Part 3: The CIA & the Cult of Intelligence....Special Operations....Proprietary Organizations

The CIA and the 
Cult of Intelligence
By Victor Marchetti 
and John D. Marks
FOUR: 

Special Operations 

You have to make up your mind that you are going to have an intelligence agency and protect it as such, and shut your eyes some and take what is coming. 

-SENATOR JOHN STENNIS 

Chairman, Joint Senate 

Committee for CIA Oversight 

November 23, 1971 

COVERT action—intervention in the internal affairs of other nations—is the most controversial of the CIA's clandestine functions. It is the invariable means to the most variable ends. It is basic to the clandestine mentality. And the crudest, most direct form of covert action is called "special operations." 

These activities, mostly of a paramilitary or warlike nature, have little of the sophistication and subtlety of political action (penetration and manipulation) or propaganda and disinformation. Although planned by the CIA's professionals, these operations are to a large extent carried out by agency contract employees and mercenaries—both American and foreign. 

Within the CIA's Clandestine Services, "special ops" have always been viewed with mixed emotions. Most of the professionals, especially in recent years, have looked down on such activities, even while at times recommending their use. It is widely recognized within the agency, however, that less direct forms of covert action have their limitations, especially when timely, conclusive action is thought necessary to put down a troublesome rebel movement or to overthrow an unfriendly government. In these cases, the CIA usually calls on its own "armed forces," the Special Operations Division (SOD), to do the job. 

By definition, special ops are violent and brutal; most clandestine operators prefer more refined techniques. The CIA professional is a flimflam artist, involved in the creative challenge of plotting and orchestrating a clandestine campaign without resorting to violence. In such non-paramilitary covert action, the operator tends to keep his hands unbloodied, and his crimes are of the white-collar variety—conspiracy, bribery, corruption. His failure or exposure is normally punished only with expulsion from the country where he is operating. He is, in the end, merely engaging in a "gentleman's" game. The paramilitary operator, on the contrary, is a gangster who deals in force, in terror, in violence. Failure can mean death—if not to the operator himself, then to the agents he has recruited. The SOD man wages war, albeit on a small and secret level, but none of the rules of warfare apply. His is a breed apart; in the CIA, special ops types are sometimes referred to as the "animals" of the agency. 

In the CIA's early years, and especially during the Korean War, many paramilitary (PM) specialists, mostly former military men, were hired as career officers. But the CIA soon learned that their military skills were not easily transferable to other types of clandestine work and that most of the PM experts were next to useless in the bureaucratic and diplomatic settings in which the agency usually functions. At times, when special operations were at a low ebb, the agency had difficulty in finding jobs that the PM specialists could handle. Hence, during the late 1950s PM manpower was gradually reduced to a cadre of a couple of hundred operators capable of doing the planning and the training for paramilitary operations. When more men were needed, the agency would hire them on short-term contracts. These contract forces tended to be a melange of ex-military men, adventurers, and outright mercenaries; others came to the CIA on direct loan from the armed services. 

The U.S. Army's Special Forces and the counter guerrilla units of the Navy (SEALs) and Air Force (SOFs) provided many of the recruits, since veterans of these branches already possessed the most up-to-date paramilitary skills. Sometimes these military men "resigned" from the service in order to accommodate the CIA's cover requirements for their activities, but they did so with the understanding that eventually they would return to military service—their time with the CIA counting toward promotion and retirement. (This process is known in the intelligence trade as "sheep dipping.") But the agency was always careful to keep direct control over the planning, logistics, and communications of its special or paramilitary operations. The contractees merely did the dirty work. 

The CIA set up training facilities in the United States and overseas to prepare both its own career operators and the temporary personnel on contract for paramilitary work. Camp Peary—"The Farm"—in southeastern Virginia provided the basic courses. More advanced techniques, such as demolitions and heavy weapons, were taught at a secret CIA base in North Carolina. Instruction in parachuting and air operations was provided at both these facilities and at the headquarters of Intermountain Aviation near Tucson, Arizona. A secret installation in the Canal Zone was the site for jungle warfare and survival training. Here the agency's trainees would play paramilitary war games, pitted against the elite of the U.S. Army's Special Forces. 

Large-scale paramilitary operations also necessitated special training bases for the mercenaries. For the 1954 Guatemalan invasion, the CIA built installations in Nicaragua and Honduras. For the 1961 attack at the Bay of Pigs, sites were established again in Nicaragua and this time also in Guatemala, which had become available to the CIA as a result of its success there seven years earlier. For its Tibetan operation, the Agency constructed extensive support facilities in Northeast India and brought large numbers of guerrillas to a deserted Army base in Colorado for special training. And for its many Southeast Asia adventures, the Special Operations Division had "a home away from home" under Navy cover on the Pacific island of Saipan. 

Saipan, however, was not a U.S. possession, but rather a Trust Territory of the United Nations under U.S. care, and consequently there was some concern within the agency that the establishment and operation of a secret military base there would raise sticky problems in the U.N. But being masters of the art of cover and deception, the CIA contingent on Saipan merely "sanitized" the base whenever U.N. representatives visited the island on inspection tours. According to a native of the island, trainees and instructors alike disappeared; the barbed wire and "no admittance to unauthorized personnel" signs were taken down. In a day or so, the camp was made to appear just like any other jumble of military Quonset huts, which the inspectors ignored. As soon as they were gone, however, all was returned to normal, and the CIA's special ops training was begun anew. One former officer of the CIA's Clandestine Services, who was trained in special ops, wrote this account of his experiences for Ramparts magazine: 

The stated purpose of paramilitary school was to train and equip us to become instructors for village peasants who wanted to defend themselves against guerrillas. I could believe in that. 

