Part 8:The CIA as Organized Crime...Beyond Dirty Wars,CIA/DEA Connection to Terror in L.America...Project Gunrunner

The CIA as Organized Crime: How Illegal Operations Corrupt 
America and the World
By Douglas Valentine
| Chapter 13 | 

BEYOND DIRTY WARS: 

THE CIA/DEA CONNECTION 

AND MODERN DAY TERROR 

IN LATIN AMERICA 

GUILLERMO JIMENEZ: On today’s show I am joined by Mr. Douglas Valentine, an expert on the CIA and the DEA and their adventures in terror and narcotics trafficking. Doug, thank you for being on the show. 

VALENTINE: You’re very welcome. 

JIMENEZ: I’m trying to piece together how modern-day narco-terrorists, the notorious cartels that we hear and read so much about, may connect with the Phoenix program, and how by studying and understanding this history we can better understand what is happening today. Perhaps we could begin with a summary on what we need to know about Phoenix before we can explore the program’s expansion, and how it’s been implemented in other parts of the world. 

VALENTINE: The Vietnam War was a unique experience for the American military and the CIA. They were fighting the North Vietnam Army (NVA) in what they called “a main force war.” The US was quite prepared to fight that main force war because it had the biggest military in the world. What America wasn’t prepared to fight was a guerrilla war, a political war. Ho Chi Minh had said he’d rather have two political cadres in every village than a battalion in the field. And that’s what happened. The Communists organized the people of South Vietnam to fight the oligarchy that was working for the CIA and following American policies.

The guerrilla war in the villages baffled the Americans, so the CIA started experimenting with a lot of political and psychological ways of fighting the insurgency in the villages. They called it “the other war.” Pacification. The job fell to the CIA because it meant killing civilians not soldiers. The military isn’t supposed to go into a village and kill everybody. They did it anyway, plenty of times, but it turned the people against the US and its puppets in the South Vietnamese government. 

So the job of killing civilians was given to the CIA, which isn’t hampered by any rules of engagement related to the laws of any country. There is nothing to stop the CIA’s hired killers from going into the villages and snuffing and snatching Uncle Ho’s cadres. The cadres are teachers, laborers, mailmen, farmers; but they’re not soldiers. They provide support for the NVA and the guerrillas. They’re the backbone of the insurgency. 

The CIA realizes it has to “eliminate” these people to win the war. It works through its assets in a country’s judicial system to create administrative detention laws that allow Americans and their subsidiary counterterrorism teams to snatch the cadres from their homes at midnight, without charging these targeted cadres with having committed criminal offenses. It builds secret interrogation centers where the cadres and their friends and family members can be tortured and turned into double agents. It creates a system that terrorizes everyone, in order to create millions of informers. Once it finds out who the cadres are, the CIA sends out its death squads. The CIA calls them counterterrorism teams like the ones it uses today in Afghanistan and Iraq and other countries around the world. They creep into the cadres’ homes in the middle of the night, drag them away to the interrogation centers, or slit their throats and kill their friends and their families for psychological reasons, and run away before anybody knows what happened. 

In 1967 the CIA brings together all these methods of fighting the guerilla war in the Phoenix program. Phoenix combines all these things plus a lot I haven’t mentioned. It pulls together people from the army, navy, air force and Special Forces. It includes the Vietnamese secret services. It coordinates everybody that’s involved in the war and brings every resource to bear on the political people in the villages, in an effort to wipe them off the face of the earth. That’s what the Phoenix program is. The total number of people killed was between 25,000 and 40,000. 

JIMENEZ: Wow. Hearing you speak about this tactic of going into someone’s home at night, which is happening in places like Iraq and Yemen, and taking out an entire family, associates and friends, and doing so in a public and violent way as a form of psychological warfare. I see a lot of parallels between what you just described and what is happening now in Northern Mexico with these drug cartels. They employ the same or similar tactics and it’s not a coincidence as we look at the history of the Phoenix program and how it transitioned into Central America. Many of the founding members of the more violent and notorious drug cartels in Mexico today, namely Los Zetas, are directly linked to the death squads that were trained during this transition of the Phoenix program to Central America. 

Why did Phoenix become the go-to strategy in El Salvador, Guatemala, and later Iraq? 

VALENTINE: Phoenix was a program in Vietnam, a methodology, but it is also a concept based in a speculative philosophy of history in which self-made America is exceptional, and its will to power is determinant. Phoenix the program goes through organizational changes. Over the eight years it existed, pieces were put into it and taken out. The pieces were called different things; different labels were put on the jar up on the shelf. But it is also a method of thinking about and controlling perceptions of, and events in, the ever present spectacular moment, and as such is transferable and adaptable to any situation. 

The United States never met a war it didn’t like, especially now that it has the biggest military and the best intelligence service the world has ever known. They’re the biggest and best because they’re always fighting to expand the empire. They’re always finding a reason to start a war, so they can send the next generation of young men into battle, to learn how to kill people in the most brutal fashion. The US has an imperative to be as super-aggressive as it can be, so it doesn’t lose its edge. If its predatory impulse to dominate was stilted in Vietnam, that doesn’t mean the soldiers and spies aren’t going to pop up some place else. They’re always going to pop up someplace else. They always do. 

As Vietnam was winding down, the CIA was beset by Congressional investigations that revealed some of the criminal activities it was involved in, like MKULTRA. The military took a big hit with the release of the Pentagon Papers in 1971. The military had lied to the American public about why it was fighting the Vietnam War. During the Watergate period the CIA had a reduction of forces in Southeast Asia. But the impulse to dominate was still there and Phoenix was the perfect template to apply elsewhere, so the CIA and military could release their repressed aggressive forces. Phoenix is both the methodological and programmatic way these repressed impulses to dominate gradually emerge.

By 1973 the people who had been running Phoenix were overthrowing the elected socialist government in Chile. One of them was Ted Shackley, who’d been station chief in Saigon. By 1973, Shackley was head of the CIA’s Western Hemisphere Division and helped engineer the coup in Chile. From there the CIA and military fanned out through Latin America. If you review the history, you’ll see that there’s an infusion of American covert forces into Latin America as the war in Vietnam winds down. 

Nowhere was this more evident than in El Salvador, where Lieutenant Colonel Stan Fulcher served from 1974 until 1977 as an intelligence advisor with the US Military Advisory Group. Fulcher had run Phoenix operations in Binh Dinh Province in South Vietnam in 1972. Two years later in El Salvador, as he told me when I interviewed him, he saw the same “old boys” who’d run the war in South Vietnam. The big difference in El Salvador was that the CIA effected US policies through proxies from allied countries as a result of the reduction in the CIA’s paramilitary forces. 

Fulcher watched while Israeli advisors taught El Salvador’s major landowners how to organize criminals into vigilante death squads. The death squads used intelligence from El Salvador’s military and security forces to target and murder labor leaders and other opponents of the oligarchy. But they were deniable. 

Fulcher watched while Taiwanese military officers taught Kuomintang political warfare techniques at El Salvador’s Command and General Staff College: Phoenix-related subjects like population control through psychological warfare, the development and control of agent provocateurs, the development of political cadres within the officer corps, and the placement of military officers in the civilian security forces. He saw political prisoners put in insane asylums he described as being “like Hogarth’s paintings.” 

Fulcher saw Americans smuggle weapons and money to the death squads. He was outraged by what he saw and organized at his own home a study group of young military officers who supported land reform, nationalization of the banks, and civilian control of the military. In 1979 these reformist officers staged a successful but short-lived coup. As a result of that coup the Salvadoran National Security Agency (ANSESAL), which the CIA had formed in 1962, was disbanded and reorganized as the National Intelligence Agency (ANI). 

