THE IRAN CONTRA CONNECTION
SECRET TEAMS AND COVERT
OPERATIONS IN THE REAGAN ERA
BY
JONATHAN MARSHALL,
PETER DALE SCOTT,
AND
JANE HUNTERIV.
The Growth of Reagan's
Contra Commitment
Introduction:
Private and Official Decision-Making
By any accounting, Washington's decision to create and support the
contras was a consensual one, reached in the heart of the Reagan
administration's professional bureaucratic apparatus. The relative weight
of outside "shadow networks" and inside bureaucrats in generating the
formal contra commitment is neatly summarized in an excellent book by
Christopher Dickey, With the Contras:
Before any hard and fast decisions on the Secret War were taken, several
CIA 'old-timers,' released from service during the cutbacks of the 1970's,
were in contact with anti-Sandinista forces, acting as private citizens to
reassure them that once Reagan was elected, their lot would improve...But
while some of these men eventually served as contract agents in the
Secret War, their importance in creating it is, I believe, overstated. The
paramilitary operation against Nicaragua ultimately was not just an out-of control
creation of conspiratorial ex-spies and right-wing ideologues but a
conscious decision by senior administration officials who consider
themselves pragmatic policymakers.1
Like other authors, Dickey locates this conscious decision making in
the Senior Interagency Group on Central America set up under National
Security Council guidelines and precedents, and initially responsible to CIA Director William Casey and Robert McFarlane (then Secretary of
State Haig's counselor).2
Two names from this initial "Core Group" set up
in 1981 would figure in the later Contragate story: Nestor Sanchez, a New
Mexico-born CIA veteran of the Guatemalan "death squad" operations in
1967-68, (later representing the Pentagon), and Colonel Oliver North
from the NSC staff.
Dickey's account, however, stresses the discontinuity between the
"pragmatic" bureaucratic consensus of 1981, and the consensus of a year
earlier under Jimmy Carter, when the message to Central American
governments was not counter-revolution so much as "reform":
Despite years of experience and seniority in the foreign service, most of
the veterans associated with the Carter policy [in Central America] were
fired, forced out or moved to obscure and distant posts. Carter's last
assistant secretary was sacked. His principal deputy for Central America
was transferred to Katmandu...The men brought in to replace them were,
as one put it, 'action-oriented.'3
Clearly, then, the change in policy was not bureaucratic so much as
political. The 1981 purge of those State Department hands who allegedly
"lost Nicaragua," like the 1953 purge of those who allegedly "lost China,"
was undertaken to fulfill a campaign pledge, made in response to allegedly
massive and illicit campaign contributions from the interested region.
Those who acted to generate the change in policy were not just the self important
CIA "old-timers" to whom Dickey refers. The agents included
these men's "anti-Sandinista" allies—most notably the deposed dictator
Anastasio Somoza of Nicaragua, and after Somoza's murder in 1980, the
Guatemalan death squad impresario, Mario Sandoval Alarcon.
In the late 1970's, as indicated in the last chapter, three of the foreign
forces who would eventually back the contras (the governments of Taiwan
and Argentina, and right-wing forces in Guatemala), had taken an
important step to ensure themselves a voice in Washington for a new U.S.
foreign policy in Latin America to replace President Carter's. All three
moved to hire as their Washington lobbyist Michael Deaver, the man then
managing the campaign of future presidential candidate Ronald Reagan.
After this, Deaver's Guatemalan clients, following visits from Reagan
campaign representatives such as Richard Allen, Roger Fontaine and John
Singlaub (the CIA "old-timer" and future WACL Chairman), began to
raise funds for the Reagan campaign. On a BBC broadcast, these funds were
estimated by former Guatemalan Vice-President Villagran Kramer as
amounting to perhaps ten million dollars.4
Reagan, Deaver's Amigos,
and the Death Squads
The group that Deaver represented in Guatemala, the Amigos del Pais
(Friends of the Country), is not known to have included Mario Sandoval
Alarcon personally. But ten to fifteen of its members were accused by
former Guatemalan Vice-President Villagran Kramer on the BBC of being
"directly linked with organized terror."5
One such person, not named by
Villagran, was the Texas lawyer John Trotter, the owner of the Coca-Cola
bottling plant in Guatemala City. Coca-Cola agreed in 1980 to terminate
Trotter's franchise, after the Atlantic Monthly reported that several workers
and trade union leaders trying to organize his plant had been murdered by
death squads.6
One year earlier, in 1979, Trotter had traveled to Washington as part
of a five-man public relations mission from the Amigos. At least two
members of that mission, Roberto Alejos Arzu and Manuel F. Ayau, are
known to have met Ronald Reagan. (Reagan later described Ayau as "one
of the few people...who understands what is going on down there."7
)
Roberto Alejos Arzu, the head of Deaver's Amigos and the principal
organizer of Guatemala's "Reagan for President" bandwagon, was an old
CIA contact; in 1960 his plantation had been used to train Cuban exiles for
the Bay of Pigs invasion. Before the 1980 election Alejos complained that
"most of the elements in the State Department are probably pro Communist...Either
Mr. Carter is a totally incapable president or he is
definitely a pro-communist element."8
(In 1954, Alejos' friend Sandoval
had been one of the CIA's leading political proteges in its overthrow of
Guatemala's President Arbenz.) [Interesting on the State Department of the late 70's,because Heinrich Muller in the late 40's,early 50's was saying the exact same thing about State DC]
When asked by the BBC how ten million dollars from Guatemala
could have reached the Reagan campaign, Villagran named no names:
"The only way that I can feel it would get there would be that some North
American residing in Guatemala, living in Guatemala, would more or less
be requesting money over there or accepting contributions and then
transmitting them to his Republican Party as contributions of his own."9
Trotter was the only U.S. businessman in Guatemala whom Alan
Nairn could find in the list of Reagan donors disclosed to the Federal
Election Commission. Others, who said specifically that they had contributed,
were not so listed. Nairn heard from one businessman who had
been solicited that "explicit instructions were given repeatedly: 'Do not
give to Mr. Reagan's campaign directly.' Monies were instead to be
directed to an undisclosed committee in California."10
Trotter admitted in 1980 that he was actively fundraising in this
period in Guatemala. The money he spoke of, half a million dollars, was
however not directly for the Reagan campaign, but for a documentary film
in support of Reagan's Latin American policies, being made by one of the
groups supporting Reagan, the American Security Council (ASC). The
film argued that the survival of the United States depended on defeat of the
Sandinistas in Nicaragua: "Tomorrow: Honduras...Venezuela, the Dominican
Republic, Mexico...the United States."11 [Total propaganda horse dung DC]
Deaver's Amigos and Trotter were in extended contact with the ASC
over this project. In December 1979, and again in 1980, the ASC sent
retired Army General John Singlaub to meet Guatemalan President Lucas
Garcia and other officials.12 According to one of Singlaub's 1979 contacts,
the clear message was that "Mr. Reagan recognizes that a good deal of dirty
work has to be done."13 On his return to the United States, according to
Pearce, Singlaub called for "sympathetic understanding of the death
squads."14 In 1980 Singlaub returned to Guatemala with another apologist
for death squads, General Gordon Sumner of the Council for InterAmerican
Security. Again the message to Lucas was that "help was on the
way in the form of Ronald Reagan."15
Jenny Pearce has noted that Singlaub's first ASC visit to Guatemalan
President Lucas took place shortly after Lucas's meeting with Guatemalan
businessmen, where he is "alleged to have raised half a million dollars in
contributions to the [Reagan] campaign."16 Since the 1984 Congressional
cutoff of aid to the contras, Singlaub, as world chairman of the World
Anti-Communist League, has been the most visible source of private
support to the contras. He did this in liaison with both William Casey of the
CIA and Col. Oliver North of the National Security Council staff.17
But Singlaub's contacts with the World Anti-Communist League go
back at least to 1980, when he was also purporting to speak abroad in the
name of Reagan. Did the help from Reagan which Singlaub promised
Guatemalans in 1980, like the "verbal agreements" which Sandoval
referred to at Reagan's Inaugural, involve commitments even then from
Reagan to that fledgling WACL project, the contras?
Mike Deaver should be asked that question, since in 1980 he was a
registered foreign lobbyist for three of the contras most important WACL
backers: Guatemala, Taiwan, and Argentina.
Deaver, Taiwan, and WACL
Through his CIA contacts, Sandoval had also become the leader of the
Guatemala chapter of the World Anti-Communist League. This chapter,
partly organized by Howard Hunt, was a lasting spinoff of the 1954 CIA
operation. WACL as a world organization however was principally the
creation of two Asian governments which owed their survival to their
well-organized lobbies in Washington. These two governments are
Taiwan, which was represented in 1980 by Deaver; and South Korea,
which is represented by Deaver today.
Through his long-time participation in WACL meetings, Sandoval
has developed close relations with WACL's Taiwan organizers. It was
largely through WACL that Taiwan picked up the task of training Central
American police forces in "political warfare" (i.e. counter-terror), about
the time that similar U.S. training programs were terminated by Congress
in 1974. Today the Taiwanese embassy in Guatemala is second in size only
to the American; and through Guatemala (and Sandoval) Taiwan has
extended its influence to other Central American police forces. Deaver's
double duty as a registered Taiwan agent and Reagan campaign organizer
in 1980 helped generate one of the major controversies of that campaign.
To understand it, one must go back to the origins of Deaver's public
relations firm, Deaver and Hannaford, which he organized in 1974. Until
that year both Deaver and Peter Hannaford had worked for Reagan in the
California Governor's Office. In 1974, as Reagan retired to private life, the
new firm undertook to book Reagan's public appearances, research and sell
his radio program, and ghost-write his syndicated column. All this was
arranged with an eye to Reagan's presidential aspirations, which Deaver
and Hannaford helped organize from the outset.18
Nothing about this arrangement was especially remarkable until 1977,
when Deaver and Hannaford registered with the Justice Department as
foreign agents receiving $5000 a month from the government of Taiwan.
This sum was not particularly large, and notably less than the $11,000 a
month which the firm would receive in 1980 from Guatemala's Amigos.
The fact remains that funds from three closely allied WACL countries,
Guatemala, Taiwan, and Argentina, helped pay for the Deaver and
Hannaford offices, which became Reagan's initial campaign headquarters
in Beverly Hills and his Washington office.19
Questions of conflicting interest were raised when a Reagan column,
said to have been written by Hannaford, argued that normalized relations
with the People's Republic of China "could prove disastrous, not only for Taiwan, but for the United States itself."20 When Carter, undaunted,
established full relations in late 1978, Reagan became one of the loudest
critics of this action. In 1980 Reagan stumped the country with the catchphrase,
"No more Taiwan's, no more Vietnam's, no more betrayals."
As Reagan's California team was melded into a national one, by the
infusion of old Nixon supporters like William Casey and Richard Allen,
Reagan's position on Taiwan appeared to soften. It was Allen's task at the
Republican national convention to assure reporters that Reagan did not
intend to "turn the clock back."21
However the more balanced position which Allen projected, and
which the Eastern establishment press was eager to hear, was misleading. In
May 1980 in Cleveland, almost three months after Casey had become
Reagan's campaign chairman, Reagan said in reply to a question that "One
of the things I look forward to most if I am successful in this re-election is to
re-establish official relations between the United States Government and
Taiwan." Although Reagan did not spell this out, such a step would have
involved a repudiation of Carter's 1978 agreement which recognized that
"Taiwan is part of China."22
Though the national press generally ignored Reagan's Taiwan
position in May, they could not when on August 16 he repeated his pledge
to establish "an official governmental relationship" with Taiwan. The
occasion could not have been calculated to receive better press attention:
Reagan's remarks were made as he was bidding bon voyage to his running
mate George Bush, as he left on an image-building mission to Peking. As
Time observed disapprovingly, Reagan's remarks "managed to infuriate
Peking," and "create the impression of a rift between Reagan and Bush."