Some of the training was conventional: But then we moved up to the CIA's demolition training headquarters. It was here that Cubans had been, and still were [in the mid-1960s] being trained in conventional and underwater demolitions. And it was here that we received training in tactics which hardly conformed to the Geneva Convention. The array of outlawed weaponry with which we were familiarized included bullets that explode on impact, silencer-equipped machineguns, homemade explosives and self-made napalm for stickier and hotter Molotov cocktails. We were taught demolition techniques, practicing on late model cars, railroad trucks, and gas storage tanks. And we were shown a quick method of saturating a confined area with flour or fertilizer, causing an explosion like in a dustbin or granary. 

And there was a diabolical invention that might be called a mini-cannon. It was constructed of a concave piece of steel fitted into the top of a # 10 can filled with a plastic explosive. When the device was detonated, the tremendous heat of friction of the steel turning inside out made the steel piece a white-hot projectile. There were a number of uses for the mini-cannon, one of which was demonstrated to us using an old army school bus. It was fastened to the gasoline tank in such a fashion that the incendiary projectile would rupture the tank and fling flaming gasoline the length of the bus interior, incinerating anyone inside. It was my lot to show the rest of the class how easily it could be done. It worked, my God, how it worked. I stood there watching the flames consume the bus. It was, I guess, the moment of truth. What did a busload of burning people have to do with freedom? What right did I have, in the name of democracy and the CIA, to decide that random victims should die? The intellectual game was over. I had to leave. 

The heavy reliance on paramilitary methods in the CIA's special operations is a direct outgrowth of the clandestine guerrilla programs undertaken by the Office of Strategic Services during World War II. The OSS, like its British counterpart, Special Operations Executive, made extensive use of indigenous underground resistance movements to sabotage the activities of German and Japanese armed forces in the occupied countries and to foment national unrest in these areas. In running such operations, the OSS officers performed as advisors and acted as channels for communications and support from the Allied powers. Basic to the success of the OSS operations was the fact that the countries in which it conducted its covert activities were under the military control of foreign armies despised by native resistance forces. Even so, the resistance movements in most occupied countries enjoyed limited success until the regular Allied forces had won sufficient victories to force the Axis powers into an essentially defensive strategy of protecting their homelands. 

During the early postwar years, as we have noted, the CIA's initial reaction to the Cold War was to employ the wartime tactics of the OSS in new efforts to organize and promote paramilitary resistance movements in such areas as Albania, the Ukraine, and other parts of Eastern Europe. Almost all of these operations were complete failures. (Similar setbacks occurred in agency paramilitary operations against China and North Korea.) The controlling military forces in Eastern Europe, although supported by the Soviet Union, were for the most part of native origin— often directed by the same political elements that had cooperated with the OSS and other Allied intelligence services in the prior struggle against the Nazi occupiers. 

Despite a large amount of disenchantment with the communist regimes on the part of the indigenous populations, which the CIA grossly misinterpreted as revolutionary fervor, the war-weary populations were not willing to join, in significant numbers, resistance groups with little chance of success. And under the prevailing political circumstances of the times, there was little likelihood of eventual overt military support from the U.S. armed forces. Thus, the Eastern European governments, with their rigid internal-security systems, were easily able to thwart CIA paramilitary efforts against them. 

In those areas of the world not under communist domination, however, the CIA's clandestine paramilitary operations fared somewhat better, at least during the early 1950s. But unlike the OSS, which had supported partisan groups fighting against fascist dominated governments, the CIA more often than not found itself in the position of supporting the counterinsurgency efforts of established regimes threatened from the left by local guerrilla movements. Blinded by its fear and distrust of communism, the CIA had gradually drifted into a posture whereby its paramilitary operations were in support of the status quo. The agency, in pursuit of "stability" and "orderly change," increasingly associated itself with protecting vested interests. In the view of much of the world, it had become a symbol of repression rather than freedom. While the CIA's paramilitary activities were at times successful, many of the victories won took on a Pyrrhic quality. They always seemed to work against legitimate social and political change for which the U.S. government would in later years be held accountable by the peoples of these countries. 

During the first years of its existence and particularly after the outbreak of the Korean War in 1950, the CIA recruited and trained large numbers of officers for special operations. Many were, of course, intended for service in Korea, but the American commander there, General Douglas MacArthur, was not particularly fond of clandestine paramilitary operations, and he did his best to keep the CIA's special-ops experts out of his theater. The agency did nevertheless manage to launch a large number of secret operations, resulting in the loss of numerous Korean agents and few, if any, meaningful gains. 

With its newly expanded staff, the CIA's Special Operations Division was able to turn its attention to other countries in Asia. Attempts were made to develop resistance movements in China, but these efforts accomplished virtually nothing more than the capture of agency officers John Downey and Richard Fecteau—and death for the Nationalist Chinese agents they were helping to infiltrate. Mainland China, like Eastern Europe, was not fertile territory for agency operations. 

There were some successes elsewhere. The Huk insurgency in the Philippines was put down with CIA help. Agency-supported Nationalist Chinese troops in Burma (when not engaging in their principal pastime of trafficking in opium) were induced to conduct occasional raids into the hinterland of Communist China. In South Vietnam the CIA played a large part in consolidating the power of the Diem regime—and this was considered by the agency to be a major accomplishment. 

Such gains in Southeast Asia were offset by some rather notable failures, most particularly the agency's inability to overthrow President Sukarno of Indonesia in 1958. While this CIA-supported revolt was going on, the U.S. government categorically denied providing any support to the anti-Sukarno forces. In March 1958, Secretary of State John Foster Dulles told a congressional committee that "we are not intervening in the internal affairs of this country." Six weeks later President Eisenhower stated that while "soldiers of fortune" probably were involved in the affair, "our policy is one of careful neutrality and proper deportment all the way through so as not to be taking sides where it is not of our business." These statements were of course false. 