This reorganization didn’t put an end to the death squads. Instead, the landowners and the fascist military officers moved to Miami and Guatemala, where they formed a political front called Arena, to which the CIA channeled funds for the purpose of eliminating the reformers. Major Roberto d’Aubuisson was chosen to head Arena. D’Aubuisson was a former member of ANSESAL, and he transferred its files to general staff headquarters where they were used to compile blacklists. Operating out of Guatemala, under CIA supervision, D’Aubuisson’s death squads murdered Archbishop Oscar Romero and El Salvador’s attorney general in early 1980. In December of that year, six members of El Salvador’s executive council were kidnapped, tortured, and killed by a death squad. The death squads went on a rampage which included the murders in January 1981 of the head of the land distribution program, along with his American advisors, Michael Hammer and Mark Pearlman. 

At this time, according to Salvadoran Army officer Ricardo Castro, death squad supervision passed to Department 5, the civil affairs branch of the Salvadoran general staff. “Department 5 suddenly started coordinating everything,” said Castro, a West Point graduate with a master’s degree in engineering. 1 

Formed in the mid-1970s by the CIA, Department 5 became “the political intelligence apparatus within the general staff.” Although it was designed as an investigative, not an operating, agency, Department 5 had “a large paramilitary force of people dressed in civilian clothes,” and because it targeted civilians, “They can knock someone off all by themselves, or capture them,” Castro said. 

When military as opposed to political targets were involved, Department 2, the intelligence branch of the general staff, would send information from its informant nets to Department 3 (operations), which then dispatched its own death squad. Whether the people to be killed were guerrillas or civilians, Castro explained, “The rich people – the leading citizens of the community – traditionally have a great deal of input. Whatever bothers them, if they’ve got someone who just came into their ranch or their farm and they consider them a bad influence, they just send a messenger to the commander.” 

So Latin America was, for economic reasons, the place the US aimed its aggression after Vietnam. The Phoenix people brought their techniques and ideas into South and Central America, the Caribbean and Mexico and began applying and perfecting the Phoenix model in various ways in these countries. All this erupts in 1980 when the Reagan regime comes to power. 

JIMENEZ: The Salvador Option, is that synonymous with the Phoenix program? Is it essentially the same thing under a different name? 

VALENTINE: Yes. in fact, the people who created and imposed the Salvador Option were Phoenix veterans. The “Pink Plan” approved by Vice President Bush for use in El Salvador in 1981 was developed by CIA officers Donald Gregg, Rudy Enders and Felix Rodrigues in Vietnam, and exported to El Salvador and Iraq. 

I did interviews with Gregg and Enders in 1988. Gregg was Bush’s national security advisor at the time, and he called me from the White House one afternoon when, as he put it, he had nothing to do. He described the whole process in detail. The interview is in my book, The Phoenix Program. 2 

Like I said, you can change the label on the jar on the shelf. It’s still poison. 

JIMENEZ: The same poison, the same concept you mentioned earlier. To me this sounds like standard operating procedure in every theater of war that America is involved in today. It’s amazing. 

VALENTINE: I was just reading a book about Daniel Siqueiros, the muralist. There’s a passage where a peasant woman says that the foreman who’s beating the peasants does what the hacienda owner says, and the hacienda owner does what the North Americans say. Every working class person in South America understands that. That Americans don’t understand it is just a testament to the media here. 

There’s a lot of anti-Americanism in South America and Mexico. The poor people understand that the hand of the Americans – the CIA, FBI, State Department – has always been corrupting high officials in their countries. They do it a number of ways. One way is through drug trafficking. 

People think this is something that started in Central America during Iran/Contra, but it started in China when the US backed Chiang Kai-shek in the 1920s. The only way that Chiang Kai-shek could finance his government was through the opium trade. There were laws restricting the opium trade, but the US turned a blind eye to Chiang’s opium business because they didn’t want the Communists taking over China. The United States has been engaged in an unstated policy since the 1920s of supporting its political allies by allowing the leadership to make fortunes dealing drugs. 

The CIA allowed General Vang Pao, the leader of the CIA’s “secret army” of Hmong tribesmen in Laos, to make a fortune through the opium trade in the 1960s and 1970s. FBN Agent Bowman Taylor told me about it. Taylor had been an agent in Dallas since 1951, and in 1963 he was assigned to run the Bureau’s newly created office in Bangkok. “There was no preparation,” Taylor noted. “I just packed bags and went.” 

Finding friends in Thailand wasn’t easy for Taylor, who had no diplomatic training or skills. The war on drugs wasn’t a sexy thing yet, and no one at the US Embassy wanted to jeopardize his career by helping an FBN agent whose job was to make drug cases on the most important people in the Kingdom of Opium. Shunned by his American colleagues, Taylor forged relations with a colonel in the Thai army. Three months after his arrival, he received additional help when FBN Agent Charles Casey arrived. Casey teamed up with a Chinese-American FBN undercover agent from San Francisco to make a case against Kuomintang drug smugglers in the Shan states of Burma. For CIA-related reasons of so called national security, which everyone is acquainted with by now, the case collapsed after several months. 

At Taylor’s direction, Casey next made a case against two Thai lieutenants serving with the CIA-advised Border Police. But they were the CIA’s “best” lieutenants, according to Taylor, so after their arrest the CIA simply sent them to manage a drug network in Laos. In another instance, a CIA pilot left a suitcase full of opium at the Air America ticket counter in Bangkok. Taylor and a Thai police officer tailed the pilot to an American airbase outside Tokyo; but the pilot was whisked away to the Philippines and put under protective custody by CIA security officers. 

Joining Taylor and Casey in 1965 was agent Al Habib. “I went on a ninety day TDY,” Habib recalled in our interview, “and after the initial shock, I wound up staying two years.” 3 

The initial shock was the CIA. “Taylor had gotten in trouble in Laos,” Habib recalled, “and he sent me there to patch things up. I reported to the Embassy in Vientiane where I was met by a CIA officer. He asked me what I wanted, and I told him I was there to make narcotics cases. That made him nervous so he called the Marine guard. He said, ‘Stay here until we come to get you.’ And I sat there under guard until they took me to see Ambassador William Sullivan.” 

Habib laughed. “I’m sitting in Sullivan’s office surrounded by a gang of menacing CIA officers. Sullivan introduces himself and asks if I would please explain what I’m doing in Laos. I say I’m there to work undercover with the police, to locate morphine labs. To which he replies, ‘Are you serious?’ 

“At that point a CIA officer says to me, ‘You! Don’t do nothing!’ Meanwhile Sullivan goes to his office and composes a yard-long telegram to Secretary (of State Dean) Rusk saying, in effect, ‘Don’t they know that Laos is off limits?’ 

“They tell me how Taylor set up an undercover buy from a guy. He got a flash roll together and went to the meet covered by the Vientiane police. When the guy steps out of the car and opens the trunk, the police see it’s the King of the Meos. 4 The police run away and Taylor busts General Vang Pao, alone.” 

“It’s true,” Taylor laughed when I asked him about it. “I made a case on Vang Pao and was thrown out of the country as a result. What you weren’t told was that the Laotian Prime Minister gave Vang Pao back his Mercedes Benz and morphine base, and the CIA sent him to Miami for six months to cool his heels. I wrote a report to (FBN Commissioner Henry) Giordano, but when he confronted the CIA, they said the incident never happened. 

“The station chiefs ran things in Southeast Asia,” Taylor stressed, adding that the First Secretary at the Vietnamese Embassy in Bangkok had a non-stop drug smuggling airline to Saigon. “I tried to catch him, but there was no assistance. In fact the CIA actively supported the Border Police, who were involved in trafficking.” He shrugged. “The CIA would do anything to achieve its goals.” 

