corsican Mafia; Tommy “the Cork” Corcoran, a lawyer serving the Strategic Service Unit; and Lt. General Claire L. Chennault, the military advisor to Chiang Kai-Shek and the founder of the Flying Tigers—had created the Civil Air Transport (CAT) from surplus aircraft, including C-47 Dakotas and C-46 Commandos.5 The CAT fleet transported weapons to a contingency force of the KMT in Burma. The planes were then loaded with drugs for their return trip to China.6 The pilots who flew these bush-type aircraft were a motley group of men, often serving as agents or go-between with the Chinese National guerrillas and the opium buyers. Some were former Nazis, others part of the band of expatriates that emerges in countries following any war.7 Helliwell and his compatriots had created a model for trafficking in drugs that would result in the formation of Air America—the CIA fleet of planes that transported opiates and cocaine during and after the Vietnam Conflict. Thanks to their efforts, Burma's Shan Plateau would grow from a relatively minor poppy cultivating area into the largest opium producing region of the world.8 

GHETTO GOLD 

Wild Bill had drafted plans to create a postwar central intelligence agency and, knowing this, Helliwell came up with another brainstorm—a surefire means of gaining covert funding for Gladio and other security operations.9 The new agency, he realized, could obtain cold cash by adopting the same measures as General Chaing. It could supply heroin to the black community in America's ghettos. 

World War II had disrupted international shipping and imposed tight waterfront security that made smuggling heroin into the United States almost impossible. Heroin supplies were small and international crime syndicates had fallen into disarray. But opiates were becoming the rage of the jazz scene in Harlem, and the demand for heroin was increasing day by day among black musicians in New York, where a hit could cost as much as one hundred dollars. Helliwell, dealing with the drug lords of Burma, was keenly aware of this fact. 

The notion wasn't out of line with O.S.S protocol. Helliwell and his Army intelligence buddies in China were already involved with providing shipments of opium to General Chaing, and with giving “three sticky brown bars” to Burmese addicts who could offer information about the military plans of Chairman Mao.10 If similar bars could be made available to inner-city dealers at rock bottom rates, then the market could be cornered and the demand made to increase in an exponential manner. Helliwell knew that a drug epidemic might arise. But, he reasoned, the problem would remain confined to the lowest strata of society, with little impact on white middle-class America. [Way uncool D.C]

Helliwell, the son of a prominent English cloth buyer, was a member of the inner circle of the OSS (which became known as the Oh So Social club), along with other wealthy American dignitaries, including Henry Sturgis Morgan (son of J. P. Morgan Jr.), Nicholas Roosevelt, Paul Mellon (son of Andrew Mellon), David K. E. Bruce (Andrew Mellon's son-in-law), and members of the Vanderbilt, Carnegie, DuPont, and Ryan families. Angleton, as noted, was a Yale graduate and the son of Hugh Angleton, a multimillionaire who owned the Italian franchise of the National Cash Register Company. Dulles was a Princeton graduate and the senior partner at the Wall Street firm of Sullivan and Cromwell, which represented the Rockefeller empire and other mammoth trusts, corporations, and cartels. He was also a board member of the J. Henry Schroeder Bank, with offices in Wall Street, London, Zurich, and Hamburg, and a principal of the Bank of New York. Wild Bill Donovan was an Ivy League lawyer and had married Ruth Ramsey, the heiress of one of the richest families in America.11 Donovan justified the practice of recruiting the socially elite for the OSS by saying, “You can hire a second-story man and make him a better second-story man. But if you hire a lawyer or an investment banker or a professor, you have something else besides.”12 And so, when Helliwell, who was not a second-story man, communicated his idea to the OSS brass, he was assured of a captive audience. 