The Indonesian government put little credence in the denials and denounced the United States for its intervention. The New York Times, however, chose to believe the official American version and indignantly scolded the Indonesians for circulating false reports saying that the U.S. government was giving aid to the rebels. The Times commented that the Secretary of State and "the President himself" had denied American involvement, and that "the United States is not ready ... to step in to help overthrow a constituted government." The pattern of lying to cover up failure was established; it would find further manifestation during the U-2 affair, and again at the Bay of Pigs. 

In 1959 the CIA found another opportunity to engage in special ops when the Tibetans revolted against the Chinese communists who eight years before had imposed their rule on the mountain kingdom. Sparked by Peking's move to replace the Dalai Lama, Tibet's traditional religious and temporal ruler, with the Panchen Lama, an important religious leader controlled by the Chinese, there was a short lived uprising. After its failure, the Dalai Lama with several thousand followers and troops escaped to India, where he and his loyalists were granted sanctuary. Then, ( DELETED ) taken on a tour of friendly Asian and European capitals as living, though somewhat incongruous proof—since he was himself an autocrat—of Communist China's totalitarianism. Later, he was brought to the United States for a visit, during which he appeared at the United Nations to plead his case and to denounce the Peking government. ( DELETED ) special ops officers began secretly training and reequipping the Dalai Lama's troops—fearsome Khamba horsemen—in preparation for eventual clandestine forays into Tibet. 

Some of the Tibetans were quietly brought to the United States for special paramilitary training at Camp Hale, Colorado. Although the CIA officers led their Tibetan trainees to believe that they were being readied for the reconquering of their homeland, even within the agency few saw any real chance that this could happen. Some of the covert operators who worked directly with the Tibetans, however, eventually came to believe their own persuasive propaganda. Years later, they would flush with anger and frustration describing how they and their Tibetans had been undone by the bureaucrats back in Washington.[1] Several of them would turn for solace to the Tibetan prayers which they had learned during their years with the Dalai Lama. 

[1] This phenomenon of "emotional attachment" is not rare in the clandestine business, but it is particularly prevalent in special operations. The officers who engage in special ops often have a deep psychological need to belong and believe. This, coupled with the dangers and hardships they willingly endure, tends to drive them to support extreme causes and seek unattainable goals.

From the beginning of the Tibetan operation, it was clear that its only value would be one of harassment. Spot raids against Chinese facilities in the backward mountain country were an annoyance to Peking and a reminder of its vulnerability. But the dream of reoccupying the land and reestablishing the Dalai Lama as its political ruler was an impossible one. 

The guerrilla raids of the Dalai Lama's forces into Tibet, planned by CIA operators and on occasion led by agency contract mercenaries, were supported and covered by "private" planes of the Civil Air Transport complex, a CIA proprietary which was also instrumental in secretly supplying weapons ( DELETED ) part, the raids accomplished little beyond giving the Tibetan troops some temporary satisfaction and fanning their hopes that someday they would lead a true invasion of their homeland. Communication lines were cut, some sabotage was carried out, and from time to time an ambush of a small Chinese Communist force was undertaken. 

One such ambush resulted in an intelligence windfall. The Tibetans had waylaid a small military convoy on a lonely mountain road and were preparing to put the torch to the Chinese vehicles when it was discovered that one of them contained several mailbags. A quick examination disclosed that in addition to the routine mix of general correspondence, the mail included official governmental and military documents being delivered from China proper. The mailbags were salvaged and returned to India by the Tibetan guerrillas, where they were turned over to the CIA operatives working on the operation. 

The contents of the mailbags were later analyzed in detail by the agency's China experts in Langley, Virginia. Data and insights as to the status of the Chinese occupation of Tibet were found in abundance: While difficulties were being encountered in imposing communist rule on the feudal system of the mountain nation, it was clear that the Chinese were in full control of the situation and were determined to have their way. Even more interesting to the agency's China watchers, however, was authentic background information revealing that Mao Tse-tung's "Great Leap Forward" had failed in several crucial respects to achieve its goal of raising China from the depths of underdevelopment. As incredible as it may seem in retrospect, some of the CIA's economic analysts (and many other officials in Washington) were in the early 1960s still inclined to accept much of Peking's propaganda as to the success of Mao's economic experiment. The acquisition of the Tibetan documents was a significant contribution to the resolution of this particular debate within the U.S. intelligence community. 

Without any other noteworthy gains, the Tibetan operation sputtered hopelessly on. A few years later, at the end of 1964, the Chinese removed the Panchen Lama from power, setting off another minor revolt. But the Dalai Lama's CIA-trained troops, now more than five years in exile in India, were unable to come to the rescue of their countrymen. With the CIA's Bay of Pigs defeat still fresh in American minds, there was little interest in Washington in supporting the dreams of the Khamba horsemen. Gradually the Tibetan operation atrophied. By the late 1960s the CIA's clandestine operatives were interested only in seeking a graceful way to terminate their association with the Dalai Lama and his aging, now useless troops. 

The Tibetan operation was soon overshadowed and succeeded by CIA involvement in the Congo. The chaotic strife which gripped that country almost from the moment it became independent of Belgian rule provided the CIA, along with intelligence services of many other countries, fertile ground for special operations. The U.S. government's intent was to promote a stable pro-Western regime that would protect foreign investments, and the CIA was given much of the responsibility for carrying out this policy. 