According to several FBN agents I interviewed, the CIA actually flew opium to its warlords in South Vietnam. In one documented case that supports this assertion, Major Stanley C. Hobbs, a member of MACV Advisory Team 95, was caught on 30 August 1964 smuggling 57 pounds of opium from Bangkok to a clique of South Vietnamese military officers. Hobbs flew into Saigon on the CIA’s proprietary airline, Air America. His court martial was conducted in secret at Ryukyu Island for “security” reasons. The witnesses were all US Army and South Vietnamese counterintelligence officers. The records of the trial have been lost and though convicted Hobbs was fined a mere $3,000 and suspended from promotion for five years. As a protected drug courier, he served no time. 

FBN Commissioner Giordano wrote a letter to the Assistant Secretary of Defense complaining about the light sentence Hobbs received. After his request for a record of the trial was denied, Giordano wrote to Senator Thomas J. Dodd asking for help obtaining information. But Dodd was similarly stonewalled; which only goes to show that in the 1960s, the CIA was powerful enough to subvert federal drug law enforcement even at the legislative level. It still is today. 

“A kid in the slums who steals a loaf of bread will draw stiffer punishment than that,” columnist Carl Rowan quoted Missouri Senator Stuart Symington as saying about the Hobbs case. 5 

With the support and blessings of the CIA, several top generals in South Vietnam had franchises in the drug trade. According to Al McCoy, the three men at the head of the syndicate were Air Force General Nguyen Cao Ky, President Thieu, and Prime Minister Tran Thien Khiem, who worked hand in hand with William Colby running the Phoenix program. 6 

According to Nguyen Ngoc Huy, a Vietnamese historian and former professor at Harvard, General Dan Vang Quang, Admiral Chung Tan Cang, Prime Minister Khiem, Air Force chief Ky, and Thieu’s military chief of staff, Cao Van Vien, ran the rackets in Vietnam through their wives. 7 

None of this officially sanctioned corruption was made public until the US decided to get out of Vietnam. Then, when it served US interests (as with Manuel Noriega in Panama in 1990), it was “Oh, my god! We’ve got drug traffickers on our hands. We can’t deal with these people anymore.” 

But the fact is that the CIA organized the drug trade out in the Far East and used it to reward the generals and politicians who pushed American policy even though it was against the interests of their people. The CIA buys American politicians in the same way. 

Corrupting the leadership of a country in order to keep it in your pocket is integral to maintaining an empire. It is a well-established colonial policy. The two main facets of Phoenix – controlling the “upper tier” people in a foreign government by corrupting them, and terrorizing the lower tier into submission – come together in the mid-70s in Central America and explode with Iran-Contra in the 1980s. 

In The Great Heroin Coup, author Henrik Kruger advanced the theory that, with the loss of Vietnam and its networks in Southeast Asia, the CIA shifted its drug headquarters to Mexico through drug trafficker Alberto Sicilia-Falcon, a Cuban exile who popped up in Mexico in 1973. Kruger theorized that the CIA put Sicilia-Falcon in business using the old French Connection network of corrupt officials in Mexico. The Mafia and its connections in the French Corsican underworld had operated there for decades with top Mexican politicians, generals and security forces, just like in Vietnam. I write extensively about that in my books. Anyway, Sicilia-Falcon claimed that he was working for the CIA and with the same corrupt officials, and that his real job was to provide weapons to anti-Communist forces in Central America. 

In 1977, Senator Sam Nunn held a hearing to investigate arms smuggling from the US to drug lords like Sicilia-Falcon and other criminal organizations in Mexico. 8 It was quite a scandal; President Echeverria said in 1975, “External forces are trying to destabilize our country.” 9 

At the Nunn Hearings, the director of the Bureau of Alcohol Tobacco and Firearms (ATF) said that there was a tremendous mark-up for American manufactured weapons and that hundreds of people were smuggling automatic rifles into Mexico. The same thing happened again with the Fast and Furious scandal 40 years later. That case also ended up in front of Congress. In that case the ATF allowed guns to be smuggled into Mexico, ostensibly to locate big crime bosses, none of whom were ever arrested. The guns just ended up in the hands of criminals, like the gun that was used to kill a US Border Patrol agent. The true intent of the operation was never revealed. 

So the corruption, the drugs for arms trafficking, and the death squads aren’t divorced from each other. They are systematically related and, historically, dependent on one another. That’s Phoenix. 

JIMENEZ: To what extent is this being done strictly for political reasons – aligning themselves with a given cartel, for example, because they have the same goal of keeping the same group of people in a given country in or out of power. How much is based on profiting financially from the narcotics trade? Your thoughts on how this plays out in today’s illicit black markets. 

VALENTINE: The illicit drug trade produces some $300 billion a year in cash that exists off the books until it’s deposited in a bank. Everyone wants to have the US $100 bill, so the majority of the narco-dollars end up in banks that hold US dollars. A lot of that money buys arms that are used for political purposes, to overthrow governments, like in Syria. We’re often told that drug money helps support ISIS and other so-called terrorist groups. 

But it’s impossible for $300 billion, no matter what currency it’s in, to float around the world economy undetected. 

The great white fathers who control world finances know where it comes from and where it goes. The CIA has a new Digital Division that keeps track of all this. We’re talking about people who can arrange economic sanctions on Iran. It’s amazing to see what they can do, but it is impossible for me to explain how they do it. But that $300 billion has a lot to do with buying people’s loyalty. Controlling that $300 billion is a very high priority of the CIA. 

JIMENEZ: It’s clear that this is being managed by the powers that be. So how much of what we are seeing today in places like northern Mexico can be traced to the training of the death squads like the Kaibiles in Guatemala? A couple of the founding members of Los Zetas were Kaibiles, and others were trained in the School of the Americas. Officially they defected from the Mexican Special Forces and went into the narcotics trade for themselves. Is this a matter of blowback, of people trained in Phoenix tactics going bad? Or is it by design? Bill Conroy of Narco News has done a lot of investigative work into the drug cartels in Mexico, and he doesn’t even consider them cartels. He considers them factions of the Mexican government itself vying for control. 

VALENTINE: The US has had an unstated policy of smuggling guns to militant factions in Mexico’s Northern states that are continuously fighting against the central government. It’s one of ways of keeping the central government weak, so that Mexico can never develop into a strong economic or political adversary. The US effects the same secret policy in every nation south of Mexico, too. Hillary Clinton staged a coup in Honduras in 2009. 

Corruption is the best way of destabilizing a country. If a nation’s top officials are corrupt and don’t represent the people, then it’s not the people’s government. America has made sure this happens in Mexico. After World War Two, the CIA started to effect this policy. Several presidents of Mexico have been agents of the CIA, working not to advance policies that help average people, but to effect American policy. 

The CIA uses Phoenix techniques because these techniques are deniable, affordable and effective. Neither country can afford to have the US military bombing Mexican villages, so the oligarchs unite and do the job in this dirty underhanded way. Political factions in Mexico compete for power and money, and in pursuit of short-term profits, they become pawns in the CIA’s double game to destabilize Mexico by keeping it in a constant state of violence against itself. CIA officers in Mexico contribute to this by guiding and manipulating the arms for drugs trade. As you noted, the CIA has trained some of the Mexican Special Forces people in one of the cartels in the modern techniques of guerrilla warfare. Opposing cartels, whether wittingly or unwittingly, have likely been assisted by the CIA too, just to keep them at each other’s throats. It’s an underworld and there’s a lot going on that never gets publicly revealed. 

No one talks about it, but the CIA has an operations officer engaged in covert actions in every province and state in Mexico, including along the border. These CIA officers work with the local DEA agents, reporting to the fusion center, and the Counterterrorism and Counter Narcotics centers, in Mexico City. As in Fast and Furious, they monitor the guns for drugs networks so they can 1) blackmail and turn the political bosses into assets, and 2) keep the various cartels armed and fighting each other. They’re not interested in disarming Mexico. If Trump was elected and built a wall, the CIA would put trap doors in it. 