When an embarrassed Bush tried to assure Peking officials that Reagan was
not talking of relations "in a diplomatic sense," Reagan (in Time's words)
"undercut" Bush by telling a reporter he still stood by his Taiwan
statement. In the end Reagan grudgingly backed off ("I misstated"), while
an embarrassed Casey tried to dismiss the whole episode as "semantic
mishmash."23
Reflecting the concern of the Eastern Republican establishment, Time
analysed the problem as one of divisions between Reagan's "uncoordinated"
staff. It claimed that the top echelon of California insiders (among
whom it specifically named Deaver) was "insensitive," with "little
Washington or national campaign experience. The outsiders like Campaign
Director Casey...—do have that valuable experience but exercise less
influence over the candidate."
On the crunch level of foreign policy decision-making, the lack of
coordination appears to have been primarily between Richard Allen, who carried the title of Foreign Policy Advisor, and Deaver. There was some
irony in this, since Deaver and Hannaford were busy projecting images of
Reagan and themselves as pragmatists, while Allen had once been under
CIA surveillance for his links to Taiwan's Vietnam allies, and had
subsequently been relegated by Nixon to a minor role.24 On the issue of
Taiwan, however, Deaver and Hannaford were the ideologues, and Allen
relatively a pragmatist.
Though he had originated with the ideological right, by 1981 Allen
had acquired far more experience as a registered foreign agent than Deaver
and Hannaford; and underlying Reagan's Taiwan flap was the further
irony that the great American patriot's foreign policy formulation was at
this stage almost exclusively in the hands of registered foreign lobbyists.25
But Allen had more varied and mainstream clients to worry about than
Deaver—notably Japan, which had every interest in preventing Carter's
China policy from being derailed. Twice Reagan's California team would
use the pretext of Allen's Japan business profits to drop him—once five
days before the election, and again permanently a year later. Little noticed
at the time was the fact that the key architect in the plans for Allen's
permanent removal was Deaver.26
The Restoration of Arms
Sales to W.A.C.L Countries
Deaver's double duty as Taiwan agent and deputy campaign director
was reported in the U.S. press, while his lobbying for Guatemalan
businessmen has been noticed by radical Latin America watchers. No one
has ever noted that through the 1980 campaign Deaver and Hannaford had
one other international account: the military dictatorship of Argentina, by
far the most notorious of Latin America's death squad regimes.
Argentina
Martinez de Hoz
Argentina's image problem in America was even more acute than
Guatemala's. How to put a constructive face on the disappearance and
presumed murder of between 6000 and 15,000 persons? The response of
Deaver and Hannaford was to bring to the United States as apologist the
junta's leading civilian, Economy Minister Martinez de Hoz, and allow
him to address the United States through Reagan's radio broadcasts. Here
is a sample of their description of what they called "one of the most
remarkable economic recoveries in modern history."
Today, Argentina is at peace, the terrorist threat nearly eliminated.
Though Martinez de Hoz, in his U.S. talks, concentrates on economics, he
does not shy from discussing human rights. He points out that in the
process of bringing stability to a terrorized nation of 25 million, a small
number were caught in the cross-fire, among them a few innocents...If
you ask the average Argentine-in-the-street what he thinks about the state
of his country's economy, chances are you'll find him pleased, not
seething, about the way things are going.27
Distasteful as this Deaver-Hannaford apologetics for murder may
seem today, the real issue goes far beyond rhetoric. Though Deaver and
Hannaford's three international clients—Guatemala, Taiwan, and Argentina—all
badly wanted a better image in America, what they wanted even
more urgently were American armaments. Under Carter arms sales and
deliveries to Taiwan had been scaled back for diplomatic reasons, and cut
off to Guatemala and Argentina because of human rights violations.
When Reagan became President, all three of Deaver's international
clients, despite considerable opposition within the Administration, began
to receive arms. This under-reported fact goes against the public image of
Deaver as an open-minded pragmatist, marginal to the foreign policy
disputes of the first Reagan administration, so that his pre-1981 lobbying
activities had little bearing on foreign policy. The details suggest a different
story.
Argentina could hardly have had a worse press in the United States
then when Reagan took office. The revelations of Adolfo Perez Esquivel
and of Jacobo Timmerman had been for some time front page news. This
did not deter the new Administration from asking Congress to lift the
embargo on arms sales to Argentina on March 19, 1981, less than two
months after coming to office. General Roberto Viola, one of the junta
members responsible for the death squads, was welcomed to Washington in
the spring of 1981. Today he is serving a 17-year sentence for his role in the
"dirty war."
Though the American public did not know it, the arrangements for
U.S. aid to Argentina included a quid pro quo: Argentina would expand its
support and training for the Contras, as there was as yet no authorization
for the United States to do so directly. "Thus aid and training were
provided to the Contras through the Argentinian defense forces in
exchange for other forms of aid from the U.S. to Argentina."28 Congressional
investigators should determine whether the contemporary arms
deals with Deaver's other clients, Guatemala and Taiwan, did not contain
similar kickbacks for their contra proteges.
But aid for the contras was only one part of a covert Reagan grand
design for Central America in which Argentina would play the active role.
This involved, among other things,
...the training of more than 200 Guatemalan officers in 'interrogation
techniques' (torture) and repressive methods
...participation in the training
at U.S. military bases of officers and elite troops of the Salvadorean
army
...training and combat leadership for incursions by Somocista bands
based in Honduras
...logistic and economic support for the...plot to
overthrow the Sandinista regime
...the dispatch of at least fifty more
officers to Honduras as para-military troops to intervene in counterrevolutionary
activities throughout the region, particularly against
Nicaragua
...the supply of arms and ammunition to the Guatemalan
regime
...direct participation in torture sessions in Guatemala, and—
together with Israeli officers—the creation of an 'intelligence center' in
that country.29
Argentina eventually became one of the two principal reasons why
Reagan's first Secretary of State, Alexander Haig, resigned on June 25,
1982. (The other area of disagreement was over Israel's invasion of
Lebanon.) Haig later charged that his official policy of siding with Britain
against Argentina (supported by Reagan, whose closest personal ally
abroad was Margaret Thatcher) had been seriously undercut, not just by
Ambassador Jeane Kirkpatrick, but by someone above her in the White
House.
There were contacts made with Argentinian officials by the White House
which were neither discussed with me nor cleared with me and which had
the practical effect of confusing the issue...This helped confirm that the
outcome [the Falkland Islands war] would be inevitable.30
William Clark, Reagan's official national security adviser, purported
to refute this charge by saying that all of his contacts with foreign officials
had been cleared with Haig. However it was Deaver, not Clark, whom
Haig suspected of offsetting his tilt against Argentina. "At an NSC
session...Haig had observed Kirkpatrick passing Deaver a note. Concluding
that Kirkpatrick was using Deaver to prime Reagan...Haig told
Clark that a 'conspiracy' was afoot to outflank him."31 Haig's paranoia may
have been justified. Soon Deaver (allied with Clark, whom Deaver had
selected as Allen's replacement) was to play a principal role in dropping
Haig, as he had earlier in dropping Allen.32
What reason could anyone in the White House have for putting U.S.
relations with Argentina ahead of relations with the United Kingdom? It is
hard to think of any reason more urgent than that of agreement for covert
Argentinian support of the contras, "which was broken by U.S. support
for Britain in the 1982 Falklands War."33 Although some Argentine
advisers remained in Honduras, the pull-out of the Argentine government
produced a temporary setback in contra operations, followed in December
1982 by a major shake-up in the contras' nominal political leadership.34
Guatemala
Lucas Garcia
Restoring arms deliveries to Guatemala proved a little more difficult
than to Argentina. "The election of Reagan coincided with the bloodiest
outbreak of Guatemalan death squad actions in history. Almost five
hundred deaths a month, almost all attributed to the right, were being
reported by the American Embassy, but even that figure was considered
low by most other monitoring groups. Piles of mutilated bodies were being
discovered every morning throughout the country."35 President Lucas
Garcia, alleged to have personally raised half a million dollars from
Deaver's Guatemala businessmen for the Reagan campaign, was said in
February 1981 by the New York Times (citing Amnesty International) to
be directly supervising the security agency in charge of the death squads.36
The May 4 hearing of the Senate Foreign Relations Committee, in
which the administration announced that it was disposed to give aid to
Guatemala, followed two days of hard-hitting stories in the press about
that country's increasing violence, including the murders of 76 leaders of
the moderate Christian Democratic Party. When Congress balked at
certifying that Guatemala was not violating human rights, the administration
acted unilaterally, by simply taking the items Guatemala wanted off
the restricted list.37
Taiwan
On the issue of restoring arms sales to Argentina and Guatemala there
was no dissent within the Reagan administration, all of whom were eager to
repudiate Carter's human rights policies as quickly as possible. The
arguments against arms sales to Taiwan, however, were geopolitical as well
as ideological. The more seriously one chose to believe in a Soviet threat,
the more important it seemed not to threaten the growing strategic
relationship between Washington and Peking.
Reagan was confronted with this geopolitical consensus as soon as he
took office. After a year of fumbling, Haig (State), Weinberger (Defense)
and Casey (CIA) united on a recommendation to Reagan: Taiwan should
not receive the new weapons it was asking for. In August 1982 the State
Department, after another visit to Peking by George Bush, announced a
joint communique with China, in which the United States undertook to
"reduce gradually its [weapons] sales [to Taiwan]...leading over a period of
time to a final resolution."38
This result appeared to experts to represent a victory of "Geopolitics
over Ideology."39 But while the communique called for a reduction, arms
sales to Taiwan in fact increased, to new levels of $530 million in 1983, and
$1,085 million in 1984. Each new arms sales announcement was greeted
with loud protests from Peking, and with increasing rumors and reports of
Sino-Soviet rapprochement.40 Once again, we now know that on the issue
of Taiwan arms sales Haig at the State Department was being over-ruled by
the Reagan White House staff.41
Deaver, WACL, and the Contras
A.C. Rubel (L)
The lobbying for increased U.S. arms sales came of course from at
home as well as from abroad; and primarily from the American Security
Council, the chief real-life incarnation of that military-industrial complex
which President Eisenhower warned the country about a quarter of a
century ago. Two prominent backers of the ASC (oilmen A.C. Rubel and
Henry Salvatori) were also part of the trio of Los Angeles millionaires who
had launched Reagan into politics after the Goldwater debacle of 1964.42
Holmes Tuttle
The third, Holmes Tuttle, lent his weight to the small meeting of May
1974 in Reagan's home where the decision was made for Reagan to begin
his drive for the presidency. Four of Reagan's top aides attended that
meeting: Meese, Nofziger, Deaver, and Hannaford. The Deaver and
Hannaford agency was launched in 1974 as part of that presidential
strategy.
The international clients taken on by Deaver and Hannaford Taiwan, Guatemala, and Argentina—were longtime causes of the A.S.C as
well.43 More importantly, the ASC helped out Taiwan's foreign policy
creation, the World Anti-Communist League, by setting up an American
affiliate for it, the American Council for World Freedom (A.C.W.F). The
young executive secretary of the A.C.W.F, Lee Edwards, was by 1980 the
registered lobbyist for W.A.C.L's Taiwan chapter, and also of Argentina.
Edwards also wrote a Reagan biography.
In 1976 Edwards' A.C.W.F pulled out of W.A.C.L, on the grounds that it
was becoming racist. The new U.S. W.A.C.L chapter, the Council on
American Affairs (C.A.A), was however also headed by an A.S.C man:
Roger Pearson of A.S.C's editorial board. By 1980, W.A.C.L had been
largely taken over by former Nazis, SS men, Nazi collaborators, and
outspoken anti-Semites. Most embarrassing, from the point of view of a
"law and order" candidate like Reagan, was the presence at W.A.C.L
conferences of wanted right-wing terrorist murderers, and, perhaps worse,
bank-robbers.44
The Reagan team, both before and after the 1980 election, appears to
have adopted a two-fold approach to the problem of right-wing W.A.C.L
terrorism. On the one hand they fostered a careful program to improve
W.A.C.L's image, badly tarnished after British and American W.A.C.L
members had protested W.A.C.L's penetration by anti-Semites. On the
other, they moved through Deaver's clients in Guatemala to make selected
terrorists the lynch pins of the Reagan administration's policies in Central
America.
Two men appear to have been central in this double policy: General
John Singlaub, who after Reagan's election became W.A.C.L's new world
chairman, and Mario Sandoval Alarcon, the Guatemalan godfather and
W.A.C.L leader who got to dance at Reagan's inaugural ball. The public
relations work for both men, at least prior to the election, was in the hands
of Mike Deaver.