At first the agency's covert activities were confined to political manipulation and cash payments to selected politicians, but as the Congolese political scene became more and more unraveled, the agency sent its paramilitary experts and mercenaries to support the new government. By 1964, CIA B-26 aircraft flown by Cuban pilots under contract with the CIA were carrying out regular bombing missions against rebel areas. Later, in 1966, the New York Times would describe the CIA planes as "an instant air force." While the agency was not completely happy with this publicity, many operators were pleased with the newspaper's recognition of the CIA's skill in putting the operation together on comparatively short notice. 

Relying in large part on the considerable assistance furnished by the CIA and other U.S. government agencies, the central Congolese government under President Mobutu was finally able to impose some degree of stability throughout the country. ( DELETED ) During the years when the Tibetan and Congolese programs were in full operation, the CIA and its Special Operations Division were already becoming increasingly preoccupied with Southeast Asia. In Laos, agency operators were organizing a private army (L'Armee Clandestine) of more than 30,000 men and building an impressive string of bases throughout the country. A few of these bases were used as jumping off points to send guerrilla raiding parties into North Vietnam and China. The secret war in Laos was viewed within the CIA with much more favor than the huge military struggle that eventually developed in Vietnam. The fighting was not highly visible to the American public or the world. In fact, the Laotian war was years along before the U.S. Congress even became aware it was going on. 

In Laos the CIA was in complete control, but at no time were more than forty or fifty operations officers required to direct the paramilitary effort. The dirty and dangerous work—the ground fighting—was handled by hundreds of agency contract personnel and more than 30,000 Lao tribesmen under the leadership of General Vang Pao— whom the CIA from time to time secretly decorated with "intelligence" medals. The CIA's Laotian forces were augmented by thousands of Thai "volunteers" paid by the agency. Air support, an extremely dangerous business in Laos, was supplied by Air America—a CIA-owned airline—and on occasion by the Thai Air Force. Thus, while the CIA's special-ops officers masterminded the war and called all the shots, largely from the Laotian capital of Vientiane or from secure bases upcountry, most were not required to run the physical risks of war. The Laotian operation was, as special operations go, a near-perfect situation for the career officer. 

Meanwhile, in Vietnam the CIA supported and financed a force of roughly 45,000 Civilian Irregular Defense Guards (CIDG's), local guerrilla troops who fought under the operational direction of the U.S. Army's Special Forces. SOD operators and agency contractees ran the Counter Terror teams which employed similar methods to oppose the Vietcong's terror tactics of kidnapping, torture, and murder. The agency also organized guerrilla raids against North Vietnam, with special emphasis on intrusions by seaborne commando groups coming "over the beach" on specially designed, heavily armed high-speed PT-type boats. At least one such CIA raiding party was operating in that part of the Tonkin Gulf in 1964 where two U.S. destroyers allegedly came under attack by North Vietnamese ships. These CIA raids may well have specifically provoked the North Vietnamese action against the destroyers, which in turn led to the passage of the Tonkin Gulf resolution by the U.S. Congress in 1964, thus setting the stage for large-scale American military involvement in Indochina. 

The CIA's special operations in Southeast Asia were massive in scale and an important part of the overall U.S. war effort. Many of these operations are described in detail in official U.S. government documents published in The Pentagon Papers. Nevertheless, a few operations not mentioned therein deserve particular note. One involved the Nungs, a national minority of Chinese hill people who fought on the French side in the first Vietnam war and then came south in large numbers after 1954. The Nungs were known to be extremely fierce fighters, and they became a favorite source of manpower for CIA operations in South Vietnam. In fact, casual observers could nearly always spot secret CIA installations in the Vietnamese provinces by the Nung guards out front, dressed invariably in jungle camouflage uniforms. 

In addition, Nung mercenaries were often sent by the CIA on forays along the Ho Chi Minh trail. Their function was to observe North Vietnamese and Vietcong supply movements and on occasion to make attacks against convoys, or to carry out sabotage on storage depots. Since most of the Nungs were illiterate and had great difficulty in sending back quick, accurate reports of what they saw, the CIA technicians developed a special kind of radio transmitter for their use. Each transmitter had a set of buttons corresponding to pictures of a tank, a truck, an artillery piece, or some other military-related object. When the Nung trail watcher saw a Vietcong convoy, he would push the appropriate button as many times as he counted such objects go by him. Each push sent a specially coded impulse back to a base camp which could in this way keep a running account of supply movements on the trail. In some instances the signals would be recorded by observation planes that would relay the information to attack aircraft for immediate bombing raids on the trail. 

The Nung units made special demands on their CIA case officers, and consequently they cost the agency about 100 times as much per soldier as the Meos fighting in CIA's L'Armee Clandestine in Laos, who could be put into the field for less than ten cents per man per day. The higher cost for the Nungs' services was caused by their unwillingness to go into remote regions under agency command unless they were regularly supplied with beer and prostitutes— thus, the agency had no choice but to provide flying bar and brothel services. 

Even though one of the CIA's own airlines, Air America, handled this unusual cargo, the cost of the air support was still high. The CIA's case officers would have preferred to give the Nungs whiskey, which, while more expensive to buy, was considerably lighter and hence cheaper to fly in, but the Nungs would fight only for beer. The prostitutes also presented a special problem because the agency did not want to compromise the secrecy of the operations by supplying women from local areas who might be able to talk to the Nungs. Thus, Air America brought in only prostitutes from distant parts of Southeast Asia who had no language in common with the Nungs. 

With their characteristic enthusiasm for gimmicks and gadgetry, the CIA came up with two technical discoveries in the mid-1960s that were used in Vietnam with limited success but great delight. The first was a chemical substance originally developed for oil drilling that when mixed with mud increased the mud's slipperiness. The agency hoped to be able to drop the chemical on the Ho Chi Minh trail during the rainy season in order to cause mud slides and block the supply route. In actual practice, however, whatever damage was caused by the chemical was quickly repaired by the Vietcong and North Vietnamese. 