At the other end of the pipeline, as Gary Webb revealed, they monitor the delivery of drugs to disenfranchised minorities in America, whom the police pit against each other and use as commodities to pack the prisons, where they are then exploited as slave labor. Here the social engineering is based on institutional racism. Again, you’re not allowed to talk about it, but people see it. Very sophisticated methods of social engineering are behind this, and the Black Lives Matter people have a hard time articulating it. And even if they find the language, the media shuts them down, because you’re not allowed to talk about systematic repression. We’re a free country and that isn’t supposed to be possible. 

JIMENEZ: I agree completely with everything you just said. The idea is to corrupt foreign leaders and keep them in your pocket. There’s no better example than Mexico, and as you just alluded to, this is happening right here within our own borders. 

I want to read a short excerpt from your book to illustrate the point. You quote a Salvadoran army officer, Ricardo Castro. He was running a death squad in El Salvador and he described what they would do as a sort of daily routine. He said: “Normally you eliminate everyone. We usually go in with an informant who is part of the patrol and who has turned these people in. When you turn somebody in, part of your obligation is to show us where they are and identify them. We would go in and knock on people’s houses. They’d come out of their house and we’d always tell them we were the left and we’re here because you don’t want to cooperate with us or whatever. And then we’d eliminate them all, always with machetes.” 10 

This is exactly what we’re seeing today in Mexico; the cartels going into someone’s home, always with machetes. Again, not a coincidence. I was always a fan of rap and hip hop, groups like NWA and Public Enemy in the early to mid90s, and back then I was hearing through this music that the CIA was bringing in drugs to South Central Los Angeles to neutralize the black population. This became the stuff of urban legend. Then Gary Webb introduced us and the world to Freeway Ricky Ross, and that confirmed that indeed the CIA was facilitating the trafficking of crack cocaine to LA. This is done for political and financial reasons, but also as a means of social engineering through the drug trade. They can manufacture a crisis like the crack epidemic. 

VALENTINE: These things were planned 70 years ago. After World War Two, the big brains in industry and government prepared to rule the world. So this is not something that a magician pulled out of a hat. If you read the news, Americans are surprised every day by institutionalized racism and its attendant cycle of violence: the cops kill a black man, and then a black man kills some cops. We’ve been seeing it every day of our lives, but it’s always “news” that’s characterized as an aberration. But all these things, and the way they’re happening, were plotted decades ago. It was known back then that social engineering would be a more potent weapon then the atomic bomb. 

The CIA and the military hire the smartest anthropologists, sociologists and psychologists to figure out how to do this stuff. They have it down to a science called Human Factors. The way they have perfected things like Phoenix is beyond my knowledge. I don’t get to drive the latest Lamborghini. I have a Toyota. I was able to figure out some of these things 30 years ago, but the methods of preventing people from finding out have also improved and it’s harder than ever to know exactly what’s going on. 

That’s why you need a broad historical view. If you focus just on what’s happening now, you’re shocked every day by what you see. We need to develop a collective historical consciousness to understand the predicament and to be able to do something about it, to stop being manipulated by the press on a daily basis. The media have us trained like sex-texting teenagers to focus on things that have nothing to do with how our perceptions of events are being controlled. It is important for people to take a broader view and to try to put these things in perspective, not only to understand what is happening now, but to see where things are going in the future and to plot a way to deal with it. 

JIMENEZ: I couldn’t agree more with what you just said, Doug. I follow these stories as they’re breaking – like the news of the IRS targeting certain political groups and AP reporters, or the Edward Snowden NSA scandal – and I find myself falling into this trap. I have to check myself and say “Slow down here, let’s process this stuff again” with a broader more historical view, because these are not mistakes, the interventionism overseas, the bungles in Iraq and Afghanistan. This is by design and if you understand the historical context you can better understand what is happening. 

VALENTINE: The media needs its crise du jour. The news can’t last more than 24 hours without being refreshed; you need a new headline to get people’s attention so you can sell them something. Of course partisan political politics is poison and does nothing to help. The endless bickering creates the political gridlock within the government we see; meanwhile the bureaucracies grow more powerful. 

When I first started studying the DEA, I looked at its predecessor organization, the Bureau of Narcotics, which was created in 1930. It had a $3 million budget and 300 agents up until 1968. Now there are 600 agents in New York City alone, and the industry is so profitable that Congress gives the DEA around $20 billion annually. It has something called the Special Operations Division which was featured by Reuters a couple of days ago. 11 

The DEA’s Special Operations Division was created in 1994 to go after Pablo Escobar. It was a unit of about 12 people from the CIA, FBI and NSA organized on the Phoenix model. It used the latest surveillance technology to find Escobar. Over the last 20 years, the SOD has become a giant Phoenix-type center in the DEA with hundreds of agents. Through the NSA, they listen in on everyone’s conversations on the pretext that someone might have something to do with drug trafficking. This information is used for political and economic purposes by the bureaucrats who have run these operations for ten years. After they get out of the NSA or DEA or CIA, the bosses go to work for corporations that benefit from the knowledge they’ve acquired through these secret surveillance operations, because, despite what they say publicly, they are not throwing away the extraneous information. They’re using it for their personal benefit. It really pays nowadays to get involved in the domestic spy business as a DEA or CIA agent, because you’re set for life. It’s another way the CIA has corrupted our society. 

JIMENEZ: Absolutely. Regarding the correlation between the DEA, CIA and NSA, a story broke this week that the NSA is indeed feeding the DEA information that they’re collecting through these wiretapping programs to go after a small drug smuggler. That sort of information to someone like you, Doug, who has been following the history of this probably comes as no surprise at all. 

VALENTINE: In my book I tell how the NSA and DEA were doing that in 1970. It’s nothing new. What’s so dangerous is that the intelligence that the DEA gets from the CIA and the NSA is inadmissible in court. The CIA can promote a drug trafficker and use him as an agent simply by wiretapping him. If the CIA wiretaps a drug trafficker, the DEA can’t take him into court and the guy has a license to deal. 

At first the DEA was upset. But after ten years, the executives saw the writing on the wall and joined in the fun and games. The CIA corrupted the DEA the same way it corrupts foreign governments. The CIA is corrupting the NSA and the military in the same fashion. It corrupts our bureaucracies the same way it corrupts foreign governments. They say it’s for national security, but really it’s for the money. 

It’s gotten to the point where the Justice Department allows the DEA to lie. They can’t say they acquired the evidence from a CIA wiretap, which they did, so they say they acquired it from a confidential informant whose name, they say, they can’t reveal. They present that fiction as evidence in court. The judges, who’ve also been corrupted, won’t ask where it came from and the defendant goes to jail for 20 years. 

The moral to the story is that you don’t have to commit a crime anymore to go to prison. The law enforcement agencies can frame you and send you to prison for thinking bad thoughts. The powers that be coordinate all the bureaucracies on the Phoenix model, and they’ve all been corrupted because it’s the most effective way to ensure political control. If the bureaucrats subvert the Bill of Rights, they can own two houses and afford a trophy wife, send their kids to the best colleges. All our democratic institutions are so corrupt, are involved in so many illegal activities, that their main focus now is how to keep it quiet. 

JIMENEZ: Earlier you called the CIA a criminal conspiracy and I think that’s true. As you just mentioned, this is how the social order is kept through engineered instability, even within our own country. So much of what was once criminal has become standard operating procedure. 