Singlaub was a long-time veteran of CIA and DOD "unconventional
warfare" operations, which he once explained as including "terrorism,
subversion and guerrilla warfare...sabotage...support to resistance groups
...black and gray psychological operations."45 Singlaub was little-known
until 1978, when he was transferred from his Army Command in South
Korea for publicly denouncing Carter's announced plans to withdraw U.S.
troops from that area. A spirited defense of Singlaub and his position was
promptly prepared for one of Reagan's 1978 broadcasts by Deaver and
Hannaford.46
Mitch WerBell
Little noticed at the time was the fact that ten days before his
retirement, in May 1978, Singlaub attended a meeting of right-wingers
who "didn't think the country was being run properly and were interested
in doing something about it." The meeting was hosted by Mitch WerBell, a
conspiratorial colleague of Singlaub from their OSS days together at
Kunming in China.47 As we have seen, Singlaub then began a series of
co-ordinated visits to Central America, with Generals Graham and
Sumner, laying the basis for Reagan's current support of the contras in
Nicaragua. Singlaub's visits focused on Guatemala, where in 1982 WerBell would support a coup attempt by the National Liberation Movement
(MLN) of Mario Sandoval Alarcon and Lionel Sisniega Otero.48
Singlaub's link-up with Sumner in 1980 was particularly significant to
the Guatemalans, since for a year Sumner had been one of the most
prominent contra contacts in Washington who was "looking for some way
to help Nicaraguans who wanted to fight" the Sandinistas.49 After the
election that most prominent supporter would become Singlaub himself,
by a series of events which seem to have been pre-arranged.
The most important event was the creation of a new United States
chapter of W.A.C.L, to replace one which had been taken over by crackpots
and racists. Singlaub did this on November 22, 1981, four days after a
secret approval by Reagan of a CIA plan to begin direct assistance to the
contras.50
The weeks after Reagan's election had seen a number of rapid
developments. Some of Sandoval's contra group, headed by Colonel
Enrique Bermudez who had been Sumner's contact, departed for training in
Argentina. (This was training in terrorism; and one of the trainers is now
wanted for his leadership of a cell attempting, by bombings and kidnappings,
to destabilize the new Argentine civilian government.51) The
Salvadorean death squad leader, Major Roberto d'Aubuisson, entered the
United States illegally (the Carter administration refused to issue him a
visa), and had conferences "with members of the Reagan transition team
and with members of the staff of...Senator Jesse Helms."52
Meanwhile Singlaub flew to Australia to address W.A.C.L's Asian
contingent, the Asian People's Anti-Communist League (A.P.A.C.L). He
correctly predicted that there would be closer relations between the U.S.
and W.A.C.L countries, and hinted that he himself would be helpful even
though he would not be a member of the new administration.53 This public
healing of the rift between W.A.C.L and the United States had begun the
previous July in Geneva, when the nominal head of W.A.C.L's U.S. chapter
(a white racist who had once urged his state of Mississippi to secede from
the Union) was upstaged by the presence at the W.A.C.L Conference of
Singlaub's close friend Ray Cline. Cline was another strong Reagan
supporter and a foreign policy adviser; he flew to Taiwan after the election
to convey the message that "the new Reagan Administration will enhance
U.S. relations with Taipei without damaging ties with Peiping [sic]."54
Singlaub, WACL, and LaRouche
In the light of W.A.C.L's subsequent importance to the Reagan policy
of supporting the contras, it is significant that the approaches of Cline and
Singlaub to W.A.C.L began before the 1980 election. Singlaub and Cline
were the logical team to consolidate the Reagan-W.A.C.L alliance, since their
acquaintance with W.A.C.L's members and drug-financed intrigues went
back to the 1950's, if not earlier. Singlaub had first met Cline, along with
four future backers of CIA-Cuban operations (Howard Hunt, Paul
Helliwell, Lucien Conein and Mitch WerBell) in a small O.S.S mission at
Kunming in China, at the very center of the World War II K.M.T drug
traffic. According to the Wall Street Journal, O.S.S payments at this base were
frequently made with five-pound shipments of opium.55 The sixth and
most mysterious of these men, Mitch WerBell, would himself be indicted
on drug smuggling charges in 1976, two years before he began an extended
and little-noticed relationship with John Singlaub and Lyndon LaRouche.
The other five men from the O.S.S Kunming mission went on into the
CIA, and in the 1950's served in or supported CIA covert operations in
Asia. Helliwell, from his law office in Miami, organized the arms supply to
General Li Mi's drug-growing K.M.T troops in Burma, as he would later
organize support for the CIA's Cuban sabotage teams in Miami (see
Chapter III).56 Lucien Conein went on to be the CIA's liaison with the
Corsican gangsters of Saigon; and, according to Alfred McCoy, "did not
pass on" to Washington the information he learned about the large
shipments of drugs these Corsicans were making to Europe, while they
gave the 1965 Saigon government "a fixed percentage of the profits."57
Howard Hunt was in 1954 assigned to a black propaganda psychological
warfare operation based in Tokyo.58
More directly impinging on what became W.A.C.L were the activities
of Cline as CIA station chief in Taiwan (1958-62), and Singlaub as deputy
CIA station chief in South Korea (ca. 1950-52). Cline is said to have helped
Taiwan found its Political Warfare Cadres Academy at Peitou, which has
through its training program developed a conspiratorial Latin American
fraternity of thousands of military and security officers, including Roberto
d'Aubuisson. In this way the Kuomintang created in Latin America
"carbon copies of what they had created in Taiwan: a politicized military
whose first loyalty was to the party, then to the military, and finally to the
nation."59
All of this was in fulfillment of recommendations drafted in 1959 by
General Richard Stilwell for a special Presidential Committee under General William Draper reporting to President Eisenhower: that the U.S.
help develop "higher level military schools" with political-economic
curricula in the Third World, to encourage local armies to become "internal
motors" for "socio-political transformation."60
Former U.S. intelligence officers have also suggested that the funding
of A.P.A.C.L, and of the initial preparatory meetings in 1958 for W.A.C.L,
came from U.S. Embassy Counterpart funds in Taiwan to which Cline had
access.61 As CIA deputy chief in South Korea during the Korean War,
Singlaub is also said to have had a hand in developing what eventually
became the Korean Central Intelligence Agency, the other chief partner in
setting up A.P.A.C.L.62
In 1954, when A.P.A.C.L was founded in Taiwan, its first Latin
American affiliate was founded in Mexico City by Howard Hunt. Hunt
did so in his capacity as political and propaganda chief of the CIA operation
in Guatemala; but his creation (the Interamerican Council for the Defense
of the Continent, or C.I.A.D.C) would survive to be involved in other CIA backed
coups as well, notably the Brazil coup in 1964.63 The C.I.A.D.C soon
became a vehicle for the international plotting of two of Hunt's young
Guatemalan proteges: Lionel Sisniega Otero, who in 1954 was employed
on clandestine radio operations by Hunt's assistant David Phillips, and
Sisniega's mentor, the future "Godfather," Mario Sandoval Alarcon.64
By accident or by design, the simultaneous creation of A.P.A.C.L and
C.I.A.D.C in 1954 also had the effect of creating a conspiratorial China
Lobby for Taiwan overseas, at precisely the time that the activities of the
old conspiratorial China Lobby in Washington were being exposed and
neutralized. When the first provisional steering committee for a combined
W.A.C.L was announced from Mexico City in 1958, its General Secretary
was veteran China Lobbyist Marvin Liebman, who earlier had organized
Washington's "Committee of One Million" in support of Taiwan. Lee
Edwards, Liebman's successor at the Committee of One Million, organized
the first U.S. Chapter of W.A.C.L, with officers from the leadership of the
American Security Council.65
From the China Lobby bribes of the early 1950's to the contra raids of
the 1980's, there have been continuing reports linking Taiwan's and
W.A.C.L's activities to profits from the international narcotics traffic (see
Chapter III). The situation was aggravated by the evolution of the 1950's
China Lobby into the 1960's Cuban exile-Somoza Lobby, particularly
when ex-CIA C.O.R.U Cubans like Orlando Bosch, dropped from the CIA
for their terrorist and/or drug trafficking activities, were simply picked up
by Somoza.
It made sense that Somoza, when his long-time backers were
abandoning him in 1979, should have tried to hire Shackley's associate
Tom Clines to work for him, along with Bosch. Shackley and Clines, by
coincidence or not, personified the CIA-mafia connection that successive
CIA Directors found impossible to eliminate. When Richard Helms closed
down anti-Castro operations in Miami, dispersed its U.S. and Cuban
personnel, and sent Shackley and Clines to manage the covert war in Laos,
the two men were moving from a local drug-linked operation to a more
distant one. Significantly, the Florida mob went with them. Two years
after they were transferred to Laos in July 1966, Santos Trafficante, a key
figure in the CIA-mafia assassination plots against Castro, was seen
contacting local gangsters in Hong Kong and Saigon.66
But the Shackley-Clines links to Latin America increased as their
former agents were dispersed there. One of these men was John Martino, an
old mafia casino associate of Santos Trafficante in Havana. In 1970, posing
as a mafia representative, John Martino became a business associate of
President Arana, and the CIA control for Mario Sandoval Alarcon—two
of the Guatemalans who attended Reagan's 1981 inaugural ball.67
We see then that the Reagan-W.A.C.L alliance was forged by two men,
Ray Cline and John Singlaub, whose connections to W.A.C.L's Asian
patrons went back three decades or more. One's first assumption is that, as
loyal Americans, they would be more likely to approach W.A.C.L on behalf
of Reagan than the other way round. Singlaub, in particular, has a
reputation of being a "straight arrow," a "boy scout," for whom subversive
intrigue would be anathema.
There are nonetheless disturbing indications that Singlaub, at least,
may have been working for a hidden agenda that went far beyond naive
loyalty to a Republican presidential candidate. It is hard to explain his
dealings in the same period 1978-82 with his former Kunming O.S.S
colleague Mitch WerBell, and more importantly with WerBell's employer
since 1977, Lyndon LaRouche. About his political activities with the
LaRouche movement Singlaub has at the very least been less than candid.
What makes this disturbing is that the LaRouche movement was then
suspected of looking for a dissident general to lead a military coup.68
We have already seen that in May 1978, ten days before his retirement,
Singlaub attended a meeting of right-wingers who "didn't think the
country was being run properly and were interested in doing something
about it." The meeting was hosted by Mitch WerBell, who in 1982 would
travel to Central America in support of an attempted Guatemalan coup on
behalf of W.A.C.L leaders Mario Sandoval Alarcon and Lionel Sisniega
Otero.69 WerBell's career of covert activities in the Caribbean also involved work for Cuban dictator Batista in 1959, Dominican Republic dictator
Imberr in 1965, and a coup operation (said by Hinckle and Turner to have
had possible Mafia backing) against Haitian dictator Duvalier in 1966.70
WerBell, when Singlaub visited him in 1978, had recently evaded
separate indictments for arms smuggling and for narcotics trafficking.71
WerBell was also in touch with "Secret Team" members such as Ted
Shackley and Richard Secord, and allegedly was paid once through the
drug-linked Nugan Hand Bank (see Chapter III) when he conducted
"operations for U.S. intelligence."72 More importantly he was also in touch
with Cuban Bay of Pigs veterans suspected of involvement in the CORU
assassination of Orlando Letelier.73
Nelson Bunker Hunt
WerBell, when Singlaub visited him in 1978, was employed as the
"personal security adviser" to Lyndon H. LaRouche, then the leader of the
so-called National Caucus of Labor Committees (N.C.L.C), a group which
previously had posed as left-wing but in fact harassed anti-nuclear and
other left-wing demonstrations with the help of the right-wing domestic
intelligence group known since 1979 as Western Goals (backed primarily
by W.A.C.L donor and Texan millionaire Nelson Bunker Hunt). Singlaub
and another leader of his U.S. W.A.C.L chapter (Anthony Kubek) joined the
advisory board of Western Goals.74 Though Singlaub left Western Goals in
1984, the organization is controlled today by Carl Spitz Channell, who in
1986 met with Oliver North "five or ten times" about his TV advertising
campaigns against political candidates opposed to contra aid.75
In 1979 General Singlaub conceded to the New York Times that he had met with two of LaRouche's party officials at the home of WerBell, but claimed that he had ...since rejected the organization. "It was so clear to me after the first three or four contacts that they wanted something from me," the general said. "They hounded me for months, they flooded me with documents, they showed up at places where I spoke."