The agency's other discovery was a weapons detection system. It worked by spraying a special chemical on the hands of a suspected Vietcong and then, after a few minutes, shining an ultraviolet light on his hands. If the chemical glowed in a certain manner, that meant that the suspect had held a metal object—in theory, a weapon—during the preceding twenty-four hours. The system's main drawback was that it was just as sensitive to steel farm implements as to guns and it could implicate a person who had been merely working with a hammer. The CIA considered the system such a success, however, that it passed it on through a domestic training program to the police forces of several American cities. ( DELETED ) 

Latin America in 1954 was the scene of one of the CIA's greatest paramilitary triumphs—the successful invasion of Guatemala by an agency-organized rebel force. And it was in Latin America that the CIA seven years later suffered its most notable failure—the abortive invasion of Cuba at the Bay of Pigs. But the agency was slow to accept defeat in the Cuban operation. The only reason for the failure, the CIA's operators believed, was that President Kennedy had lost his nerve at the last minute, refusing more air support for the invasion and withholding or reducing other possible assistance by U.S. forces. Consequently, the agency continued its relationships with its "penetrations" of Cuban exile groups—in a way reminiscent of its lingering ties with Eastern European emigre organizations from the early Cold War period. And the CIA kept many of the Bay of Pigs veterans under contract, paying them regular salaries for more than a decade afterward. 

The failure at the Bay of Pigs did not prevent the CIA from conducting guerrilla activities against Cuba. The agency's operational bases in the United States were still intact, and these bases were used to launch numerous raids against Cuba. The agency smuggled men, arms, equipment, and money onto the island by sea and air, but Castro's forces almost always either captured or killed the invaders and their contacts inside Cuba. Time after time, the Cuban government would parade CIA-sponsored rebels before television cameras to display them and their equipment to the Cuban public and the world. Often the captives made full confessions of the agency's role in their activities. 

Nevertheless, the CIA kept looking for new and better ways to attack the Castro government. Under contract to the agency, the Electric Boat Division of General Dynamics at Groton, Connecticut developed a highly maneuverable high-speed boat designed for use by guerrilla raiders. The boat was supposed to be faster than any ship in the Cuban navy, and thereby able to move arms and men into Cuba at will. There were numerous delays in putting the boat into production, however, and no deliveries were made up to 1967. By that time, the U.S. was too deeply involved in Southeast Asia to think seriously about a new invasion of Cuba. 

The CIA, therefore, quietly dropped the boat project and turned the developmental model over the U.S. Navy. Also during the mid-1960s, ( DELETED ) By 1968, almost everyone in the Clandestine Services had finally accepted the fact that special operations against Cuba had outlived their usefulness. To be sure, there were still some diehard veterans around who would continue to propose new schemes, but even "Frank Bender"—the heavy-accented, cigar-smoking German refugee who had helped manage the Bay of Pigs fiasco—could no longer bring himself to believe in them. The death knell for CIA Cuban operations was sounded that year, seven years after the Bay of Pigs, when the agency closed down its two largest bases in Florida. One of these, located on an old naval air station at Opalocka, had served as an all-purpose base for CIA-sponsored raids on Cuba. ( DELETED ) 

While the CIA was largely concerned with Cuba in its Latin American operations during much of the 1960s, the rest of the continent was by no means neglected. For the most part, the agency's aim was not to overthrow particular Latin American governments but rather to protect them from local insurgent movements. The CIA generally avoided getting involved in any large way, instead using relatively small amounts of covert money, arms, and advisors to fight leftist groups. While this switch in tactics reflected the counterinsurgency theories popular in the Kennedy and Johnson administrations, it also came as a result of the diversion of a substantial part of the nation's military resources—covert and otherwise—to Southeast Asia. 

The CIA assumed the role of coordinator of all U.S. government counterinsurgency activities in Latin America, and other agencies—particularly AID, with its police-training programs, and the Defense Department, with its military-assistance and civicaction programs—provided the CIA with cover and additional resources. Much of the agency's manpower for Latin American special operations was furnished by the U.S. Army's Special Forces; small detachments of Green Berets were regularly placed under CIA control. These soldiers usually came from the Third Battalion of the Seventh Special Forces, located at Fort Gulick in the Canal Zone. The agency had its own paramilitary base in the Canal Zone, and even when the Special Forces carried on missions outside the CIA's direct command, agency operators kept in close touch with what was going on. 

Since 1962 more than 600 Special Forces "mobile training teams" have been dispatched to the rest of Latin America from Fort Gulick, either under direct CIA control or under Pentagon auspices. Green Berets participated, for example, in what was the CIA's single large-scale Latin American intervention of the post-Bay of Pigs era. This occurred in the mid-1960s, when the agency secretly came to the aid of the Peruvian government, then plagued by guerrilla troubles in its remote eastern regions. Unable to cope adequately with the insurgent movement, Lima had turned to the U.S. government for aid, which was immediately and covertly forthcoming.

The agency financed the construction of what one experienced observer described as "a miniature Fort Bragg" in the troubled Peruvian jungle region, complete with mess halls, classrooms, barracks, administrative buildings, parachute jump towers, amphibious landing facilities, and all the other accoutrements of paramilitary operations. Helicopters were furnished under cover of official military aid programs, and the CIA flew in arms and other combat equipment. Training was provided by the agency's Special Operations Division personnel and by Green Beret instructors on loan from the Army. 