Just to emphasize your points about information gathering and intelligence: Russell Tice, an NSA whistleblower, did an interview with Peter B. Collins and Sibel Edmonds of Boiling Frogs Post a few weeks back in which he said all content in all our conversations – telephone, electronic or otherwise – is indeed being collected and stored. 12 Not only that, but they’re targeting everyone in the country including politicians, Congressmen, even Barack Obama himself from the time he was a Senator. 

So to emphasize your point again, this is about corrupting and/ or compromising the leaders of a country to keep them under control. We can look at the FBI program COINTELPRO and how it targeted political groups like the Black Panthers. When they were thoroughly destabilized and discredited and splintered, members of the Black Panthers went on to form the Bloods, the Crips in South Central and elsewhere around the country. All of this is connected and explains how we ended up in the mess we’re in. Earlier I laughed when we were talking about this, but that’s just a defense mechanism to keep from screaming at this insanity. 

VALENTINE: Another defense mechanism is to read the right books, like Sam Greenlee’s book The Spook Who Sat by the Door. Forty years ago, black people were aware of everything that is happening now. Nothing has changed for them, except the bureaucracies that repress them are more powerful. As I’ve mentioned elsewhere, from the time the Bureau of Narcotics was created in 1930 until 1968, black agents were not allowed to become managers and supervise whites. Drug law enforcement has always been run by supremacists for the purpose of incarcerating blacks and Mexicans and anyone considered inferior. Nothing has changed. The presence of a black president hasn’t changed these bureaucracies. They still exist with that purpose in mind and despite appearances, that’s still the policy. 

JIMENEZ: I understand. In closing I’d like to read from the final chapter of The Phoenix Program. It’s the perfect way to end this conversation. I’d like folks to listen and consider what is happening not just in other parts of the world today, but within our own borders as well. 

You finish the book with this paragraph: “Where can Phoenix be found today? Wherever governments of the left or the right use military and security forces to enforce their ideologies under the aegis of anti-terrorism. Look for Phoenix wherever police checkpoints ring major cities, wherever paramilitary police units patrol in armored cars,” – this sounds like Boston just a few months ago – “and wherever military forces are conducting counterinsurgency operations. Look for Phoenix wherever emergency decrees are used to suspend due process; wherever dissidents are interned indefinitely; and wherever dissidents are rounded up and deported. Look for Phoenix wherever security forces use informants to identify dissidents; wherever security forces keep files and computerized black lists on dissidents; wherever security forces conduct secret investigations and surveillance on dissidents; and wherever security forces (or thugs in their hire) harass and murder dissidents, and wherever such activities go unreported by the press.” 

So again, just take that in and consider what is happening not just around the world but within this country, in this supposed land of the free and home of the brave. 

So, Doug, your final thoughts on this before we wrap this up. 

VALENTINE: I’d say it’s all about consciousness. It sounds like a fake term from the ‘60s. But if you become aware of the problem, you’ll see the way out.

| Chapter 14 | 

PROJECT GUNRUNNER 

KEN MCCARTHY: Welcome to Brasscheck TV. Our guest today is Doug Valentine. The story we’re going to talk about is Project Gunrunner and Operation Fast and Furious. Gunrunner started under the Bush administration and continued under Obama, and here’s the story. 

The Bureau of Alcohol, Tobacco and Firearms allowed and encouraged people with criminal backgrounds and known connections to Mexican cartels to buy guns from shops in Arizona and send them to Mexico. More than 1,000 military grade weapons were involved. Not only did the ATF allow it, the gun store owners in Arizona were concerned. They’d tell the ATF, “This guy keeps coming by and buying 20 or 30 AK-47s. Can you look into him? He seems to have a criminal background.” And the ATF would get back and say, “Let him buy them.” 

Some of the guns ended up in Mexico. Some were involved in crimes. In one case a US border agent was killed by one of these guns. That’s the official story. Now it’s come out that about a dozen drug cartels in Mexico were operating independently of one another for years. They were prosperous and stayed out of each other’s hair. Everybody was happy. Then in 2006 a war broke out and they started killing each other and a lot of Mexican civilians as well. About 50,000 people have been killed, often in a very gruesome manner. One of the cartels, Los Zetas, has an interesting pedigree. It is made up of people who were trained by the US Special Forces. They were trained to kill drug cartel leaders and then decided they’d rather run their own cartel. 

A member of the Sinaloa cartel, Vicente Zambada-Niebla, is currently in prison in the US “on charges of trafficking more than a billion dollars in cocaine and heroin.” 1 Zambada’s attorney is saying that since the late 1990s, the Sinaloa cartel has provided various US law enforcement agencies with information about the other cartels. They help the US eliminate their rivals and in exchange they’re allowed to import limitless quantities of drugs into the US. Chicago is one of their main drop-off points. 

So, Doug, has there ever been a case when the US government through its various law enforcement agencies gave a pass to drug dealers in exchange for something else? How often does it happen and how far back does this go? 

VALENTINE: An old FBN agent, Lenny Schrier, once told me: “The only way you can make cases is if your informant sells dope.” So, yes; not only has it happened, and not only does it still happen, but giving dealers a free pass to deal drugs is the foundation stone upon which federal drug law enforcement is based. Once you realize that, you have to look beyond, at the political and economic context that makes such an extra-legal practice possible. Allow me to explain. 

In the 1920s, the US threw its weight behind Chiang Kai-shek, whose Kuomintang Party was fighting the Communists and several other warlords for control of China. The US was competing with the other colonial nations for control of China, which had a cheap labor force and represented billions in profits for US corporations and investors. The problem was that the Kuomintang supported itself through the opium trade. It’s well documented in the diplomatic cables between the US government and its representatives in China. Historians Kinder and Walker said the Commissioner of the Bureau of Narcotics, Harry Anslinger, “clearly knew about the ties between Chiang and opium dealers.” 2 

Anslinger knew that Shanghai was “the prime producer and exporter to the illicit world drug markets,” through a syndicate controlled by Du Yue-sheng, a crime lord who facilitated Chiang’s bloody ascent to power in 1927. As early as 1932, Anslinger knew that Chiang’s finance minister was Du’s protector. He’d had evidence since 1929 that American t’ongs were receiving Kuomintang narcotics and distributing it to the Mafia. Middlemen worked with opium merchants, gangsters like Du, Japanese occupation forces in Manchuria, and Dr. Lansing Ling, “who supplied narcotics to Chinese officials traveling abroad.” In 1938 Chiang Kai-shek appointed Dr. Ling head of his Narcotic Control Department. 3 

In October 1934, the Treasury attaché in Shanghai “submitted reports implicating Chiang Kai-shek in the heroin trade to North America.” In 1935 the attaché reported that the Superintendent of Maritime Customs in Shanghai was “acting as agent for Chiang Kaishek in arranging for the preparation and shipment of the stuff to the United States.” 4 

These reports reached Anslinger’s desk, so he knew which KMT officials and trade missions were delivering dope to American t’ongs and which American Mafia drug rings were buying it. He knew the t’ongs were kicking back a percentage of the profits to finance Chiang’s regime. 

After Japanese forces seized Shanghai in August 1937, Anslinger was even less willing to deal honestly with the situation. By then Du was sitting on Shanghai’s Municipal Board with William J. Keswick, a director of the Jardine Matheson Shipping Company. 5 Through Keswick, Du found sanctuary in Hong Kong, where he was welcomed by a cabal of free-trading British colonialists whose shipping and banking companies earned huge revenues by allowing Du to push his drugs on the hapless Chinese. The revenues were truly immense: according to Colonel Joseph Stilwell, the US military attaché in China, in 1935 there were “eight million Chinese heroin and morphine addicts and another 72 million Chinese opium addicts.” 6 

Anslinger tried to minimize the problem by lying and saying that Americans were not affected. But the final decisions were made by his bosses in Washington, and from their national security perspective, the profits enabled the Kuomintang to purchase $31 million worth of fighter planes from arms dealer William Pawley to fight the Communists, and that trumped any moral dilemmas about trading with the Japanese or getting Americans addicted. 