Donovan, Angleton, and Dulles viewed Helliwell's proposal as answered prayer. Selling smack to the black jazz subculture would provide US intelligence with a steady supply of revenue for Gladio throughout the postwar era. The Truman Administration had set aside no funds for covert, postwar operations in the federal budget. And cold cash, Donovan knew, would become the key weapon of the new agency he remained hell-bent on establishing as soon as he got back to Washington. It alone could provide the means to purchase the services of foreign agents, foreign politicians, and foreign assassins without the approval of any elected official.13 

Donovan's reasoning, bizarre as it might seem to modern readers, was shared by most American political leaders—Republican and Democratic alike—at the close of World War II. Alfred W. McCoy explains: 

Henry Luce, founder of the Time-Life empire, argued that America was the rightful heir to Great Britain's international primacy and heralded the postwar era as ‘The American Century.’ To justify their ‘entanglement in foreign adventures,’ American cold warriors embraced a militantly anti-Communist ideology. In their minds, the entire world was locked in a Manichaean struggle between ‘godless communism’ and ‘the free world.’ The Soviet Union was determined to conquer the world, and its leader, Joseph Stalin, was the new Hitler. European labor movements and Asian nationalist struggles were pawns of ‘international Communism,’ and as such had to be subverted or destroyed. There could be no compromise with this monolithic evil: negotiations were ‘appeasement’ and neutralism was ‘immoral.’ In this desperate struggle to save ‘Western civilization,’ any ally was welcome and any means was justified.14 

Since any ally was welcome and any means justifiable, Wild Bill decided the implementation of Helliwell's drug scheme would enable him to make use of Charles “Lucky” Luciano and the Sicilian Mafia.

THE COMMISSION 

Charles “Lucky” Luciano, born in Sicily as Salvatore Lucania, emerged as America's leading Mafioso by creating “the Commission” with Meyer Lansky, his long-time friend and accomplice, in 1931. The Commission eventually governed organized criminal activity within the United States by establishing territorial boundaries, settling internal disputes, and ruling on in-house killings. Twelve Mafia bosses sat on the board of directors, with Luciano as the head.15 

During Prohibition, Luciano and Lansky gained control of the New York docks and longshoremen's union by means of muscle and blood in order to supply speakeasies within Manhattan with scotch from Scotland, rum from the Caribbean, and whiskey from Canada. When a bloody war broke out between the families of Giuseppe “The Boss” Masseria and Salvatore Maranzano from 1927 to 1929, Luciano put an end to it by arranging the elimination of both Mafia chiefs and laying down the law to survivors. “I explained to ’em that all the war horseshit was out,” he later explained. “I told ’em we was in a business that hadda keep movin’ without explosions every two minutes; knockin’ guys off just became they came from a different part of Sicily; that kind of crap was givin’ us a bad name, and we couldn't operate until it stopped.”16

HEROIN AND HOOKERS 

At the end of prohibition, Lucky imported heroin from the Chinese warlords in Shanghai and Tientsin that had then been refined in laboratories controlled by the Corsican Mafia. The product that reached the mean streets and opium dens of Boston, New York, Philadelphia, Los Angeles, and San Francisco was less than 3 percent pure, since it was heavily cut with sugar or quinine.17 What's more, a surprising amount of the product did not include any heroin at all. 

Heroin represented a minute part of the Commission's business. Before World War II, America had less than twenty thousand heroin addicts and less than one thousand kilos were produced annually throughout the world.18 Use of the drug in America remained largely confined to Asian immigrants and black musicians, and most made men—the term for fully initiated members of the Mafia —“shunned drug peddling” as an “immoral” and “unmanly activity.”19 “My tradition,” Mafioso Joe Bonanno wrote in his memoirs, “outlaws narcotics. Men of Honor don't deal in narcotics.” Lucky was the exception to this code of honor. He established the heroin trade with Turkish and Chinese opium merchants, saving a considerable amount of the “good stuff” for the women who worked his brothels. The drugs served to strengthen their dependence upon his largesse and good will. Indeed, the combination of organized prostitution and drug addiction became one of Lucky's trademarks. By 1936, he controlled two hundred New York City brothels, employing twelve hundred prostitutes. These establishments provided him with an estimated annual income of $10 million.20 

LUCKY'S LOCKUP 

On February 2, 1936, US Attorney Thomas E. Dewey launched a raid of brothels in Manhattan and Brooklyn, which netted arrests of ten pimps and one hundred prostitutes. Unable to come up with the cash for the stiff bonds of $10,000 imposed by the presiding judge, several of the prostitutes bartered with Dewey for their release by fingering Luciano as their ring leader. On June 7, Lucky was convicted on sixty-two counts of compulsory prostitution and sentenced to thirty to fifty years of hard time at the Clinton Correctional Facility in Upstate New York.21 