As the training progressed and the proficiency of the counter guerrilla troops increased, the Peruvian government grew uneasy. Earlier, the national military commanders had been reluctant to provide personnel for the counterinsurgency force, and thus the CIA had been required to recruit its fighting manpower from among the available local populace. By paying higher wages than the army (and offering fringe benefits, better training, and "esprit de corps") the agency soon developed a relatively efficient fighting force. In short order, the local guerrillas were largely wiped out. A few months later, when Peru was celebrating its chief national holiday, the authorities refused to allow the CIA-trained troops into the capital for the annual military parade. Instead, they had to settle for marching through streets of a dusty provincial town, in a satellite observance of the great day. Realizing that many a Latin American regime had been toppled by a crack regiment, Peru's leaders were unwilling to let the CIA force even come to Lima, and the government soon moved to dismantle the unit. As large and successful as the CIA's Peruvian operation might have been, it was outweighed in importance among agency leaders by a smaller intervention in Bolivia that occurred in 1967; for the CIA was out for bigger game in Bolivia than just local insurgents. The target was Che Guevara. 

The Tracking of Che 
When he vanished from the Cuban scene in the spring of 1965, there were reports that Ernesto "Che" Guevara, the Argentinian physician and comrade-in arms of Fidel Castro, had challenged the Cuban leader's authority and, as a result, had been executed or imprisoned. There were other reports that Guevara had gone mad, beyond all hope of recovery, and was under confinement in a villa somewhere in the Cuban provinces. And there were still other reports that Che had formed a small cadre of dedicated disciples and had gone off to make a new revolution. At first no one in the CIA knew what to believe. But eventually a few clues to Guevara's whereabouts began to dribble in from the agency's field stations and bases. They were fragmentary, frustratingly flimsy, and, surprisingly, they pointed to Africa—to the Democratic Republic of the Congo, now called Zaire. Yet another insurrection was going on in the former Belgian colony, and information from the CIA's operatives in the field indicated that foreign revolutionaries were participating in it. Some of their tactics suggested the unique style of Che Guevara. 

Before the intelligence could be verified, however, the rebellion in the eastern inland territories suddenly evaporated. By the fall of 1965, Lake Tanganyika was again calm. But the CIA mercenaries (some of them veterans of the Bay of Pigs operation), who had been assisting the Congo government in repressing the revolt, were convinced, as were their agency superiors in Africa, that Che had indeed been in the area. 

Later it was learned by the CIA that Guevara and a group of more than 100 Cuban revolutionaries had infiltrated into the Congo from neighboring Tanzania in the spring of 1965. They intended to set Africa aflame with rebellion, but their revolutionary zeal was not matched by that of the native guerrillas or the local populace. In disgust, six months later Che secretly returned to Cuba to lay plans for his next adventure. At the time, however, the CIA knew only that he had once again disappeared. Again conflicting reports as to his whereabouts and status, health and otherwise, began to drift into the agency. By early 1967, almost a year and a half later, the information available to the agency pointed to the heart of South America, to Bolivia. 

While many of the officers in the CIA's Clandestine Services firmly believed that Guevara was behind the insurgent movement in the southern mountains of Bolivia, a few of the agency's top officials hesitated to accept the fact. Despite the air of doubt, some agency special operations personnel were sent to the landlocked South American country to assist local forces in dealing with the rebel movement. Ironically, at this point not even Bolivian President Rene Barrientos thought that Guevara was involved in the guerrilla movement. 

A couple of months later, in April, two events occurred that dramatically underscored the belief of the CIA's clandestine operators, both in Bolivia and at headquarters, that Che was leading the rebels. Early in the month a Bolivian army unit overran the base camp of the guerrillas at Nancahuazu, capturing documents, diaries, and photographs which the fleeing insurgents had left behind. Included in the materials seized at the guerrilla base camp were photographs of a partially bald, gray-haired man with glasses who, upon close examination of certain features, bore a striking resemblance to Che Guevara. In addition, a couple of smudged fingerprints on some of the documents seemed to match Guevara's. The documents, furthermore, clearly established that a number of the guerrillas operating in Bolivia were Cubans, probably some of the same men who were thought to have been with Guevara in the Congo. 

Ten days later Regis Debray, the leftist French journalist, who had disappeared months earlier upon arriving in Bolivia to do a geopolitical study, was captured near Muyupampa, along with two other foreigners suspected of having been in contact with the rebels. According to his statements months later, the journalist Debray was saved from summary execution by the CIA men accompanying the Bolivian forces who captured him. Afterward he was confronted with secret evidence by these same CIA operatives, disclosing that the agency knew a great deal more about his activities abroad and in Bolivia than he had thought possible. Denying, at first, any knowledge of Guevara's connection with the rebel movement, Debray soon wilted and began to talk in an attempt to save himself from trial and execution. 

Even with the rapidly mounting evidence, Director Richard Helms still could not accept that the legendary Cuban revolutionary had indeed reappeared to lead another rebellion. He scoffed at the claims of his clandestine operatives that they had acquired proof of Guevara's presence in Bolivia; Helms guessed Che was probably dead. Thomas Karamessines, then chief of the CIA's Clandestine Services, who had presented the case to the Director, would not, however, back down from the contention that his operatives were now hot on Guevara's trail, and Helms' attitude seemed to spur the clandestine operators to greater efforts. More agency "advisors," including Cuban veterans of the Bay of Pigs adventure, were soon dispatched to Bolivia to assist in the tracking down of Guevara. A team of experts from the Army's Special Forces was sent to La Paz from the Canal Zone to train Bolivian "rangers" in the art of counterinsurgency operations. 

The Clandestine Services were obsessed with Guevara, and even somewhat fearful of him. He was in part a constant and irritating reminder of their failure in the Cuban operation. Unable to vent their frustrations and anger against those U.S. officials who had undercut that desperate effort, and incapable of gaining direct retribution by destroying Fidel himself or his Soviet and Chinese allies, the CIA's Clandestine Services were left to brood over their failure—until Guevara exposed himself. In so doing he presented himself to the CIA as an inviting target; his capture or death would provide some measure of revenge for past failures.