It’s all documented. Check the sources I cite in my books. Plus, US Congressmen and Senators in the China Lobby were profiting from the guns for drugs business too. They got kickbacks in the form of campaign funds and in exchange, they looked away as long as Anslinger told them the dope stayed overseas. After 1949, the China Lobby manipulated public hearings and Anslinger cooked the books to make sure that the Peoples Republic was blamed for all narcotics coming out of the Far East. Everyone made money and after 1947 the operation was run out of Taiwan, with CIA assistance. 

The US government’s involvement in the illicit drug business was institutionalized during World War Two. While serving on General Joseph Stilwell’s staff in 1944, Foreign Service officer John Service reported from Kunming, the city where the Flying Tigers and OSS were headquartered, that the Nationalists were totally dependent on opium and “incapable of solving China’s problems.” 

Service’s reports contributed to the Truman Administration’s decision not to come to Chiang Kai-shek’s rescue at the end of the war. In retaliation, Chiang’s intelligence chief, General Tai Li, had his agents in America accuse Service of leaking the Kuomintang’s battle plans to a leftist newsletter. Service was arrested. After Service was cleared of any wrongdoing, the China Lobby persisted in attacking his character for the next six years. He was subjected to eight loyalty hearings, and dismissed from the State Department in 1951. 

Service’s persecution was fair warning that anyone linking the Nationalist Chinese to drug smuggling would, at a minimum, be branded a Communist sympathizer and his reputation ruined. That is how the US drug operation is still protected today, although security for the operation has improved, and whistleblowers are smeared in other ways. 

After World War Two the business of managing the government’s involvement in the illicit narcotics trade was given to the CIA, because it could covertly conduct support operations for, among others, the Nationalist Chinese in Taiwan. The CIA also relocated and supplied one of Chiang’s armies in Burma. This KMT army supported itself through the opium trade and the CIA flew the opium to places where it was converted to heroin and sold to the Mafia. The other bureaucracies – the military and the Departments of State, Justice and Treasury – provided protection along with the China Lobby congressmen and senators who controlled the little information that was made public. 

Mexico fits into this equation. The history of US relations with Mexico is the determinant factor in why the drugs-for-guns business is booming in Mexico right now. It has a lot to do with the United States treating Mexico not as the kind of ally Nationalist China was against the Communists, but as an ongoing threat that needs to be perpetually destabilized. The US has been destabilizing Mexico since Mexico made slavery illegal. American slaves were escaping into Mexico and the Southern states saw this as an act of war. Militias from the Southern states would launch raids into Mexico to get their slaves back, and Mexico would give the slaves sanctuary. 

There is a big dose of traditional US racism involved. Mexicans are considered inferior. They’re said to be uneducated and all immigrants are criminals and poor. So that’s a big element too. 

The animosity grew in World War One when Mexico entered into relations with Germany. Check out the famous Zimmermann telegram. 7 Since then the US has been wary that Mexico, with its impoverished population, harbors Communist sympathies. It does everything it can to prop up the elite and help it brutalize the lower classes and keep them down so they can’t organize themselves politically and economically. With help from the government, US corporations bribe the elite who run the civic and political institutions, so that Mexico can never support progressive nations in Latin America. 

The 1968 Tlatelolco massacre in Mexico City is an example of the CIA’s efforts to stifle political reform in Mexico. CIA heretic Phil Agee witnessed the event and wrote about it. It was Mexico’s version of Tiananmen Square, but the 300 demonstrators who were gunned down were said to be Communists, so the bloodbath was, in the American press, said to be justifiable. As Ronald Reagan was fond of saying, Mexico is “our backyard.” People were made to fear that Mexican labor leaders, farmers and sociologists were about to invade and conquer us, so we had to slaughter them in self-defense. That’s the context you have to see these things in. It’s Communism versus Capitalism. White versus black. Donald Trump plays on the same fears today. 

MCCARTHY: So Fast and Furious was not just a gun sting operation that went awry. Supposedly the US goal, according to Vicente Zambada-Niebla’s attorney, was to create a mega cartel. Does that make sense in some way based on your experience of watching how these things unfold? 

VALENTINE: I think the CIA is the mega cartel. It might serve the CIA’s purposes to have one central cartel in Mexico. But, certainly, no other organization in the world knows as much about drug trafficking. The CIA has computer systems that contain every bit of information about every trafficker and trafficking group; it knows where they bank and where they invest; it can predict their moves, whether in Afghanistan or Mexico. It uses all this information to manipulate events. 

Since 1973 the CIA has been in control of US narcotics intelligence worldwide. The function was taken away from the DEA and given to the CIA, which is the unseen hand in this Fast and Furious melodrama. The ATF and DEA are straw men in this drama; as law enforcement agencies, they’re shoved out in front of the CIA. But it’s the CIA and State Department that arrange what’s happening in Mexico, because, quite simply, US law enforcement agencies have no authority in Mexico. 

The State Department’s concerns about political relationships in the region trump any law enforcement concerns. Any time a law enforcement operation is conducted in a foreign nation it has to be approved by the State Department and the CIA. The CIA has the final say on anybody being recruited by any US law enforcement agency in Mexico. If I’m in the DEA or ATF and I want to recruit the Sinaloa cartel, or anyone in a cartel, I have to check with the CIA. The CIA runs a background check to find out whether the guy is working for the Russians or the North Koreans. The CIA is always worried that Mexicans are working for our enemies. You always hear about Hezbollah in Mexico. So the CIA has control over all informants recruited by the DEA and the ATF in Mexico, and the media knows this. Every reporter who works the Mexican beat knows this, but if they were to tell you, they’d be accused, like John Service or Chelsea Manning, of aiding the enemy. If they tell, they’re revealing national security secrets. 

So the media is prevented from mentioning that the CIA plans the little melodramas you see. The script is written by politicians in the White House and Congress. The CIA carries out their illegal operations and if one goes bust, it’s pinned on some hapless law enforcement agency. So the view the public has of these operations is totally skewed. 

The CIA’s purpose in having an informant in some Mexican cartel, or running a mega-cartel, has nothing to do with law enforcement. The CIA is not a law enforcement agency. It’s our Mafia operating in foreign nations. I don’t know which politicians and business people the CIA is backing in Mexico through these guns-for-drugs activities. But that’s what it’s about. It’s about promoting politicians and business people who will enact policies helpful to America while suppressing the Mexican people. Those are the motivations behind who the CIA selects as an informant in a particular cartel. 

MCCARTHY: So the ATF, the FBI, these are the fall guys. 

VALENTINE: The others, yes, but the FBI is never a fall guy. The FBI also has an “internal security” mandate. Sometimes there’s conflict, but the CIA will work with the FBI to pin it on someone else. The CIA’s object is making foreign nations abide by American policy. The FBI is protecting the US from any leftist threats. Its counterintelligence operations spill into Mexico, but they’re classified and you’ll never hear about them in the news. They don’t talk about the FBI in this kind of context in the news either. 

The FBI is the premier law enforcement branch of the US government but it has no authority over the CIA. It resisted the creation of the CIA for that reason. Under J. Edgar Hoover, the FBI also denied the existence of organized crime and the Mafia until 1963. It took decades to get to that point, because the crooks were anti-Communist and enforced racial repression. 

In 1951 Senator Estes Kefauver formed a committee to investigate organized crime in an attempt to delineate lines of authority. It tracked back to drug smuggling in Mexico. That’s in my books. 