Even within a prison so harsh it was known as “Little Siberia,” Lucky managed to bribe prison officials with enough cash to gain not only a private cell on the best block, but also a personal valet to press his dress slacks and silk shirts and an experienced chef to prepare his meals. The warden also permitted him to receive a steady stream of visitors, including Vito Genovese, his under-boss, and Meyer Lansky, his long-time partner in crime.22 

THE NORMANDIE SCAM 

In June 1942, Frank Costello, Albert Anastasia, and Tony Anastasio, three of Luciano's closest criminal cronies, came up with a plan to get their pal out of prison. Knowing that the Department of the Navy was paranoid about security at the New York waterfront and the possibility that Nazi Uboats might sink American ships remaining in the harbor, they decided to stage an incident that would require Lucky's release from Little Siberia. As Luciano later told his biographers: 

Costello got in touch with me right away. Albert had worked this idea out with his brother, Tough Tony. Albert said that the guys from Navy Intelligence had been all over the docks talkin’ to ’em about security; they was scared to death that all the stuff along the Hudson, the docks and boats and the rest, was in very great danger. It took a guy like Albert to figure out somethin’ really crazy; his idea was to give the Navy a real big hunk of sabotage, somethin’ so big that it would scare the shit out of the whole fuckin’ Navy.23 

The SS Normandie, a French luxury liner, had been converted into a transport ship for the Allied forces. When it was set ablaze at Pier 88 in the New York harbor, the incident was blamed on Nazi spies. The Office of Naval Intelligence (ONI) sought the help of waterfront union officials, including Joe “Socks” Lanza and Tony Anastasio, to prevent further “sabotage.” Lanza and Anastasio informed the officers that adequate security could only be guaranteed by Luciano, who had ruled the waterfront for many years with an iron hand. “Everybody in New York was laughing at the way those naive Navy agents were going around the docks. They went up to the men working in the area and talked out of the corner of their mouths like they had seen in the movies, asking about spies,” Meyer Lansky recalled.24 

Lt. Commander Charles Radcliffe Haffenden of the O.N.I paid a visit to the Clinton Correctional Facility, where he offered Lucky the promise of pardon and deportation to his native Sicily in exchange for his help in securing the harbor and preventing strikes by the Manhattan longshoremen.25 “As far as Haffenden was concerned, he didn't know nothin’ that was goin’ on except that he was sittin’ there with his mouth open, prayin’ I would say yes and help his whole department.” Luciano later said.26 Thus Operation Underworld got underway, with Lucky transforming from a mob thug to an agent of the O.N.I. 

MONSIGNOR MONTINI'S INFLUENCE 

On April 15, 1943, the O.S.S was charged with implementing plans for the Allied invasion of Sicily. The Joint Staff Planners for the US Joint Chiefs of Staff had drafted a report titled Special Military Plan for Psychological Warfare in Sicily that recommended the “Establishment of contact and communications with the leaders of separatist nuclei, disaffected workers, and clandestine radical groups, e.g., the Mafia, and giving them every possible aid.”27 

The report was approved by the Joint Chiefs of Staff in Washington and the order to make the Mafia connection was dispatched to Donovan. Earl Brennan, the O.S.S director in Italy, reached out to Monsignor Giovanni Montini, the Vatican Undersecretary of State who would become Pope Paul VI, for help in locating opponents to the fascist regime in Sicily. Montini suggested that Brennan reach out to Calogero “Don Calo” Vizzini, the capo di tutti capi—“boss of all bosses”—of the Vizzini/Agostino crime family, who had been imprisoned by Mussolini for his support of the Christian Democrats and his opposition to fascism. Brennan conveyed this information to Donovan, who knew that no one involved in the O.S.S or ONI had closer ties to the Vizzini clan than Lucky Luciano. Luciano had been born less than fifteen miles from Villalba, where his Mafiosi relatives still worked for Don Calo.28