During the summer of 1967, while the agency's special ops experts were assisting the Bolivian army in hunting down Guevara, information as to his entry into Bolivia became available. It was learned that in November 1966 he had come to La Paz from Havana, via Prague, Frankfurt, and Sao Paolo, traveling on a false Uruguayan passport and disguised as a balding, gray-haired merchant with horn-rimmed spectacles—a far cry from the familiar poster picture. He had been preceded by fifteen Cubans who would assist him in his Bolivian venture. There was no longer any doubt in anyone's mind that Che Guevara was in the country and in charge of the guerrilla movement in the southern mountains. Both President Barrientos and Helms now accepted the fact. The Bolivian government offered a reward ($4,200) for Guevara—dead or alive. It was only a matter of time until Che would be run to ground. 

In the months that followed, the guerrillas suffered defeat after defeat at the hands of the American trained, CIA-advised Bolivian rangers. One battle, on the last day of August, resulted in the death of the mysterious Tania, the lone female in Guevara's rebel band. Although she had posed as a Cuban intelligence agent, a link between the guerrillas and Havana, it was ultimately learned by the CIA that the East German woman was actually a double agent. Her primary employer was the Soviet KGB, which, like the CIA, wanted to keep tabs on Guevara's Cuban-sponsored revolutionary activities in Latin America. Less than six weeks later, on October 8, Guevara himself was wounded and captured near the small mountain village of La Higuera. 

As they had done for Debray earlier, the CIA advisors with the Bolivian army tried to bring Guevara back alive to La Paz for in-depth interrogations. The Bolivian commander, however, was under orders to execute Guevara. All that was to be brought back were the head and hands—incontestable proof that Che had failed in his mission and was dead. 

While the CIA advisors stalled the Bolivian colonel, the agency's station chief in La Paz tried to convince President Barrientos of the long-range advantages of bringing Guevara out of the mountains as a prisoner of the government. Barrientos was adamant. He argued that the Debray affair had caused enough difficulties, and that the arrival of Che Guevara, alive, in the capital might spark disturbances among the students and leftists which his government would not be able to control. In desperation, the station that night appealed to Langley headquarters for assistance, but to no avail. Going on the assumption that neither the station nor headquarters would be successful in getting Barrientos to change his position, the senior CIA operative at La Higuera, (DELETED) attempted to question Che. The revolutionary, however, would not cooperate. He was willing to discuss political philosophies and revolutionary movements in general, but he refused to permit himself to be interrogated about the details of his operation in Bolivia or any of his previous guerrilla activities elsewhere. The CIA would have to settle for the contents of his personal diary, which he had been carrying at the time of his capture. 

Final word came from the capital early the next morning. The prisoner was to be executed on the spot and his body, strapped to the landing gear of a helicopter, was to be flown to Vallegrande for inspection at a local laundry house by a small group of reporters and government officials. Afterward the corpse was to be buried in an unmarked grave outside of town. On hearing the order, (DELETED) the CIA operative, hurried back to the schoolhouse where Guevara was being held, to make one last attempt at interrogating Che. There was not much time left; the execution was to be carried out in the next hour or two. 

Guevara's last moments were recorded in a rare, touching message to headquarters from the CIA operator. The Cuban veteran, and agency contract officer, noted that Guevara was at first still confident of somehow surviving his ordeal, but when he finally realized that he was about to die, his pipe fell from his mouth. Che, however, quickly recovered his composure and asked for some tobacco. His painfully wounded leg no longer seemed to bother him. He accepted his fate with a sigh of resignation, requesting no last favors. (DELETED) clearly felt admiration for the revolutionary and compassion for the man he had helped to capture and thereby condemn. Minutes later Che Guevara was dead. The following summer Che's diary suddenly surfaced and soon found its way into the hands of his comrades in Havana and certain American admirers (Ramparts magazine), who immediately verified its authenticity and published it, much to the chagrin of the CIA and the Bolivian government, which had been releasing only those portions which buttressed their case against Guevara and his rebels. In the midst of the confusion, charges, and countercharges, Antonio Arguedas, Bolivian Minister of the Interior, disappeared in July among rumors that he had been the one who had released the document. Arguedas, as Minister of the Interior, was in charge of the Bolivian intelligence service, with which the agency had many close connections. And Arguedas himself was an agent of the CIA. 

It was quickly learned that Arguedas had escaped to Chile, where he intended to ask for political asylum. Instead, authorities there turned him over to the CIA station, and the agency man who had been his original case officer was dispatched from headquarters in Washington to cool him off. But despite the CIA's counsel, Arguedas spoke out publicly against the agency and its activities in Bolivia. He denounced the Barrientos regime as a tool of American imperialism, criticized the government's handling of the Guevara affair, and then disappeared again, precipitating a major political crisis in Bolivia. 

At various times during the next several months of 1968, Arguedas popped up in London, New York, and Peru. Alternately cajoled and threatened at each stop by CIA operatives who wanted him to shut up, the former minister nevertheless admitted he had been the one who had released Che's diary because, he said, he agreed with the revolutionary's motives of attempting to bring about popular social, political, and economic change in Bolivia and elsewhere in Latin America. And ultimately, much to the horror of the CIA and the Barrientos government, Arguedas announced that he had been an agent of the CIA since 1965 and claimed that certain other Bolivian officials were also in the pay of the secret agency. He described the circumstances under which he had been recruited, charging that the CIA had threatened to reveal his radical student past and ruin his political career if he did not agree to participate in its operations. 