According to a 14 July 1947 State Department report, Chinese Nationalist forces were, at that moment, “selling opium in a desperate attempt to pay troops still fighting the Communists.” The Commissioner of the Bureau of Narcotics, Harry Anslinger, knew that Kuomintang narcotics were reaching Mexico. In a November 1946 report to Anslinger, the FBN’s supervisor in New Orleans reported that, “Many Chinese of authority and substance gain their means from this illicit trade” and that, “In a recent Kuomintang Convention in Mexico City a wide solicitation of funds for the future operation of the opium trade was noted.” The agent listed the major Chinese traffickers by name. 

In February 1947, Treasury attaché Dolor DeLagrave, a former OSS officer, reported from Mexico City that three major drug rings existed, but he made no mention of Virginia Hill’s connections, Albert Spitzer and Alfred C. Blumenthal. Bugsy Siegel was killed in Virginia Hill’s house on 15 June 1947. 

In 1939, Meyer Lansky had sent Hill to Mexico where she seduced a number of “top politicians, army officers, diplomats and police officials.” 8 Hill soon came to own a nightclub in Nuevo Laredo and started making frequent trips to Mexico City with Dr. Margaret Chung. “Mom” Chung was an honorary member of the Hip Sing T’ong and had served as the attending physician to the Flying Tigers, the private airline formed under China Lobby luminary General Claire Chennault to fly supplies to the Nationalists in Kunming, a city infused with OSS agents and opium. 

As investigative journalist Ed Reid reported in The Mistress and the Mafia, the FBN knew that Dr. Chung was “in the narcotic traffic in San Francisco.” 9 Chung took large cash payments from Siegel and Hill, and delivered Kuomintang narcotics to Hill in New Orleans, Las Vegas, New York and Chicago. And yet, despite the fact that the FBN agents “kept her under constant surveillance for years,” they “were never able to make a case against her.” 10 

Why not? Because she was protected by her many influential friends in Washington, including Admiral Chester A. Nimitz. 

Agent Joe Bell, the FBN’s district supervisor in Chicago, theorized that Siegel’s murder, “paved the way to complete control of illegal narcotics distribution in California by the Mafia.” 11 

Bell was referring to a related drug smuggling operation Lansky initiated in Mexico in 1944 under Harold “Happy” Meltzer. Described as “the man who most feared Bugsy’s grab at Mexico,” Meltzer based his operation in Laredo, as fate would have it, directly across the border from Hill’s nightclub. He worked with the Mexican consul in Washington, who located suppliers and bribed border guards, and moved drugs to the Mafia in California. Bankrolled by Lansky, Meltzer traveled between Mexico City, Cuba, Hong Kong and Japan. 

Meltzer was an occasional CIA asset and in December 1960, the CIA asked him to join an assassination team. His proximity to Virginia Hill in Laredo suggests that he was a recipient of Dr. Chung’s Kuomintang narcotics. If that was the case, Siegel may not have been murdered by the Mafia, but by agents of the US government, because Bugsy’s grab for control of the CIA’s Mexican connection threatened to expose Dr. Chung’s protected Kuomintang operation. Even the way Siegel was murdered – by two rifle shots to the head – was characterized as very “ungangsterlike.” 12 

Anslinger knew that Spitzer and Blumenthal were Lansky’s associates and that large opium shipments were coming out of Mexico “under police escort,” but the FBN did nothing. In 1948 the FBN declared that Mexico was the source of half the illicit drugs in America – but did nothing about it because the drug trade enabled the CIA, which had been created in 1947, to destabilize the Mexican government. The CIA apparently connected Captain Rafael Chavarri, founder of Mexico’s version of the CIA, the Federal Security Directorate (DFS), with Mexico’s top drug smuggler, Jorge Moreno Chauvet. 

According to Peter Dale Scott, at this point the CIA “became enmeshed in the drug intrigues and protection of the DFS, its sister agency.” 13 

By 1950, Chauvet was receiving narcotics from the new Lansky-Luciano French connection, and the mob-connected former mayor of New York, William O’Dwyer, was now the US Ambassador to Mexico. 

All of this was known to Senator Kefauver. He and other top government officials were also aware that the government’s Faustian pact with the Mafia during World War Two had allowed the hoods to insinuate themselves into mainstream America. In return for services rendered during the war, Mafia bosses were protected from prosecution for dozens of unsolved murders, including the 11 January 1943 assassination of II Martello publisher Carlo Tresca in New York. 

The Mafia was a huge problem in 1951, equivalent to terrorism today. But it was also a protected branch of the CIA, which was co-opting criminal organizations around the world and using them in its secret war against the Soviets and Red Chinese. The Mafia had collaborated with Uncle Sam and had emerged from World War Two energized and empowered. They controlled cities across the country. Congress looked into this mess through the Kefauver Committee. 

Estes Kefauver was a Democratic senator from Tennessee whose goal was to run for President in 1952. His plan was to achieve favorable national attention by exposing the Mafia’s role in political corruption and labor racketeering. In order to embark on such a perilous mission, the ambitious senator needed only the approval of President Truman and Judiciary Committee Chairman Pat McCarran, a rabid segregationist, anti-Communist, and lynchpin in the China Lobby. 

A conservative with no love for Big City Democrats, McCarran recognized the self-promotional merit in Kefauver’s idea. But Nevada was dominated by organized crime figures, to the extent that McCarran was facetiously referred to as “the Gambler’s Senator.” So he decided to run the investigation himself. Then Senator Joe McCarthy claimed to have a list of 205 people in the State Department who were “known members” of the American Communist Party. McCarran at that point became preoccupied with setting up the Internal Security Subcommittee and joining the politically more promising Communist witch hunt. Unable to manage both projects simultaneously, he came to terms with Kefauver. 

Kefauver formed the Special Committee to Investigate Organized Crime in Interstate Commerce in 1951 and immediately hit a roadblock. By investigating the so-called “gambling syndicate”, he was destined to expose the Mafia’s ties to J. Edgar Hoover’s Establishment patrons, so Hoover refused to let FBI agents serve as investigators for the Committee. Hoover claimed he was too busy saving the country from Communists, and that it would be counterproductive to devote FBI resources toward investigating what he deemed to be consensual crimes – gambling and drugs. 

So Kefauver turned to Commissioner Anslinger for help, and Anslinger assigned his top agents as expert witnesses and investigators. Kefauver and his team of FBN agents visited the major cities and conducted their investigation, and at the end determined that “the vice squad” pattern “gave control of vice payments to a few officials and demoralized law enforcement in general.” 14 

The Committee concluded that local law enforcement managed local crime and that federal agencies were powerless to stop it. Street cops were taking payoffs from pimps, gamblers and drug dealers and kicking a percentage up to their bosses, who kicked another percentage back to the politicians who appointed them. The industrialists who put the politicians in power were happy, as long as the cops made sure the Mafia sold dope to blacks and Puerto Ricans. 

Nothing has changed. The CIA, FBI, ATF and DEA are performing the same function for their political bosses. They manage crime to maintain social divisions, and so capitalism can thrive. The Kefauver Committee said there’s nothing we can do about it. 

As Guy Debord famously said, “The Mafia is not an outsider in this world; it is perfectly at home. Indeed, in the integrated spectacle it stands as the model of all advanced commercial enterprises.” 

People have been aware of it for 65 years but can’t do anything about it because the national security state is an impregnable fortress and average citizens can’t get inside. Even if you understand what’s going on, five seconds later you’re chasing it out of your mind because there’s not a thing you can do about it. We can’t vote to end the secrecy that enables these rackets to exist. Clinton and Trump are rubbing it in our faces. They’re saying, “You can’t do a damn thing about it.” Cops killing blacks is unfortunate but cops are hardly ever punished. The CIA controls the world’s rackets the same way, and the federal government and its media allies keep it secret, and there’s nothing you can do about it except get riled up personally. 