"I think they're a bunch of kooks of the worst form, General Singlaub went on. "I've been telling WerBell that if they're not Marxists in disguise, they're the worst group of anti-Semitic Jews [sic!] I've encountered. I'm really worried about these guys; they seem to get some people."
The general was asked if any mention was made in his talks of the possibility of a military coup in the United States—an idea that has recently received currency in the party as a way to put Mr. LaRouche in power. "Well, it didn't come up in that form, but it was suggested that the military ought to in some way lead the country out of its problems," General Singlaub replied. "I guess I stepped on them pretty hard on that, and it never came up again. It was one of the first things that made me realize they're a bunch of kooks."76
Singlaub's worries about a LaRouchean military solution to America's problems, although expressed so strongly in this interview, do not appear to have been very profound or long-lived. According to Scott and Jon Lee Anderson, in 1982 Singlaub returned to WerBell's counter terrorist training camp in Powder Springs, Georgia, to lecture WerBell's trainees. Many of these were security forces for the organization of Lyndon LaRouche, then the anti-Semitic leader of the so-called U.S. Labor Party, whose security director was WerBell.77
Barbie and delle Chiaie were both deeply involved in the CAL project to identify and exterminate leftists and radical priests. Through this project delle Chiaie had advised d'Aubuisson by 1979; and at the September 1980 meeting of CAL in Argentina, delle Chiaie and d'Aubuisson met and arranged for weapons and money to be sent to d'Aubuisson in El Salvador.79
That 1980 CAL Conference was presided over by Argentine General Suarez Mason, today a fugitive wanted on charges arising from the Argentine junta's death squads. In attendance were Bolivia's dictator, Garcia Meza, wanted by U.S. drug authorities for his involvement in cocaine trafficking, and Argentine President Videla, today serving a life sentence for his policies of mass murder and torture. A featured speaker at the conference was Mario Sandoval Alarcon, who had brought his protege d'Aubuisson and arranged for him to be put in touch with delle Chiaie.
What was being brokered at the September 1980 CAL Conference was nothing less than an "Argentine solution" of death squad dictatorships from Buenos Aires to Guatemala City. The inspiration and direction of this scheme was however not just Argentine, but truly international, involving the Italo-Argentine secret Masonic Lodge P-2 (of which General Suarez Mason was a member), and possibly through them the financial manipulations by insiders of the Milan Banco Ambrosiano and Vatican Bank.80
P-2 has come under considerable scrutiny in Italy, where it began, because of its on-going involvement in intelligence-tolerated coup attempts, bank manipulations, and terrorist bombings. All of this has contributed to a right-wing "strategy of tension," a tactic of developing a popular case for right-wing order, by fomenting violence and disruption, and blaming this when possible on the left. Stefano delle Chiaie was perhaps the master activist for P-2's strategy of tension, assisted by a group of French intelligence veterans working out of Portugal as the so-called press agency Aginter-Presse.81 The Aginter group had their own connections to W.A.C.L in Latin America before delle Chiaie did, especially to the Mexican chapter (the so-called "Tecos") and to Sandoval's W.A.C.L chapter in Guatemala.82
According to the Italian Parliamentary Report on P-2:
P-2 contributed to the strategy of tension, that was pursued by right-wing extremist groups in Italy during those years when the purpose was to destabilize Italian politics, creating a situation that such groups might be able to exploit in their own interest to bring about an authoritarian solution to Italy's problems.83
Delle Chiaie was a principal organizer for three of the most famous of these incidents, the 1969 bomb in the crowded Piazza Fontana of Milan (16 deaths, 90 injuries), the 1970 coup attempt of Prince Valerio Borghese (a CIA client since 1945), and the Bologna station bombing of August 2, 1980 (85 deaths, 200 injuries). In December 1985 magistrates in Bologna issued 16 arrest warrants, including at least three to P-2 members, accusing members of the Italian intelligence service SISMI of first planning and then covering up the Bologna bombing.84 One of these 16 was P-2's leader Licio Gelli, who had spent most of the post-war years in Argentina.
A small group of anarchists, penetrated by delle Chiaie's man Mario Merlino, were blamed at first for the Piazza Fontana bombing, even though Sismi knew within six days that delle Chiaie was responsible, and Merlino had planted the bomb.85
After 1974, when the right-wing "strategists of tension" lost critical support with the ending of the Greek, Portuguese, and Spanish dictatorships, they appear to have looked increasingly for new friendly governments in Latin America. Delle Chiaie began to work for Chile's service D.I.N.A in 1975, the first contacts having been made through Aginter by Michael Townley, who would later murder Letelier with the help of CORU Cubans for D.I.N.A.86 (Delle Chiaie is said to have come from South America to Miami in 1982, with a Turkish leader of the fascist Grey Wolves who was a friend of the Pope's assassin Mehmet Agca.87)
The P-2's support for Latin American terror seems to have been in part a matter of internal Roman Catholic politics: an attempt by one faction to use right-wing death squads to eliminate the Church's liberation theologians and moderate Christian Democrats. Both the contras and Mario Sandoval Alarcon were part of the anti-liberationist campaign: the contra radio maintained a steady propaganda campaign against the Maryknoll Sisters in Nicaragua; Lau of the contras murdered Archbishop Romero of El Salvador; and Lau's patron Sandoval, at the 11th WACL Conference in 1978, denounced the "intense Marxist penetration...acting within the highest echelons of the Catholic hierarchy."88 During the two years after the CAL adopted the Banzer Plan in 1978, "at least twenty eight bishops, priests, and lay persons were killed in Latin America; most of their murders were attributed to government security forces or rightist death squads. That number multiplied after 1980 as civil war spread through Guatemala and El Salvador."89 We have already seen how Reagan's termination of the Carter "human rights" policies was followed by the decimation of the Guatemalan Christian Democrats.
The CAL/P-2 connection was and remains a drug connection as well. The terrorist delle Chiaie has been accused of ties to some of the French Connection heroin merchants who had relocated to Italy; while CAL Chairman Suarez Mason, according to the Italian magazine Panorama, became "one of Latin America's chief drug traffickers."90
Sindona's U.S. investments were partnered by the Continental Illinois bank headed by Nixon's first Treasury Secretary, David Kennedy, and his interests were represented by the law firm of Nixon and his Attorney General John Mitchell. "In Italy, Sindona orchestrated the efforts of the neo-Fascist deputy Luigi Turchi to garner support for Nixon's election campaign. Sindona even offered $1 million, on condition of anonymity, to CREEP treasurer Maurice Stans. The offer was refused."98 Turchi's efforts were co-ordinated by Philip Guarino of the Republican National Committee, a P-2 associate later implicated in the plotting to help Sindona escape prosecution.99
We have seen how in 1980 Cline's associate, Michael Ledeen, published an article (at the beginning of the 1980 election campaign) "savaging Admiral Stansfield Turner for forcing Ted Shackley [one of Edwin P. Wilson's senior CIA contacts, a veteran of the anti-Allende operation] out of the agency."100 A year later Michael Ledeen, in his new capacity as the Reagan State Department's expert on terrorism, was now in a position to help close off the investigation of those (specifically Shackley and von Marbod) who were being investigated along with Edwin Wilson, perhaps the world's most notorious ex-CIA terrorist.101
...had evidence that "S.I.S.M.I was the architect of the scandal over Billy Carter," and that the material in this case was gathered mostly by Pazienza and by his American friend Michael Ledeen...." Pazienza availed himself of S.I.S.M.I both for the use of some secret agents and for the expenses of organizing the scandalous plan. It seems that the organizers got a huge payoff for 'Billygate.' Moreover, [S.I.S.M.I chief] Santovito [a P-2 member] and Pazienza got great advantages in return from American officials."102
Ledeen published his Billygate stories in three pro-Israeli publications: the New Republic of Martin Peretz, and two journals controlled by Sir James Goldsmith, the chairman of the Banco Ambrosiano-linked oil company BRISA (see below), and later one of the multimillionaires consulted by Reagan in his Project Democracy.103
In 1980 Ledeen was also in high gear, allegedly again with assistance from Pazienza, as a propagandist for the notion of a terrorist threat requiring a beefed-up U.S. intelligence response. Given access in 1980 to a Czech defector from twelve years earlier (Jan Sejna), Ledeen elicited from him the information, which Sejna had never volunteered in his extensive CIA debriefing, that the Soviet Union maintained a network of terrorist training camps as part of its plan for global domination. According to Herman and Brodhead, Ledeen had Sejna reaffirm the contents of a purported document on Soviet sponsorship of terrorism which Sejna had willingly claimed to be authentic a decade earlier, and which was in fact a CIA forgery shown to Sejna for the purposes of testing his credibility.104 This document and corroboration then became central to the case built by Ledeen and his friend Claire Sterling to show that the KGB and Bulgarian drug traffickers had plotted to have the Turkish fascist Mehmet Agca kill the Pope.105 This story was of course augmented by the "confession" of the assassin, whose testimony was later discounted as not credible. This confession now appears to have been generated by P-2 S.I.S.M.I agents linked to Ledeen, among whom may or may not have been Pazienza.106
What inspired Michael Ledeen's zeal on behalf of Reagan and the shadow network? European journalists have suggested that an unspecified "huge payoff to the S.I.S.M.I P-2 organizers of Billygate was followed by a payment of at least $120,000 plus expenses from S.I.S.M.I to Ledeen in 1980-81, after Ledeen "sold old U.S. intelligence reports to S.I.S.M.I at stiff prices."107 But there are indications that Ledeen had an affiliation, not just with S.I.S.M.I, but (like his ally Pazienza) with P-2. There are unexplained stories that "Ledeen had links with Gelli...and that Ledeen, on behalf of the State Department, had tried to buy 480 P-2 files photocopied by the Uruguayan interior ministry" after a raid provoked by the P-2 scandal revealed by the investigation of Sindona.108
It is obviously a convenient arrangement when P-2 contributions and favors to a right-wing U.S. President can be followed by the release of $10 million in unvouchered CIA funds for political use by P-2. No doubt their knowledge of such arrangements must have fueled the zeal of Carter and Turner to cut back on the CIA's clandestine services. Conversely, the CIA's cutback on clandestine operations and subventions spelled both political and financial disaster for parallel operations, such as Wilson's and Sindona's, which had fattened on CIA handouts. The end of U.S. intelligence subsidies to Wilson's company Consultants International is clearly responsible for Wilson's move into the illegal Libyan deals for which he was eventually jailed. The same drying up of the CIA cash flow to right-wing assets appears to have contributed to the failure of Calvi's Banco Ambrosiano; and of another intelligence-related bank whose operations interlocked heavily with Wilson's: the drug-linked Nugan Hand Bank of Australia.109 Thus CIA reforms had the effect of building a powerful coalition of both Americans (ousted CIA clandestine operators, the Taiwan-Somoza lobby, the A.S.C) and foreigners (W.A.C.L, P-2), determined to restore the clandestine operations which had been cut back by four different directors of central intelligence (Helms, Schlesinger, Colby, and Turner).110
Whatever the details, it appears that the P-2 Republican connection remained as healthy in 1980 as it had been in 1972. Licio Gelli, the head of P-2, was invited by Republican bigwig Phil Guarino to Reagan's inaugural ball.111
Calvi had obviously established a bridge to the Sandinista junta's bankers, Alfredo Cesar and Arturo Cruz, and their allies such as Alfonso Robelo. By 1982 both Cruz and Robelo were working with the contras.114
In every account of the P-2/Banco Ambrosiano billion-dollar scam, the role of Somoza's Nicaragua is prominent. According to one source, it was Gelli who "smoothed the way" for Calvi's use of Somoza's offer of bank secrecy, "after several million dollars had been dropped into the dictator's pocket."115 In this period the Italian construction magnate Mario Genghini (whose name was also on Gelli's P2 lists) "was one of the biggest foreign investors in Nicaragua."116 In 1978, to avoid an investigation by the Bank of Italy, Calvi "moved the axis of [his international] fraud to Nicaragua"; one year later, as Somoza's position worsened, the fraud was moved to Peru.117
In 1981 Bishop Paul Marcinkus of the Vatican Bank "held a number of secret meetings with the convicted Calvi, which resulted in the Vatican Bank officially admitting an increase in its outstanding debts of nearly $1 billion. This was the sum that was owed to the Calvi banks in Peru and Nicaragua as a result of their having loaned, on Calvi's instructions,hundreds of millions of dollars" to companies allegedly under Marcinkus's control.118 Just one of these companies, Bellatrix, received $184 million for P-2's political purposes, which included Gelli's purchase of Exocet missiles for Argentina during the Falkland Islands War.119
P-2's political purposes also clearly involved the election of Ronald Reagan in 1980:
On April 8, 1980, Gelli wrote from Italy to Phillip Guarino... "If you think it might be useful for something favorable to your presidential candidate to be published in Italy, send me some material and I'll get it published in one of the papers here."...The favorable comments about Ronald Reagan, carefully placed by Licio Gelli, duly appeared in Italy. In January 1981, Licio Gelli was an honored guest at the presidential inauguration. Guarino later ruefully observed, "He had a better seat than I did."120
The fate of Calvi and his allies, by then ominous, was tied up with the fortunes of B.R.I.S.A, whose chairman, as previously mentioned, was Sir James Goldsmith. In 1977 the Guatemalan government (with Mario Sandoval Alarcon as Vice-President) had awarded an oil concession to B.R.I.S.A, one of whose board members was Calvi's representative Antonio Tonello. In March 1981, as the Italian investigation of Sindona led to Gelli's files and Calvi's name, the Calvi case was nearing its denouement. On May 20, 1981, exactly one week after Walters' visit to Guatemala for Reagan and B.R.I.S.A, both Calvi and Tonello were arrested (and soon convicted).