THE RETURN OF THE MAFIA 

At Donovan's request, Commander Haffenden again appeared at Lucky's cell with a request for help. Luciano complied by drafting a communique that was then airdropped near Don Calo's farmhouse.29 Two days later, American tanks rolled into Villalba after driving fifty-five miles from the beachhead of General Patton's Seventh Army in Palermo. Don Calo and his men climbed into the tanks and spent the next six days guiding the division through western Sicily and organizing support among the local populace for the advancing US troops.30 Thanks to the success of Operation Husky (the code name for the Allied invasion of Sicily), Don Calo was appointed Mayor of Villalba.31 As soon as he assumed public office, Don Calo murdered the local police chief, whom he found “too inquisitive.”32 Other Mafiosi, at the insistence of the OSS, assumed positions of political power. Giuseppe Genco Russo, Don Calo's second in command, became Mayor of Mussomeli, while other members of the Vizzini/Agostino crime family became chief governing officials of other towns and villages in western Sicily.33 The appointments were understandable. Donovan wanted antifascists in charge, and the Mafiosi were most certainly antifascists, since many had spent the war years in Mussolini's jails.34 Michele Pantaleone, who observed the Mafia revival in his native village of Villalba, writes: 

By the beginning of the Second World War, the Mafia was restricted to a few isolated and scattered groups and could have been completely wiped out if the social problems of the island had been dealt with…the Allied occupation and the subsequent slow restoration of democracy reinstated the Mafia with its full powers, put it once more on the way to becoming a political force, and returned to the Onorata Società, the weapons which Fascism had snatched from it.35 

The return of the Men of Respect became a nightmare for ordinary Sicilians. Shifting from rural to urban crime, the Mafia bosses led by Don Calo graduated from the stiletto to the Beretta and the tommy gun. From 1944 to 1960, the bosses commissioned an average of three murders a week. Scarcely a shred of their fabled knightly code of honor remained by the end of Don Calo's reign of terror.36 

ENTER VITO GENOVESE 

The ascendancy of the Mafia also became apparent with the appointment of Vito Genovese, Luciano's right hand man, as chief translator for the U S Army headquarters in Naples. New York's former lieutenant-governor Charles Poletti, whom Lucky described as “one of our good friends,” was also appointed as military governor in Italy.37 Thanks to Poletti, Genovese's men controlled the major Italian ports, and thereby most of the black market in American and Sicilian goods such as flour, oil, sugar, beans, salt, and cigarettes. Even Genovese's lowest picciotto, the youngest and most inexperienced men, made a bundle. “How did I accumulate my fortune? I did the black market during and after the war,” Luciano Leggio, a henchman for Genovese later explained to a jury in Palermo.38 

Thanks to the success of the invasion, Lucky Luciano became the subject of massive media hype, which culminated in radio broadcaster Walter Winchell proclaiming that the mobster should receive the Congressional Medal of Honor.39

MAKING THE FIX 

With the Mafia in control of the Italian ports, the time was ripe for the implementation of Helliwell's plan for the funding of the postwar intelligence agency—a plan which relied on Luciano's network of narcotics distribution within the mean streets of inner-city America. Secretary of the Navy James V. Forrestal, OSS officials Allen Dulles and Murray Gurfein, and Lt. Commander Haffenden applied pressure on New York Governor Thomas E. Dewey—who as a prosecutor had brought Lucky to justice—to commute Luciano's prison sentence and deport him to Italy.40 Dewey complied even though the move was unprecedented; Luciano was a US citizen and not subject to deportation. But few expressed outrage when America's number one criminal was placed aboard the Laura Kleene, a seventy-ton freighter, for safe passage to Naples.41 Three years after the ship's departure, Forrestal, who kept a detailed record of his dealings concerning Luciano, was thrown out the window of the sixteenth floor of the Bethesda Naval Hospital, where he had been a patient.42 