MCCARTHY: It’s amazing how skillful they are at keeping the focus on a tiny part of the story and not even getting into the real story. It is interesting how they muddy issues. 

VALENTINE: Right now America has 5% of the world’s population and 25% of its prisoners. Most of them are in prison for drug-related offences. Talk about human rights abuses. After they joined forces with the Mafia, the capitalists got their Congressmen to keep increasing sentencing for drug offenses. They created a vast, privatized, profitable prison industry which in turn props up a huge law enforcement industry. Taken together, this is not freedom and democracy. 

Instead, the government/media propaganda machine has succeeded in demonizing the people who pack the prisons, just as it demonizes Muslims, in order to keep the homeland security industry growing. The disenfranchised minorities who are arrested for drug offenses get court-appointed lawyers who never seriously contest their cases; they cop pleas and go to prison. Human beings are the grist for this crime-mill that churns out money for investors; it’s systemic corruption, just like NAFTA, which has led to increased poverty and suffering in Mexico. And this provides the pretext for a surveillance state that’s equipped by companies staffed by former FBI, DEA, ATF and CIA agents. It’s creating terrorism to subvert the justice system and assure them political control of Americans. That’s the domestic end of this drugs-for-guns boondoggle. 

MCCARTHY: So overseas we use it as a tool of policy supporting the people we like and eliminating the people we don’t like. At home we use it to keep people under political control. 

VALENTINE: Yep. All the evidence is there. If you look at what the CIA has done – the coups d’état of leftist governments and alliances with crooks and fascists – and what they’re doing now and what they say behind the scenes, it becomes evident that what I’m saying is fact. But the media bosses are partners in this enterprise, and they won’t allow their networks to report on anything of substance. If rogues among them do, they’re expelled. 

MCCARTHY: And there’s the horrible example of Gary Webb. I mean if that’s not a warning to journalists what can happen to them… 

VALENTINE: Lots of journalists have been harassed for even having hinted at the truth. Lots of other people have suffered the same way, starting with the Foreign Service officer I mentioned earlier, John Service. 

MCCARTHY: If drugs were to be decriminalized, then that whole thing goes up in smoke. You can’t have all these cops on the payroll doing nothing except taking bribes. You can’t have the CIA running drug cartels. They always say it would be a humanitarian disaster if we let drugs be legal; there’d be people dying in the streets from overdoses, and that’s why we’re keeping all this going for you. 

VALENTINE: If you look at every other country where they don’t have these, to use the cliché, “draconian drug laws”, people are not dead in the streets with needles sticking out of their arms and coke pipes shoved up their nose. People want to live healthy lives, but political and economic factors keep them down. Discrimination and lack of economic opportunity turns segments of society to the underground drug business, both as sellers and users. Among the protected rich and famous it’s a kick and something they can get away with because they have lawyers and access to the Betty Ford Clinic. 

The government is creating conditions across the board that are conducive to taking drugs. The pharmaceutical industry is part of the problem, along with its co-conspirators in the advertising industry; every time you turn on the TV there’s a commercial telling you to take a pill. The next commercial says don’t take that pill, take this pill. This is the free market at work, sucking the life out of people. 

It would help if the air waves were publicly and not privately owned, and if we could get rid of all this advertising. It would help if we could nationalize the pharmaceutical industry and take the profit out of healthcare and law enforcement. Then maybe we could experience something like democracy. But as long as the vulture capitalists control the national security state and the media, that isn’t going to happen. 

MCCARTHY: We started out with a limited discussion about Mexico, but once you start unraveling one thread, it really does lead to this discussion we‘re having – because it’s not about the gun- and drug- running into Mexico. It’s not even about the history of the US supporting drug operations all over the world. It’s about domination and control. It’s about a few people conspiring, literally, to keep the majority of people in a controlled and controllable state. 

VALENTINE: Yep. While you’re looking at this one particular shell game, 40 other shell games are going on. If they can keep you focused on the sensational operations, like Gunrunner, you’re not going to be looking at what’s important: the big picture. 

MCCARTHY: It’s all about misdirection, the greatest magician’s trick. Even in warfare, the ultimate skill is to misdirect the attention of your enemy. So, Doug, thank you so much. You’re the guy doing all the digging. You’re the one looking at this every day and I can understand the cynicism. But since you brought that up, if one more person understands what’s going on it’s a victory; not a massive victory, but it’s a victory. Big victories have to start with small victories.

next
PART III THE PHOENIX FOUNDATION OF HOMELAND SECURITY
THE SPOOK WHO BECAME A CONGRESSMAN: WHY CIA OFFICERS CANNOT BE ALLOWED TO HOLD PUBLIC OFFICE

Notes
Chapter 13 
1 Allan Nairn, “Confessions of a Death Squad Officer”, The Progressive, March 1986. 
2 See also the “War Crimes as Policy” article. 
3 TDY means temporary duty. 
4 Meos is another name for the Hmong. 
5 Carl Rowan column “Pressure Builds For Exposing Viet Nam Graft” was quoted and cited in 21 November 1966 letter from Senator Stuart Symington to Secretary of the Army Stanley Resor. 
6 Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade, Lawrence Hill Books, Brooklyn, 1991, p. 226. 
7 Nguyen Ngoc Huy and Stephen B Young, Understanding Vietnam, The DPC Information Service, The Netherlands, 1982, p. 139, 148. 
8 The Illicit Traffic in Weapons and Drugs Across the United States-Mexican Border, 95th Cong., 1st session, January 12, 1977 , GPO, Washington, DC, 1977. 
9 Henrik Kruger, The Great Heroin Coup, South End Press, Bosston, 1980, p. 178. See also James Mills, The Underground Empire: Where Crime and Governments Embrace. 
10 The Phoenix Program, p. 424. 
11 John Shiffman and Kristina Cooke, “U.S. directs agents to cover up program used to investigate Americans”, Reuters, 5 August 2013. 
12<http://www.boilingfrogspost.com/2013/06/19/podcast-show-112-nsa-whistleblower-goes-on-recordreveals-new-information-namesculprits/>

Chapter 14 
1 Michael B Kelley, “CONFIRMED: The DEA Struck A Deal With Mexico’s Most Notorious Drug Cartel”, Business Insider, 13 January 2014. 
2 Kinder, “Stable Force” p. 916. See also Jonathan Marshall, “Opium and the Politics of Gangsterism in Nationalist China, 1927-1945”. 
3 Marshall, “Gangsterism”, Bulletin of Concerned Asian Scholars, July-September 1976, p. 29. 
4 William O. Walker III, Opium and Foreign Policy: The Angle-American Search for Order in Asia, 1912-1954 The University of North Carolina Press, Chapel Hill and London, p. 78. 
5 Keswick in World War Two ran the British Special Operations Executive (SOE) and provided former FBN Agent Garland Williams with the training manuals used to train OSS officers. 
6 Jill Jonnes, Hep Cats, Narcs and Pipe Dream, New York: Scribner, 1996, p. 95. 
7 As explained on the National Archives website, “In January of 1917, British cryptographers deciphered a telegram from German Foreign Minister Arthur Zimmermann to the German Minister to Mexico,von Eckhardt, offering United States territory to Mexico in return for joining the German cause. This message helped draw the United States into the war and thus changed the course of history.” 
8 Ed Reid, The Mistress and the Mafia, Bantam, New York, 1972, p. 42. 
9 Ibid., p. 90. 
10 Ibid. p. 90. 
11 Ibid. p. 123. 
12 Ibid. p. 129. 
13 Peter Dale Scott, Deep Politics and the Death of JFK, University of California Press, Berkeley 1993, p. 142. 
14 William Howard Moore, The Kefauver Committee and the Politics of Crime 1950-1952, University of Missouri Press, 1974, p. 105.

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