In 1980 the incoming Reagan administration had links to the Latin
American chapters of WACL, not just through P-2, but even more directly
through Republican Senator Jesse Helms. Indeed Helms became a focal
point for U.S. intelligence and Republican connections to C.A.L in Latin
America, following a visit in 1975 to W.A.C.L headquarters in Taiwan.
Helms also traveled to Argentina (via a W.A.C.L Conference in Rio) in
April 1975; and at least two of his aides, Ramon Molina and Nat Hamrick,
returned, along with Daniel Graham, in early 1976, shortly before the
Argentine generals' coup of March 24. Helms, according to Ramon
Molina, "actually encouraged the military to move in and depose President
Peron."123
The president in question was not Juan Peron, who had died in June 1974, but his widow, Isabelita, who was deposed in March 1976. This event followed from the more significant ouster in July 1975 of her mentor Jose Lopez Rega, the original fascist architect of the P-2/Italian terrorist presence in Argentina. The Argentinian army was responsible for both ousters, each of which followed a visit by Helms or his aides.
The presence on the 1975 Helms delegation of two other associates (Victor Fediay and J. Evetts Haley), and the subsequent involvement of Daniel Graham, may help explain why the relatively inexperienced Senator from North Carolina (he had been elected in 1972) would involve himself in an Argentinian military takeover. In 1975 Fediay (a Russian emigre and prewar Polish fascist) and Haley (a Texas rancher) had just helped with Richard Allen to broker a request (which was eventually turned down) for U.S. backing behind a Eurofascist secessionist coup in the Azores (sponsored by the so-called Aginter-Presse intelligence service, with which delle Chiaie was affiliated).124 One can imagine that the message to the Argentine military was similar: the U.S. could support a military takeover, perhaps even death squads and terrorists like delle Chiaie, but only if the Lopez Rega connection to the newly forming Fascist International in 1975 was eliminated.
This U.S.-Argentine connection in 1975-76 (Helms, Molina, Hamrick, Richard Stone, and Daniel Graham) would become the hard core Reagan-Sandoval-contra connection after 1980.125 We have seen how Graham and Singlaub assured Guatemalans in 1979 that "Mr. Reagan recognizes that a good deal of dirty work needs to be done."126
It was Helms who (after his aide John Carbaugh met d'Aubuisson at the September 1980 CAL Conference) received Sandoval's protege d'Aubuisson on an illegal visit in December 1980.127 (Since that time Carbaugh has worked closely with Mario Sandoval Alarcon's nephew, Carlos Midence Pivaral, to fashion a more marketable and "Republican" image for d'Aubuisson's new party, A.R.E.N.A.128) Stone, a lobbyist for Guatemala in 1980, became Reagan's special ambassador to Central America.129 In 1981-82, Hamrick, while on Helms' staff, would lobby, together with the head of the Costa Rica W.A.C.L chapter, for a friendly base for the contras in that country.130
But the most significant member of the Helms Argentine connection may have been Ramon Molina, a Cuban-American Bay of Pigs veteran who in 1976 was the apparent point of contact between his two employers, Nicaraguan dictator Somoza and Senator Helms.131 In 1975-76 Molina appears to have been Somoza's connection to renegade ex-CIA Cubans, like Orlando Bosch, whose C.O.R.U assassination activities extended to Argentina by August 1976.132 It would appear that, just as in the 1972 election Manuel Artime (another ex-CIA Cuban accused of drug trafficking) emerged as the connection between Nixon, Somoza, and the Watergate burglars, so in the 1980 election Ramon Molina emerged as the connection between Reagan and Somoza.133
The Helms camp has been very much of a right-wing embarrassment to the Reagan administration since it took office: in 1984 Helms put the life of Reagan's Ambassador to El Salvador at risk by leaking secret CIA data. In 1976 and in 1980, however, candidate Reagan was very much dependent on winning the support of Helms and his international W.A.C.L network. In 1976 the Reagan campaign appointed David Keene, an old Liebman sidekick and W.A.C.L participant, to be chief delegate hunter in the southern states. In 1980 a campaign aide, Belden Bell, traveled to Latin America and met both Deaver's Amigos and Ramon Molina.134 What may have interested the Reagan campaign in Molina was his capacity as a representative of Somoza's personal fortune, in whose employ he used his CIA training as a strong-arm man and enforcer (he allegedly once broke the jaw of a South Carolina concrete businessman). Somoza, until his assassination in September 1980, was said to be funding terrorist activities through CAL as a way of building an international neofascist coalition for his return.135
It is clear that the Reagan administration has since backed away from many of its old C.A.L proteges, usually after revelations linking them to the drug traffic. It has relegated d'Aubuisson to the background, after a plane belonging to one of his financial supporters was detained in Texas with a cargo of $5.9 million in cash. It has helped extradite Pagliai (the younger of the two Italian terrorists) from Bolivia, after Pagliai was detected by the DEA at a high-level drug-traffic meeting in 1981.136
Eventually the Reagan administration helped ease both the Bolivian and the Argentine dictatorships out of power. After the failure in 1982 of a Guatemalan coup plot by Sandoval's associate Lionel Sisniega Otero (plotting with WerBell, the OSS colleague of Singlaub and Cline), the U.S. eventually accepted a civilian government headed by a Christian Democrat, of the party targeted by Sandoval and Sisniega for extermination.
In marked contrast, the Reagan commitment to the contras has been unswerving. Modifications to its policy have been limited to a search for better personnel, as Congressional opposition mounted to the contra record of raping peasants and torturing social workers to death. In September 1982 the CIA reorganized the contra directorate, and sent a new station chief to Honduras, with the task "of getting the Argentines out and getting the war back under control."137 In late 1983 the CIA began its own covert operations against Nicaragua, cutting out the contras, and reorganizing their F.D.N directorate yet again.138
However the CIA, inevitably, was faced with a disposal problem. A
handful of contra field officers were executed for various crimes, chiefly the
murder of one of their peers. But the CIA was reluctant to send Argentine
terrorists back to their home country at a time when the civilian
government was barely establishing itself. Ricardo Lau, the murderer of
Archbishop Romero, was detached from the contra hierarchy, but
remained in Honduras to be the mastermind of the death squad operation of
the CIA's and CAL's Honduran protege, General Gustavo Alvarez Martinez.139 Alvarez was the point-man for the CIA-contra presence in
Honduras, and even the godfather to the adopted daughter of the new CIA
chief. When he was ousted in 1984 the CIA changed its station chief yet
again, and Lau reportedly left for another country.
These cosmetic changes of personnel do not appear to have reached to the level of eliminating the old CAL presence in the contras. Enrique Bermudez, the link between Sandoval's Guardia proteges and Washington, has remained through each successive FDN shake-up. As for the international drug traffickers, their interest in maintaining the contra status quo in Honduras was revealed when the FBI broke up a drug-financed plot in Miami to assassinate the elected Honduran president and restore Alvarez to power.140
Since December 1985 it has become clear that the CIA contra operation has become as intermingled with drug trafficking as the old CIA Cuban exile operations which had had to be closed down in Miami (see Chapter III). In December 1985,
...the Associated Press cited a CIA report alleging that a "top commander" of the Costa Rica-based guerrillas had "used cocaine profits to buy a $250,000 arms shipment and a helicopter."...Two Nicaraguan smugglers convicted in the largest cocaine seizure in West Coast history—430 pounds— admitted that they passed drug profits on to the contras...A leading Bay Area fund-raiser for the Honduras-based Nicaraguan Democratic Force, the largest contra group, was identified in 1984 by the Drug Enforcement Administration as "the apparent head of a criminal organization responsible for smuggling kilogram quantities of cocaine into the United States."141
The possibility that the contra operation serves as a cover for the Latin American drug connection does not seem to have occurred to the Reagan administration. On the contrary, its pressures to resume Congressional aid to the contras this year were not deterred by the revelation that the FBI was "examining assertions that cocaine was smuggled [into the United States] to help finance the rebels' war effort."142 Since then former Ambassador Robert White has charged that the Administration has attempted to kill this FBI inquiry. The stage has been set for a potentially explosive Senate investigation.
A different question is whether the funds from Guatemala, P-2, Somoza, and other W.A.C.L sources, helped generate the private "verbal agreements" that Sandoval Alarcon referred to. The recycling of profits and AID funds from foreign countries back into American elections is perhaps one of the largest and least discussed scandals of the last three decades. W.A.C.L countries in particular, whose survival and affluence so often depend on U.S. support, have repeatedly been at the center of such rumors.
This would seem to be an appropriate topic for any Senate investigation into any illegal contra activities and cover-ups. But Congress in the past has proven most reluctant to pursue the question of illegal foreign funding in electoral campaigns. Renata Adler has described how the Congressional inquiry into Watergate faded at the point when traces were uncovered of large funds pumped into the Nixon campaign from the Far East.143 Nor did Republicans pursue similar allegations that dogged the campaign of even that cleanest of candidates, Senator George McGovern. Silence on such matters serves the interests of both parties.
Some of the points made by Renata Adler, a member of the staff investigating Nixon for the House impeachment inquiry, bear closely on the Reagan-WACL connection. She referred to theories "that Nixon was driven from office by a conspiracy within government itself—more specifically, within the CIA." And she drew attention to the inability of the CIA "to give any satisfactory account" of its involvement in the Southeast Asian narcotics traffic (where its airline Air America collaborated with members of Taiwan's WACL Chapter in supplying the opium growers of the Golden Triangle).144
Adler did not refer specifically to the very efficient sabotaging of the Nixon White House by Howard Hunt, nor to the fact that Hunt's White House services went into their disastrous high gear after the June 1971 departure of Kissinger for Peking.145 But she specifically named Anna Chan Chennault, perhaps Taiwan's top lobbyist in Washington, as someone who had raised campaign funds for Nixon from the Philippines, Hong Kong, Japan, and South Korea.146 Citing evidence too complex to review here, she concluded that "the South Vietnamese administration, not wanting peace to be at hand just yet, used some of the enormous amounts of money we were pouring in there to bribe our Administration to stay in."147
The bribes were in the form of illicit foreign campaign contributions— possibly in 1968, and more clearly in 1972. Though she refers to him only as a Nixon "White House official," Adler refers to two distinct sub-plots where in each case a principal suspect was Richard Allen, the man who in 1980 became Reagan's principal foreign policy adviser.148 In the 1968 case, Mrs. Chennault's activities had aroused the suspicions of the Washington intelligence community, and a plethora of agencies seemed to be watching her closely. According to published reports, the FBI tapped her telephone and put her under physical surveillance; the CIA tapped the phones at the South Vietnamese embassy and conducted a covert investigation of Richard Allen. Then, a few days before the election, the National Security Agency...intercepted a cable from the Vietnamese embassy to Saigon urging delay in South Vietnam's participation in the Paris peace talks until after the [U.S.] elections. Indeed, on November 1, her efforts seemed to have paid off when President Nguyen Van Thieu reneged on his promise to Lyndon Johnson... and announced he would not take part in the exploratory Paris talks.149
There are enough similarities between Allen's career and Deaver's (both men having gone on from the post of White House official to become the registered foreign lobbyist of Asian countries) to suggest that Adler's hypothesis for the origins of Watergate (bribery by illicit foreign campaign contributions, and the potential for blackmail thus created) might help explain the workings of the Contragate mystery as well. In 1980 as in 1968 the W.A.C.L coalition apparently decided to conspire against an American Democratic incumbent, the main difference being that in 1980 the role both of illicit foreign funds and of American intelligence veterans appears to have been more overt.