The Helliwell plan also required Vito Genovese's return to the United States for the creation of a system of heroin distribution to the nightclubs of Harlem. This posed a problem, since Genovese was a fugitive wanted for the murder of Ferdinand Boccia, a fellow mobster. Measures had to be taken to ensure Vito's freedom. On June 2, 1945, the day after his arrival in New York harbor, Genovese was arraigned in court and pled not guilty. One week later, Peter LaTempa, a key witness for the prosecution, took some medicine for his gall stones and was found dead in his solitary cell, where he had been placed for protection. An autopsy later revealed enough poison in his system “to kill eight horses.”43 On June 10, Jerry Esposito, the second witness, was found shot to death beside a road in Norwood, New Jersey. All charges against Genovese were dropped. In a memo dated June 30, 1945, Brigadier General Carter W. Clarke wrote that the records regarding Genovese from military intelligence were so “hot” that they should be “filed and no action taken.”

 HOMECOMING AND HAVANA 

In the summer of 1946, Luciano arrived in his hometown of Lercara Friddi in Sicily, where he received a hero's welcome. Hundreds of people lined the streets waving small American flags. A four-piece band played “The Stars and Stripes Forever” as the mayor, draped in a red sash, ushered the American mobster out of a police car.44 “Half the people I met in Sicily was in the Mafia,” Lucky later reflected, “and by half the people, I mean half the cops, too. Because in Sicily, it goes like this: the Mafia is first, then your own family, then your business, and then the Mafia again.”45 

In October, at the request of US intelligence agents, Lucky traveled to Cuba where he met with Frank Costello, Vito Genovese, Albert Anastasia, and Meyer Lansky to discuss the Helliwell plan. Also in attendance were Mike Miranda, Joseph Magliocco, Joe Adonis, Tommy Lucchese, Joe Profaci, Willie Moretti, the Fischetti brothers (heirs to Al Capone), and Santo Trafficante—all important members of the American Mafia. The conference was held at the Hotel Nacional, where Frank Sinatra made his Havana singing debut in honor of Luciano.46 Several of the Mafiosi voiced their opposition to Lucky's plan by maintaining that dealing in junk was beneath them. But, at the end of the conference, all became convinced that providing heroin to blacks was simply giving them what they wanted and who cared what happened to “niggers.”47

THE CREATION OF THE CIA 

On September 20, 1945, President Harry S. Truman abolished the O.S.S and placed its secret intelligence and counterespionage branches under the war department as the Strategic Services Unit (S.S.U). Within months, the S.S.U morphed into the National Intelligence Authority and the Central Intelligence Group (C.I.G), the precursor of the CIA. According to Richard Helms in his memoirs, General Vandenberg, the director of C.I.G, recruited Allen Dulles, who had returned to his law practice in New York, “to draft a proposal for the shape and organization of what would become the Central Intelligence Agency” from the outline Wild Bill Donovan had created.48 The proposal met with Truman's approval. 

The Central Intelligence Agency (CIA) was created in 1947, under the National Security Act, to carry out covert operations “against hostile foreign states or groups or in support of friendly foreign states or groups but which are so planned and conducted that any US government responsibility for them is not evident to unauthorized persons.” True to Wild Bill's vision, the new agency was exempt from disclosure of its “organization, functions, officials, titles, salaries, or numbers of personnel employed.”49 Even its solicitation and distribution of funds was to be concealed from Congressional and Judicial scrutiny. As Tom Braden, a senior CIA operational official in the early 1950's, explained: “The Agency never had to account for the money it spent except to the President if…[he] wanted to know how much money it was spending…otherwise the funds were not only unaccountable, they were unvouchered, so there was really no means of checking them…Since it [the CIA] was unaccountable, could hire as many people as it wanted…. It could hire armies; it could buy banks.”50 

AN ELITE AGENCY 

President Truman authorized Dulles to supervise the organization of the new agency. In keeping with O.S.S protocol, Dulles recruited almost exclusively the nation's elite: millionaire businessmen, Wall Street bankers and lawyers, members of the national news media, and Ivy League scholars. The new recruits included Desmond Fitzgerald, Tracy Barnes, and Tommy “the Cork” Corcoran, three Harvard-trained Wall Street lawyers; Richard Bissell, a Yale economics professor; William F. Buckley, Jr., a Yale graduate and son of a prominent oil baron; Philip Graham, a Harvard graduate and future owner of the Washington Post; William Colby, a graduate of Princeton and the Columbia Law School; and Richard Mellon Scaife, the principal heir to the Mellon banking, oil, and aluminum fortune. Rear Admiral Roscoe H. Hillenkoetter of the O.N.I became the executive director of the CIA and former O.S.S official and Wall Street lawyer Frank Wisner was appointed head of covert operations. The first concern of the newly created Central Intelligence Agency was funding (since it had received no allocation in the federal budget), which would be solved with the implementation of the brilliant idea of Col. Paul E. Helliwell.51