Congress should certainly investigate this possibility. But there is also a chance of a searching and objective inquiry in the special prosecutor's examination of the affairs of Mike Deaver. Deaver is already under scrutiny for his lobbying activities in South Korea. Some of these involve the U.S. Ambassador in Seoul, Richard Walker, a W.A.C.L participant since as far back as 1970.
Deaver's connections with South Korea go back at least to February 1981, when he "ushered President Chun Doo Hwan of South Korea into the Oval Office to meet Reagan."150 Chun was in fact the first of the WACL dictators, shunned by Carter, to be received into the Oval Office. In a sense his visit, like Sandoval's, was a trial balloon for Reagan's new policy of tilting towards W.A.C.L and away from Carter's support of "human rights."151
Chun's visit to Reagan is said to have followed a period of intense involvement in Latin American W.A.C.L intrigue by C.A.U.S.A, the political arm of the South Korean Unification (Moonie) Church. (The links between Moon's church and the South Korean Central Intelligence Agency are so overt that a decade ago they provoked a U.S. Senate investigation.152) CAUSA officials are reported to have offered $4 million for the Garcia Meza Bolivian coup of July 17, 1980; and one of them is said to have had worked directly with Klaus Barbie in organizing the coup.153
When Congress ordered a cutoff of military aid to the contras in 1984, C.A.U.S.A worked with Refugee Relief International, a creation of Singlaub and of W.A.C.L, to ferry non-military supplies to the same contra camps. An informed observer said that "the 'big three' countries that were expected to aid the contras [militarily] were Israel, South Korea, and Taiwan."154 Robert Owen, said to have served with Singlaub as a cut-out contact between the National Security Council and the contras, is a former registered lobbyist for South Korea.155
It is unlikely that Deaver's lobbying activities were more than a small part of the apparatus securing the Reagan-WACL connection. The full story, if it could be told, would probably lead to grey intelligence-political alliances that were already in place when Deaver was a young boy. Undoubtedly Cline and Singlaub, not to mention Reagan himself, would know more about such matters.
Singlaub, at least, probably faces a Congressional investigation in the months ahead. But Contragate is not a narrowly bureaucratic or administrative scandal. Deaver's post-1984 lobbying activities have already suggested to federal investigators that he may have violated U.S. statutes. Thus he too can be made to talk about how these connections were forged. Under oath.
To be continued...next
V. Israel and the Contras
In 1979 General Singlaub conceded to the New York Times that he had met with two of LaRouche's party officials at the home of WerBell, but claimed that he had ...since rejected the organization. "It was so clear to me after the first three or four contacts that they wanted something from me," the general said. "They hounded me for months, they flooded me with documents, they showed up at places where I spoke."
"I think they're a bunch of kooks of the worst form, General Singlaub went on. "I've been telling WerBell that if they're not Marxists in disguise, they're the worst group of anti-Semitic Jews [sic!] I've encountered. I'm really worried about these guys; they seem to get some people."
The general was asked if any mention was made in his talks of the possibility of a military coup in the United States—an idea that has recently received currency in the party as a way to put Mr. LaRouche in power. "Well, it didn't come up in that form, but it was suggested that the military ought to in some way lead the country out of its problems," General Singlaub replied. "I guess I stepped on them pretty hard on that, and it never came up again. It was one of the first things that made me realize they're a bunch of kooks."76
Singlaub's worries about a LaRouchean military solution to America's problems, although expressed so strongly in this interview, do not appear to have been very profound or long-lived. According to Scott and Jon Lee Anderson, in 1982 Singlaub returned to WerBell's counter terrorist training camp in Powder Springs, Georgia, to lecture WerBell's trainees. Many of these were security forces for the organization of Lyndon LaRouche, then the anti-Semitic leader of the so-called U.S. Labor Party, whose security director was WerBell.77
The Strategy of Tension:
CAL, P-2, Drugs, and the Mafia
Reports linking W.A.C.L to drugs became particularly flagrant in the
period 1976-80, as the rift between W.A.C.L and Carter's CIA widened, and
as a new Argentine-dominated affiliate of W.A.C.L in Latin America (the
Confederacion Anti-comunista Latina, or CAL) plotted to extirpate radical
Roman Catholic priests and prelates fostering liberation theology.
Luis Garcia Meza
A high-point or low-point of the CAL plotting was reached in 1980,
when Argentine officers, bankrolled by the lords of Bolivia's cocaine
traffic, installed the Bolivian drug dictatorship of Luis Garcia Meza. Two
of the Argentine officers involved turned out to be wanted Italian terrorists,
Stefano delle Chiaie and Pierluigi Pagliai; together with the veteran Nazi
fugitive and drug trafficker Klaus Barbie, the neo-fascists seized the radio
station as a signal to launch the coup.78 Barbie and delle Chiaie were both deeply involved in the CAL project to identify and exterminate leftists and radical priests. Through this project delle Chiaie had advised d'Aubuisson by 1979; and at the September 1980 meeting of CAL in Argentina, delle Chiaie and d'Aubuisson met and arranged for weapons and money to be sent to d'Aubuisson in El Salvador.79
That 1980 CAL Conference was presided over by Argentine General Suarez Mason, today a fugitive wanted on charges arising from the Argentine junta's death squads. In attendance were Bolivia's dictator, Garcia Meza, wanted by U.S. drug authorities for his involvement in cocaine trafficking, and Argentine President Videla, today serving a life sentence for his policies of mass murder and torture. A featured speaker at the conference was Mario Sandoval Alarcon, who had brought his protege d'Aubuisson and arranged for him to be put in touch with delle Chiaie.
What was being brokered at the September 1980 CAL Conference was nothing less than an "Argentine solution" of death squad dictatorships from Buenos Aires to Guatemala City. The inspiration and direction of this scheme was however not just Argentine, but truly international, involving the Italo-Argentine secret Masonic Lodge P-2 (of which General Suarez Mason was a member), and possibly through them the financial manipulations by insiders of the Milan Banco Ambrosiano and Vatican Bank.80
P-2 has come under considerable scrutiny in Italy, where it began, because of its on-going involvement in intelligence-tolerated coup attempts, bank manipulations, and terrorist bombings. All of this has contributed to a right-wing "strategy of tension," a tactic of developing a popular case for right-wing order, by fomenting violence and disruption, and blaming this when possible on the left. Stefano delle Chiaie was perhaps the master activist for P-2's strategy of tension, assisted by a group of French intelligence veterans working out of Portugal as the so-called press agency Aginter-Presse.81 The Aginter group had their own connections to W.A.C.L in Latin America before delle Chiaie did, especially to the Mexican chapter (the so-called "Tecos") and to Sandoval's W.A.C.L chapter in Guatemala.82
According to the Italian Parliamentary Report on P-2:
P-2 contributed to the strategy of tension, that was pursued by right-wing extremist groups in Italy during those years when the purpose was to destabilize Italian politics, creating a situation that such groups might be able to exploit in their own interest to bring about an authoritarian solution to Italy's problems.83
Delle Chiaie was a principal organizer for three of the most famous of these incidents, the 1969 bomb in the crowded Piazza Fontana of Milan (16 deaths, 90 injuries), the 1970 coup attempt of Prince Valerio Borghese (a CIA client since 1945), and the Bologna station bombing of August 2, 1980 (85 deaths, 200 injuries). In December 1985 magistrates in Bologna issued 16 arrest warrants, including at least three to P-2 members, accusing members of the Italian intelligence service SISMI of first planning and then covering up the Bologna bombing.84 One of these 16 was P-2's leader Licio Gelli, who had spent most of the post-war years in Argentina.
A small group of anarchists, penetrated by delle Chiaie's man Mario Merlino, were blamed at first for the Piazza Fontana bombing, even though Sismi knew within six days that delle Chiaie was responsible, and Merlino had planted the bomb.85
After 1974, when the right-wing "strategists of tension" lost critical support with the ending of the Greek, Portuguese, and Spanish dictatorships, they appear to have looked increasingly for new friendly governments in Latin America. Delle Chiaie began to work for Chile's service D.I.N.A in 1975, the first contacts having been made through Aginter by Michael Townley, who would later murder Letelier with the help of CORU Cubans for D.I.N.A.86 (Delle Chiaie is said to have come from South America to Miami in 1982, with a Turkish leader of the fascist Grey Wolves who was a friend of the Pope's assassin Mehmet Agca.87)
The P-2's support for Latin American terror seems to have been in part a matter of internal Roman Catholic politics: an attempt by one faction to use right-wing death squads to eliminate the Church's liberation theologians and moderate Christian Democrats. Both the contras and Mario Sandoval Alarcon were part of the anti-liberationist campaign: the contra radio maintained a steady propaganda campaign against the Maryknoll Sisters in Nicaragua; Lau of the contras murdered Archbishop Romero of El Salvador; and Lau's patron Sandoval, at the 11th WACL Conference in 1978, denounced the "intense Marxist penetration...acting within the highest echelons of the Catholic hierarchy."88 During the two years after the CAL adopted the Banzer Plan in 1978, "at least twenty eight bishops, priests, and lay persons were killed in Latin America; most of their murders were attributed to government security forces or rightist death squads. That number multiplied after 1980 as civil war spread through Guatemala and El Salvador."89 We have already seen how Reagan's termination of the Carter "human rights" policies was followed by the decimation of the Guatemalan Christian Democrats.
The CAL/P-2 connection was and remains a drug connection as well. The terrorist delle Chiaie has been accused of ties to some of the French Connection heroin merchants who had relocated to Italy; while CAL Chairman Suarez Mason, according to the Italian magazine Panorama, became "one of Latin America's chief drug traffickers."90
Jose Lopez Rega
This Latin American W.A.C.L drug connection appears to have been
originally put together by former Argentine Interior Minister Jose Lopez Rega,
a P-2 member and Gelli intimate who was responsible for restoring
Peron to power in 1973 and arranging for European experts in "dirty war"
tactics to launch death squad tactics against the terrorist left. Lopez-Rega
was later said to have been directly involved with other P-2 members in the
Argentine-Paraguayan cocaine traffic, and to have used French members of
the Ricord drug network as terrorists for his underground A.A.A (Alianza
Argentina Anticomunista).91 Ex-CIA Cuban exile terrorists involved in
the drug traffic also worked with the A.A.A, as well as for Somoza.92
Auguste Ricord
Paraguayan Intelligence Chief Pastor Coronel, a C.A.L participant and
death squad coordinator, was also a smuggling partner of the Corsican
drug kingpin in Latin America, Auguste Ricord, whose network trafficked
with the Gambino Mafia family in New York.93 Michele Sindona, the
author of the Ambrosiano-Vatican Bank connection to P-2, had his own
connections to the Gambino family, which surfaced when in 1979 he used
them to stage his own "abduction" to avoid a New York court appearance.94
According to Penny Lernoux, "the P-2 crowd obtained money
from the kidnappings of well-to-do businessmen in Europe and from the
drug traffic in South America. Sindona's bank laundered money from the
notorious [Italian] Mafia kidnappers of Anonima Sequestri, who worked
with ... Ordine Nuovo."95 Significantly, Mario Sandoval Alarcon has also
been accused of resorting to the kidnapping of rich coffee-growers in
Guatemala to get financing for his political faction.96 Since the fall of the
Argentine junta and Suarez Mason in 1982-83, the AAA, abetted by delle
Chiaie, has also taken to bank robberies and kidnapping.
P-2, the Republicans, and Ledeen
But P-2 had equally strong links to both the CIA and the Republican
Party. Under President Nixon, the CIA allocated $10 million for centrist
and right-wing parties in the 1972 Italian elections. The U.S. Embassy in
Rome was acutely divided over whether the money should go through
Sindona, who appeared to have "a direct line to the [Nixon] White House,"
or Italian Intelligence Chief Vito Miceli, implicated in a 1970 CIAfinanced
coup attempt with delle Chiaie. Both Sindona and Miceli, as it
happened, were part of the P-2 connection.97 Sindona's U.S. investments were partnered by the Continental Illinois bank headed by Nixon's first Treasury Secretary, David Kennedy, and his interests were represented by the law firm of Nixon and his Attorney General John Mitchell. "In Italy, Sindona orchestrated the efforts of the neo-Fascist deputy Luigi Turchi to garner support for Nixon's election campaign. Sindona even offered $1 million, on condition of anonymity, to CREEP treasurer Maurice Stans. The offer was refused."98 Turchi's efforts were co-ordinated by Philip Guarino of the Republican National Committee, a P-2 associate later implicated in the plotting to help Sindona escape prosecution.99
We have seen how in 1980 Cline's associate, Michael Ledeen, published an article (at the beginning of the 1980 election campaign) "savaging Admiral Stansfield Turner for forcing Ted Shackley [one of Edwin P. Wilson's senior CIA contacts, a veteran of the anti-Allende operation] out of the agency."100 A year later Michael Ledeen, in his new capacity as the Reagan State Department's expert on terrorism, was now in a position to help close off the investigation of those (specifically Shackley and von Marbod) who were being investigated along with Edwin Wilson, perhaps the world's most notorious ex-CIA terrorist.101
Francesco Pazienza
Ledeen's efforts in 1980 on behalf of Shackley were paralleled by a
dirty tricks campaign on behalf of Reagan in alliance with P-2 members of
the Italian intelligence service S.I.S.M.I. The chief of these, Francesco
Pazienza, was a financial consultant of Roberto Calvi at the Banco
Ambrosiano. Pazienza was ultimately indicted in an Italian court (with
Ledeen as an unindicted co-conspirator) for luring President Carter's
brother Billy into a compromising relationship with Qaddafi during the
1980 presidential campaign. According to Edward Herman and Frank
Brodhead, the prosecuting judge ...had evidence that "S.I.S.M.I was the architect of the scandal over Billy Carter," and that the material in this case was gathered mostly by Pazienza and by his American friend Michael Ledeen...." Pazienza availed himself of S.I.S.M.I both for the use of some secret agents and for the expenses of organizing the scandalous plan. It seems that the organizers got a huge payoff for 'Billygate.' Moreover, [S.I.S.M.I chief] Santovito [a P-2 member] and Pazienza got great advantages in return from American officials."102
Ledeen published his Billygate stories in three pro-Israeli publications: the New Republic of Martin Peretz, and two journals controlled by Sir James Goldsmith, the chairman of the Banco Ambrosiano-linked oil company BRISA (see below), and later one of the multimillionaires consulted by Reagan in his Project Democracy.103
In 1980 Ledeen was also in high gear, allegedly again with assistance from Pazienza, as a propagandist for the notion of a terrorist threat requiring a beefed-up U.S. intelligence response. Given access in 1980 to a Czech defector from twelve years earlier (Jan Sejna), Ledeen elicited from him the information, which Sejna had never volunteered in his extensive CIA debriefing, that the Soviet Union maintained a network of terrorist training camps as part of its plan for global domination. According to Herman and Brodhead, Ledeen had Sejna reaffirm the contents of a purported document on Soviet sponsorship of terrorism which Sejna had willingly claimed to be authentic a decade earlier, and which was in fact a CIA forgery shown to Sejna for the purposes of testing his credibility.104 This document and corroboration then became central to the case built by Ledeen and his friend Claire Sterling to show that the KGB and Bulgarian drug traffickers had plotted to have the Turkish fascist Mehmet Agca kill the Pope.105 This story was of course augmented by the "confession" of the assassin, whose testimony was later discounted as not credible. This confession now appears to have been generated by P-2 S.I.S.M.I agents linked to Ledeen, among whom may or may not have been Pazienza.106
What inspired Michael Ledeen's zeal on behalf of Reagan and the shadow network? European journalists have suggested that an unspecified "huge payoff to the S.I.S.M.I P-2 organizers of Billygate was followed by a payment of at least $120,000 plus expenses from S.I.S.M.I to Ledeen in 1980-81, after Ledeen "sold old U.S. intelligence reports to S.I.S.M.I at stiff prices."107 But there are indications that Ledeen had an affiliation, not just with S.I.S.M.I, but (like his ally Pazienza) with P-2. There are unexplained stories that "Ledeen had links with Gelli...and that Ledeen, on behalf of the State Department, had tried to buy 480 P-2 files photocopied by the Uruguayan interior ministry" after a raid provoked by the P-2 scandal revealed by the investigation of Sindona.108
It is obviously a convenient arrangement when P-2 contributions and favors to a right-wing U.S. President can be followed by the release of $10 million in unvouchered CIA funds for political use by P-2. No doubt their knowledge of such arrangements must have fueled the zeal of Carter and Turner to cut back on the CIA's clandestine services. Conversely, the CIA's cutback on clandestine operations and subventions spelled both political and financial disaster for parallel operations, such as Wilson's and Sindona's, which had fattened on CIA handouts. The end of U.S. intelligence subsidies to Wilson's company Consultants International is clearly responsible for Wilson's move into the illegal Libyan deals for which he was eventually jailed. The same drying up of the CIA cash flow to right-wing assets appears to have contributed to the failure of Calvi's Banco Ambrosiano; and of another intelligence-related bank whose operations interlocked heavily with Wilson's: the drug-linked Nugan Hand Bank of Australia.109 Thus CIA reforms had the effect of building a powerful coalition of both Americans (ousted CIA clandestine operators, the Taiwan-Somoza lobby, the A.S.C) and foreigners (W.A.C.L, P-2), determined to restore the clandestine operations which had been cut back by four different directors of central intelligence (Helms, Schlesinger, Colby, and Turner).110
Whatever the details, it appears that the P-2 Republican connection remained as healthy in 1980 as it had been in 1972. Licio Gelli, the head of P-2, was invited by Republican bigwig Phil Guarino to Reagan's inaugural ball.111
P-2, the Calvi Scam, and Nicaragua
By 1980 the fate of Calvi's Banco Ambrosiano (and hence indirectly of
P-2) depended largely on an anti-Communist turnaround in Central
America. In 1977 Calvi had developed close relations with the increasingly
isolated Nicaraguan dictator Anastasio Somoza, and opened a subsidiary
(the Ambrosiano Group Banco Comercial) in Managua. Through another
of his Ambrosiano-controlled companies, Central American Service, Calvi
began prospecting for minerals and oil. As the Nicaraguan situation
deteriorated in 1978-79, Calvi's Managua subsidiary received a steady
flow of funds from Calvi's Bahamas subsidiary, which had come under the
scrutiny of Italian government investigators.112 By 1979,
Calvi (probably with Gelli's intercession) was on good terms not only
with the then dictator Anastasio Somoza, but also with the ever more
menacing Sandinista opposition. To the end of his life [in 1982] he retained
a Nicaraguan diplomatic passport, and in 1979 Calvi attempted to lobby
the Rome government for an increase in coffee imports from
Nicaragua...Of the foreign banks in Managua at the time of the left-wing
takeover in... 1979, Ambrosiano's subsidiary was the only one not to be
nationalized by the new revolutionary regime.113 Calvi had obviously established a bridge to the Sandinista junta's bankers, Alfredo Cesar and Arturo Cruz, and their allies such as Alfonso Robelo. By 1982 both Cruz and Robelo were working with the contras.114
In every account of the P-2/Banco Ambrosiano billion-dollar scam, the role of Somoza's Nicaragua is prominent. According to one source, it was Gelli who "smoothed the way" for Calvi's use of Somoza's offer of bank secrecy, "after several million dollars had been dropped into the dictator's pocket."115 In this period the Italian construction magnate Mario Genghini (whose name was also on Gelli's P2 lists) "was one of the biggest foreign investors in Nicaragua."116 In 1978, to avoid an investigation by the Bank of Italy, Calvi "moved the axis of [his international] fraud to Nicaragua"; one year later, as Somoza's position worsened, the fraud was moved to Peru.117
In 1981 Bishop Paul Marcinkus of the Vatican Bank "held a number of secret meetings with the convicted Calvi, which resulted in the Vatican Bank officially admitting an increase in its outstanding debts of nearly $1 billion. This was the sum that was owed to the Calvi banks in Peru and Nicaragua as a result of their having loaned, on Calvi's instructions,hundreds of millions of dollars" to companies allegedly under Marcinkus's control.118 Just one of these companies, Bellatrix, received $184 million for P-2's political purposes, which included Gelli's purchase of Exocet missiles for Argentina during the Falkland Islands War.119
P-2's political purposes also clearly involved the election of Ronald Reagan in 1980:
On April 8, 1980, Gelli wrote from Italy to Phillip Guarino... "If you think it might be useful for something favorable to your presidential candidate to be published in Italy, send me some material and I'll get it published in one of the papers here."...The favorable comments about Ronald Reagan, carefully placed by Licio Gelli, duly appeared in Italy. In January 1981, Licio Gelli was an honored guest at the presidential inauguration. Guarino later ruefully observed, "He had a better seat than I did."120
Vernon Walters
In 1981, the period of its Argentine grand design for Central America,
the Reagan administration appears in turn to have been exploiting P-2
pathways. One of its first envoys to Argentina and Guatemala for the
grand design was General Vernon Walters, a major figure in the Brazilian
military coup of 1964, and reportedly a prime architect in the blending of
the various contra forces into a united FDN under Enrique Bermudez in
1981.121 "In May 1981 General Vernon Walters...visited Guatemala as a
'goodwill ambassador' of the Reagan Administration. At the same time,
though, he was representing BRISA [Basic Resources International SA],
which was seeking permission to export more oil. The Guatemalan
military granted the request."122 The fate of Calvi and his allies, by then ominous, was tied up with the fortunes of B.R.I.S.A, whose chairman, as previously mentioned, was Sir James Goldsmith. In 1977 the Guatemalan government (with Mario Sandoval Alarcon as Vice-President) had awarded an oil concession to B.R.I.S.A, one of whose board members was Calvi's representative Antonio Tonello. In March 1981, as the Italian investigation of Sindona led to Gelli's files and Calvi's name, the Calvi case was nearing its denouement. On May 20, 1981, exactly one week after Walters' visit to Guatemala for Reagan and B.R.I.S.A, both Calvi and Tonello were arrested (and soon convicted).
The CAL-Reagan-Helms Triangle
The president in question was not Juan Peron, who had died in June 1974, but his widow, Isabelita, who was deposed in March 1976. This event followed from the more significant ouster in July 1975 of her mentor Jose Lopez Rega, the original fascist architect of the P-2/Italian terrorist presence in Argentina. The Argentinian army was responsible for both ousters, each of which followed a visit by Helms or his aides.
The presence on the 1975 Helms delegation of two other associates (Victor Fediay and J. Evetts Haley), and the subsequent involvement of Daniel Graham, may help explain why the relatively inexperienced Senator from North Carolina (he had been elected in 1972) would involve himself in an Argentinian military takeover. In 1975 Fediay (a Russian emigre and prewar Polish fascist) and Haley (a Texas rancher) had just helped with Richard Allen to broker a request (which was eventually turned down) for U.S. backing behind a Eurofascist secessionist coup in the Azores (sponsored by the so-called Aginter-Presse intelligence service, with which delle Chiaie was affiliated).124 One can imagine that the message to the Argentine military was similar: the U.S. could support a military takeover, perhaps even death squads and terrorists like delle Chiaie, but only if the Lopez Rega connection to the newly forming Fascist International in 1975 was eliminated.