THE HELLIWELL PLAN HITS HARLEM 

During the summer of 1947, the terms of the working relationship between the CIA and the Mafia were ironed out by Frank Wisner and Angleton. Meyer Lansky and Helliwell would work in tandem to handle the financial aspect of the narcotics venture through General Development Corporation, a shell company in Miami.52 Angleton would handle any legal disputes between the mob and the CIA through New York lawyer Mario Brod.53 The two hundred kilos of heroin for the test run would come from Schiaparelli, one of Italy's most respected pharmaceutical companies.54 The product would be shipped by the Sicilian mob in crates of oranges. Half the oranges in the crates would be made of wax and stuffed with one hundred grams of pure heroin.55 Additional heroin would be packed in cans of sardines, wheels of caciocavallo cheese, and barrels of olive oil.56 The drugs would arrive in Cuba, where the heroin would be cut in laboratories controlled by the Trafficante clan. The drugs would then be shipped to New York for distribution in the jazz clubs of Harlem. 

Operation X got underway at the close of the year and met with incredible success. The future of Gladio and other covert ventures was no longer in jeopardy. Helliwell's analysis had been correct. The jazz clubs were the perfect spots to peddle heroin. Soon some of the country's leading black musicians—Billie Holiday, Theodore “Fats” Navarro, and Charlie Parker—became hopeless junkies, some of whom would die by overdose. Regarding this development, Harry Anslinger, then head of the Bureau of Narcotics, said: “Jazz entertainers are neither fish nor fowl. They do not get the million-dollar protection Hollywood and Broadway can afford for their stars who have become addicted—and there are many more than will ever be revealed. Perhaps this is because jazz, once considered a decadent kind of music, has only token respectability. Jazz grew up next door to crime, so to speak. Clubs of dubious reputation were, for a long time, the only places where it could be heard.”57 

POLICE PROTECTION 

Col. Albert Carone, a New York City policeman, served the new drug network as “a bagman for the CIA,” paying law enforcement officials to “look the other way” when drugs were being distributed in Harlem and other black communities.58 A made man within the Genovese crime family, Carone also collected money for drug payments and, later, for money to be laundered by the Vatican from Mafia families in New York, New Jersey, and Pennsylvania. In recognition of his service, the cop/bagman became a Grand Knight of the Sovereign Military of Malta, which has been described as “the military arm of the Holy See.”59 Protection of the drug trade would become reflected in the fact that not one major drug bust was conducted by US officials from 1947 to 1967, despite the rise in heroin addicts from 20,000 to 150,000.60 The success of the drug venture heightened the CIA's concern with secrecy surrounding its ties to organized crime. At the insistence of Rear Admiral Hillenkoetter, the archivists at the Office of Naval Intelligence collected and burned all records concerning Lucky Luciano, including the terms of his parole. O.N.I agents now insisted that Lucky provided nothing to the war effort. Anyone attempting to unearth the history of the heroin trade in America would be hard pressed to find facts. In 1954, when William Herlands, the New York Commissioner of Investigations, launched a probe into the matter, he was told that the O.N.I and the CIA would consent to cooperate under three conditions: no classified information would be turned over; O.N.I and CIA officials could monitor all interviews with former agents; and the final report could not be released to the public.61 

RED ALERT 

The overriding concern of the new intelligence agency was the situation in Italy, where the Italian Communist Party (Partito Comunista Italiano, or PCI) was poised to take control of the government. Between late 1943 and mid-1944, the PCI had doubled in size and, in the German-occupied northern half of the country, an extremely radical Marxist movement was gathering strength. In the winter of 1944, over five hundred thousand workers in Turin, waving the red flag, shut down the factories for eight days, despite brutal Gestapo repression. The Italian underground of Communist sympathizers grew to 150,000 armed men.62 