This U.S.-Argentine connection in 1975-76 (Helms, Molina, Hamrick, Richard Stone, and Daniel Graham) would become the hard core Reagan-Sandoval-contra connection after 1980.125 We have seen how Graham and Singlaub assured Guatemalans in 1979 that "Mr. Reagan recognizes that a good deal of dirty work needs to be done."126
It was Helms who (after his aide John Carbaugh met d'Aubuisson at the September 1980 CAL Conference) received Sandoval's protege d'Aubuisson on an illegal visit in December 1980.127 (Since that time Carbaugh has worked closely with Mario Sandoval Alarcon's nephew, Carlos Midence Pivaral, to fashion a more marketable and "Republican" image for d'Aubuisson's new party, A.R.E.N.A.128) Stone, a lobbyist for Guatemala in 1980, became Reagan's special ambassador to Central America.129 In 1981-82, Hamrick, while on Helms' staff, would lobby, together with the head of the Costa Rica W.A.C.L chapter, for a friendly base for the contras in that country.130
But the most significant member of the Helms Argentine connection may have been Ramon Molina, a Cuban-American Bay of Pigs veteran who in 1976 was the apparent point of contact between his two employers, Nicaraguan dictator Somoza and Senator Helms.131 In 1975-76 Molina appears to have been Somoza's connection to renegade ex-CIA Cubans, like Orlando Bosch, whose C.O.R.U assassination activities extended to Argentina by August 1976.132 It would appear that, just as in the 1972 election Manuel Artime (another ex-CIA Cuban accused of drug trafficking) emerged as the connection between Nixon, Somoza, and the Watergate burglars, so in the 1980 election Ramon Molina emerged as the connection between Reagan and Somoza.133
The Helms camp has been very much of a right-wing embarrassment to the Reagan administration since it took office: in 1984 Helms put the life of Reagan's Ambassador to El Salvador at risk by leaking secret CIA data. In 1976 and in 1980, however, candidate Reagan was very much dependent on winning the support of Helms and his international W.A.C.L network. In 1976 the Reagan campaign appointed David Keene, an old Liebman sidekick and W.A.C.L participant, to be chief delegate hunter in the southern states. In 1980 a campaign aide, Belden Bell, traveled to Latin America and met both Deaver's Amigos and Ramon Molina.134 What may have interested the Reagan campaign in Molina was his capacity as a representative of Somoza's personal fortune, in whose employ he used his CIA training as a strong-arm man and enforcer (he allegedly once broke the jaw of a South Carolina concrete businessman). Somoza, until his assassination in September 1980, was said to be funding terrorist activities through CAL as a way of building an international neofascist coalition for his return.135
Reagan, the Contras, and Narcotics
Such then was the state of W.A.C.L when Singlaub began his
missionary activities to it on behalf of Reagan in 1979-80. It might be said
in defense of their policies that W.A.C.L represented an old U.S. intelligence
project out of control; and that Singlaub has worked to bring it back under
control. Alternatively, the W.A.C.L collaboration might be seen as a kind of
"constructive engagement" with neofascism, offering right-wing governments
equipment and support services, in exchange for their renunciation
of death squad politics that would never play well in Peoria. It is clear that the Reagan administration has since backed away from many of its old C.A.L proteges, usually after revelations linking them to the drug traffic. It has relegated d'Aubuisson to the background, after a plane belonging to one of his financial supporters was detained in Texas with a cargo of $5.9 million in cash. It has helped extradite Pagliai (the younger of the two Italian terrorists) from Bolivia, after Pagliai was detected by the DEA at a high-level drug-traffic meeting in 1981.136
Eventually the Reagan administration helped ease both the Bolivian and the Argentine dictatorships out of power. After the failure in 1982 of a Guatemalan coup plot by Sandoval's associate Lionel Sisniega Otero (plotting with WerBell, the OSS colleague of Singlaub and Cline), the U.S. eventually accepted a civilian government headed by a Christian Democrat, of the party targeted by Sandoval and Sisniega for extermination.
In marked contrast, the Reagan commitment to the contras has been unswerving. Modifications to its policy have been limited to a search for better personnel, as Congressional opposition mounted to the contra record of raping peasants and torturing social workers to death. In September 1982 the CIA reorganized the contra directorate, and sent a new station chief to Honduras, with the task "of getting the Argentines out and getting the war back under control."137 In late 1983 the CIA began its own covert operations against Nicaragua, cutting out the contras, and reorganizing their F.D.N directorate yet again.138
These cosmetic changes of personnel do not appear to have reached to the level of eliminating the old CAL presence in the contras. Enrique Bermudez, the link between Sandoval's Guardia proteges and Washington, has remained through each successive FDN shake-up. As for the international drug traffickers, their interest in maintaining the contra status quo in Honduras was revealed when the FBI broke up a drug-financed plot in Miami to assassinate the elected Honduran president and restore Alvarez to power.140
Since December 1985 it has become clear that the CIA contra operation has become as intermingled with drug trafficking as the old CIA Cuban exile operations which had had to be closed down in Miami (see Chapter III). In December 1985,
...the Associated Press cited a CIA report alleging that a "top commander" of the Costa Rica-based guerrillas had "used cocaine profits to buy a $250,000 arms shipment and a helicopter."...Two Nicaraguan smugglers convicted in the largest cocaine seizure in West Coast history—430 pounds— admitted that they passed drug profits on to the contras...A leading Bay Area fund-raiser for the Honduras-based Nicaraguan Democratic Force, the largest contra group, was identified in 1984 by the Drug Enforcement Administration as "the apparent head of a criminal organization responsible for smuggling kilogram quantities of cocaine into the United States."141
The possibility that the contra operation serves as a cover for the Latin American drug connection does not seem to have occurred to the Reagan administration. On the contrary, its pressures to resume Congressional aid to the contras this year were not deterred by the revelation that the FBI was "examining assertions that cocaine was smuggled [into the United States] to help finance the rebels' war effort."142 Since then former Ambassador Robert White has charged that the Administration has attempted to kill this FBI inquiry. The stage has been set for a potentially explosive Senate investigation.
Watergate, Contragate, and
Foreign Campaign Contributions
Why would the Reagan administration, whose ideology is supposed
to be one of patriotism mellowed by pragmatism, have such a huge
investment in a cause that is so controversial here as well as in Latin
America? The Reagan response is to point to the alleged human rights
violations by their opponents, and to the Caribbean basin's proximity and
strategic importance. But it has been said in response to both arguments that
the contras, by their excesses and sheer incompetence, are weakening rather
than strengthening support for the U.S. in the area. A different question is whether the funds from Guatemala, P-2, Somoza, and other W.A.C.L sources, helped generate the private "verbal agreements" that Sandoval Alarcon referred to. The recycling of profits and AID funds from foreign countries back into American elections is perhaps one of the largest and least discussed scandals of the last three decades. W.A.C.L countries in particular, whose survival and affluence so often depend on U.S. support, have repeatedly been at the center of such rumors.
This would seem to be an appropriate topic for any Senate investigation into any illegal contra activities and cover-ups. But Congress in the past has proven most reluctant to pursue the question of illegal foreign funding in electoral campaigns. Renata Adler has described how the Congressional inquiry into Watergate faded at the point when traces were uncovered of large funds pumped into the Nixon campaign from the Far East.143 Nor did Republicans pursue similar allegations that dogged the campaign of even that cleanest of candidates, Senator George McGovern. Silence on such matters serves the interests of both parties.
Some of the points made by Renata Adler, a member of the staff investigating Nixon for the House impeachment inquiry, bear closely on the Reagan-WACL connection. She referred to theories "that Nixon was driven from office by a conspiracy within government itself—more specifically, within the CIA." And she drew attention to the inability of the CIA "to give any satisfactory account" of its involvement in the Southeast Asian narcotics traffic (where its airline Air America collaborated with members of Taiwan's WACL Chapter in supplying the opium growers of the Golden Triangle).144
Adler did not refer specifically to the very efficient sabotaging of the Nixon White House by Howard Hunt, nor to the fact that Hunt's White House services went into their disastrous high gear after the June 1971 departure of Kissinger for Peking.145 But she specifically named Anna Chan Chennault, perhaps Taiwan's top lobbyist in Washington, as someone who had raised campaign funds for Nixon from the Philippines, Hong Kong, Japan, and South Korea.146 Citing evidence too complex to review here, she concluded that "the South Vietnamese administration, not wanting peace to be at hand just yet, used some of the enormous amounts of money we were pouring in there to bribe our Administration to stay in."147
The bribes were in the form of illicit foreign campaign contributions— possibly in 1968, and more clearly in 1972. Though she refers to him only as a Nixon "White House official," Adler refers to two distinct sub-plots where in each case a principal suspect was Richard Allen, the man who in 1980 became Reagan's principal foreign policy adviser.148 In the 1968 case, Mrs. Chennault's activities had aroused the suspicions of the Washington intelligence community, and a plethora of agencies seemed to be watching her closely. According to published reports, the FBI tapped her telephone and put her under physical surveillance; the CIA tapped the phones at the South Vietnamese embassy and conducted a covert investigation of Richard Allen. Then, a few days before the election, the National Security Agency...intercepted a cable from the Vietnamese embassy to Saigon urging delay in South Vietnam's participation in the Paris peace talks until after the [U.S.] elections. Indeed, on November 1, her efforts seemed to have paid off when President Nguyen Van Thieu reneged on his promise to Lyndon Johnson... and announced he would not take part in the exploratory Paris talks.149
There are enough similarities between Allen's career and Deaver's (both men having gone on from the post of White House official to become the registered foreign lobbyist of Asian countries) to suggest that Adler's hypothesis for the origins of Watergate (bribery by illicit foreign campaign contributions, and the potential for blackmail thus created) might help explain the workings of the Contragate mystery as well. In 1980 as in 1968 the W.A.C.L coalition apparently decided to conspire against an American Democratic incumbent, the main difference being that in 1980 the role both of illicit foreign funds and of American intelligence veterans appears to have been more overt.
Congress should certainly investigate this possibility. But there is also a chance of a searching and objective inquiry in the special prosecutor's examination of the affairs of Mike Deaver. Deaver is already under scrutiny for his lobbying activities in South Korea. Some of these involve the U.S. Ambassador in Seoul, Richard Walker, a W.A.C.L participant since as far back as 1970.
Deaver's connections with South Korea go back at least to February 1981, when he "ushered President Chun Doo Hwan of South Korea into the Oval Office to meet Reagan."150 Chun was in fact the first of the WACL dictators, shunned by Carter, to be received into the Oval Office. In a sense his visit, like Sandoval's, was a trial balloon for Reagan's new policy of tilting towards W.A.C.L and away from Carter's support of "human rights."151
Chun's visit to Reagan is said to have followed a period of intense involvement in Latin American W.A.C.L intrigue by C.A.U.S.A, the political arm of the South Korean Unification (Moonie) Church. (The links between Moon's church and the South Korean Central Intelligence Agency are so overt that a decade ago they provoked a U.S. Senate investigation.152) CAUSA officials are reported to have offered $4 million for the Garcia Meza Bolivian coup of July 17, 1980; and one of them is said to have had worked directly with Klaus Barbie in organizing the coup.153
When Congress ordered a cutoff of military aid to the contras in 1984, C.A.U.S.A worked with Refugee Relief International, a creation of Singlaub and of W.A.C.L, to ferry non-military supplies to the same contra camps. An informed observer said that "the 'big three' countries that were expected to aid the contras [militarily] were Israel, South Korea, and Taiwan."154 Robert Owen, said to have served with Singlaub as a cut-out contact between the National Security Council and the contras, is a former registered lobbyist for South Korea.155
It is unlikely that Deaver's lobbying activities were more than a small part of the apparatus securing the Reagan-WACL connection. The full story, if it could be told, would probably lead to grey intelligence-political alliances that were already in place when Deaver was a young boy. Undoubtedly Cline and Singlaub, not to mention Reagan himself, would know more about such matters.
Singlaub, at least, probably faces a Congressional investigation in the months ahead. But Contragate is not a narrowly bureaucratic or administrative scandal. Deaver's post-1984 lobbying activities have already suggested to federal investigators that he may have violated U.S. statutes. Thus he too can be made to talk about how these connections were forged. Under oath.
To be continued...next
V. Israel and the Contras
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