Postwar Italy stood poised to become the first Communist country in Western Europe. Hundreds of thousands of northerners had either actively supported or actively fought for the partisan movement that had finally forced the German army out of Italy. It was the partisans who had captured Mussolini and who had hung him upside down with his mistress; it was the partisans who continued to assassinate Fascists after the war ended; and it was the partisans who constituted the PCI. By 1946, the division in the country had become acute, with the people in the north wanting a Communist republic and the people in the south wanting a Catholic monarchy.63 

In Sicily, the rise of the PCI was even more disconcerting. Girolamo Li Causi, the island's leading Communist, stirred up the masses with his demands for the redistribution of the land's feudal holdings. His words, “we plan no Soviet rule here,” did not reassure the Mafia and the propertied classes, and they revitalized the longings of the landless poor for economic reform.64 In 1947, support for the Left, never previously strong in Sicily, skyrocketed out of nowhere. All of Italy was stunned by the provincial elections, which produced resounding victories for the Communists. 

With national elections in Italy scheduled for 1948, US officials were faced with the specter of a coalition coming to power under Palmiro Togliatti, leader of the PCI. Togliatti had spent the war in exile in the Soviet Union.65 The first numbered document of the newly created CIA was a top secret report titled “The Position of the United States with Respect to Italy” (NSC 1/1). The report, which was issued on November 14, 1947, contained the following quote from a cable sent by George Kennan, director of the US State Department's Policy Planning Staff: “As far as Europe is concerned, Italy is obviously the key point. If communists were to win election there our whole position in the Mediterranean, and possibly Western Europe as well, would probably be undermined.”66 

THE DIRTY MONEY 

The heightened paranoia over the possibly of a PCI victory gave rise to the creation of the Office of Policy Coordination within the CIA. This office was authorized to engage in “paramilitary operations as well as political and economic warfare.”67 The authorization for such covert action, according to CIA director Frank Wisner, was included in a catch-all clause to the National Security Act of 1947 which granted the CIA the right to engage in “functions” related to “intelligence affecting the national security.” And nothing in 1947 seemed more of a threat to the peace and stability of America and the Western World than the threat of a Communist takeover in Italy. In the eyes of Wisner, Dulles, Donovan, and Angleton, the only individuals with the means to ward off this nightmare were Lucky Luciano and Don Calo; and the new intelligence agency, thanks to Helliwell, now had ample cash to pay them. 

Of course, the money for the muscle could not be paid to Lucky and the Don Calo clan directly. It had to be channeled through a financial firm that would not be subjected to scrutiny by US treasury agents, Italian bank examiners, or international fiscal monitors. Only one institution possessed such immunity, and it was located in the heart of Vatican City.

next
the Vatican Alliance  

FAIR USE NOTICE

THIS SITE CONTAINS COPYRIGHTED MATERIAL THE USE OF WHICH HAS NOT ALWAYS BEEN SPECIFICALLY AUTHORIZED BY THE COPYRIGHT OWNER. AS A JOURNALIST, I AM MAKING SUCH MATERIAL AVAILABLE IN MY EFFORTS TO ADVANCE UNDERSTANDING OF ARTISTIC, CULTURAL, HISTORIC, RELIGIOUS AND POLITICAL ISSUES. I BELIEVE THIS CONSTITUTES A 'FAIR USE' OF ANY SUCH COPYRIGHTED MATERIAL AS PROVIDED FOR IN SECTION 107 OF THE US COPYRIGHT LAW.

IN ACCORDANCE WITH TITLE 17 U.S.C. SECTION 107, THE MATERIAL ON THIS SITE IS DISTRIBUTED WITHOUT PROFIT TO THOSE WHO HAVE EXPRESSED A PRIOR INTEREST IN RECEIVING THE INCLUDED INFORMATION FOR RESEARCH AND EDUCATIONAL PURPOSES. COPYRIGHTED MATERIAL CAN BE REMOVED ON THE REQUEST OF THE OWNER.