Eventually the CIA was able to strike a bargain with Arguedas, and he voluntarily returned to Bolivia— apparently to stand trial. He told a New York Times reporter on the flight from Lima to La Paz that should anything untoward happen to him, a tape recording detailing his accusations against the CIA and the Barrientos government would be delivered to certain parties in the United States and Cuba. The tape, he said, was being held for him by Lieutenant Mario Teran. Teran, inexplicably, was previously identified as Che Guevara's executioner. 

Arguedas, during his interview, hinted at the magnitude of his potential revelations by disclosing the names of several CIA officers with whom he had worked in the past: Hugo Murray, chief of station; John S. Hilton, former COS; Colonel Ed Fox; Larry Sternfield; and Nick Lendaris. He also identified some of the agency's contract officers who had assisted in the tracking down of Guevara: Julio Gabriel Garcia (Cuban), and Eddie and Mario Gonzales (Bolivians). Arguedas credited the Gonzales brothers' with having saved Debray's life. He now claimed however that Barrientos and even the U.S. ambassador were unaware of the full scope of the CIA penetration of the Bolivian government, undoubtedly a concession to the powers that arranged his save return to La Paz.

The final chapter in the episode was acted out the following summer, almost two years after Che Guevara's death. President Rene Barrientos was killed in a helicopter crash while returning from a visit to the provinces. Six weeks later Antonio Argeudas, the self admitted agent of the CIA who had yet to stand trial for treason and releasing Che Guevara's diary, was shot to death on a street in La Paz. A month later Herberto Rojas, the guide for the Bolivian rangers and their CIA advisors during the final trackdown of Guevara, and one of the few people who possibly knew where the body of the rebel leader, was assassinated in Santa Cruz.

The incriminating tapes Arguedas claimed to have given to Mario Teran for safekeeping have never surfaced.

FIVE: 

Proprietary Organizations 

As far as depots of "untraceable arms," airlines and other installations are concerned, one wonders how the CIA could accomplish the tasks required of it in Southeast Asia without such facilities. 

—LYMAN KIRKPATRICK 

Former CIA Executive Director 

U.S. News and World Report 

October 11, 1971 

LATE one windy spring afternoon in 1971 a small group of men gathered unobtrusively in a plush suite at Washington's Mayflower Hotel. The host for the meeting was Professor Harry Howe Ransom of Vanderbilt University, author of The Intelligence Establishment, a respected academic study of the U.S. intelligence system. He was then doing research for another book on the subject and had invited the others for drinks and dinner, hoping to gather some new material from his guests, who included ex-CIA officials, congressional aides, and David Wise, coauthor of The Invisible Government and The Espionage Establishment, two of the best books on the CIA and clandestine intelligence operations ever published. Someone brought up the CIA's use of front companies. "Oh, you mean the Delaware corporations," said Robert Amory, Jr., a former Deputy Director of the CIA. "Well, if the agency wants to do something in Angola, it needs the Delaware corporations." 

By "Delaware corporations" Amory was referring to what are more commonly known in the agency as "proprietary corporations" or, simply, "proprietaries." These are ostensibly private institutions and businesses which are in fact financed and controlled by the CIA. From behind their commercial and sometimes nonprofit covers, the agency is able to carry out a multitude of clandestine activities—usually covert action operations. Many of the firms are legally incorporated in Delaware because of that state's lenient regulation of corporations, but the CIA has not hesitated to use other states when it found them more convenient. The CIA's best-known proprietaries were Radio Free Europe (RFE) and Radio Liberty (RL), both established in the early 1950s. 

The corporate structures of these two stations served as something of a prototype for other agency proprietaries. Each functioned under the cover provided by a board of directors made up of prominent Americans, who in the case of RFE incorporated as the National Committee for a Free Europe and in the case of RL as the American Committee for Liberation. But CIA officers in the key management positions at the stations made all the important decisions regarding the programming and operations of the stations. 

In 1960 when the agency was preparing for the Bay of Pigs invasion and other paramilitary attacks against Castro's Cuba, it set up a radio station on desolate Swan Island in the Caribbean to broadcast propaganda to the Cuban people. Radio Swan, as it was called, was operated by a New York company with a Miami address, the Gibraltar Steamship Corporation. Again the CIA had found a group of distinguished people—as usual, corporate leaders with government ties—to front for its clandestine activities. Gibraltar's president was Thomas D. Cabot, who had once been president of the United Fruit Company and who had held a high position in the State Department during the Truman administration. Another "stockholder" was Sumner Smith, also of Boston, who claimed (as did the Honduran government) that his family owned Swan Island and who was president of the Abington Textile and Machinery Works. 

During the Bay of Pigs operation the following year, Radio Swan ceased its normal fare of propaganda broadcasts and issued military commands to the invading forces and to anti-Castro guerrillas inside Cuba. What little cover Radio Swan might have had as a "private" corporation was thus swept away. Ultimately, Radio Swan changed its name to Radio Americas (although still broadcasting from Swan Island), and the Gibraltar Steamship Corporation became the Vanguard Service Corporation (but with the same Miami address and telephone number as Gibraltar). The corporation, however, remained a CIA proprietary until its dissolution in the late 1960s. 

At least one other agency proprietary, the Double- Chek Corporation, figured in the CIA's operations against Cuba. Double-Chek was founded in Miami (which abounds with agency proprietaries) in 1959, and, according to the records of the Florida state government, "brokerage is the general nature of the business engaged in." In truth, Double-Chek was used by the agency to provide air support to Cuban exile groups, and it was Double-Chek that recruited the four American pilots who were killed during the Bay of Pigs invasion. Afterward the CIA, through Double-Chek, paid pensions to the dead fliers' widows and warned them to maintain silence about their husbands' former activities. When the CIA intervened in 1964, Cuban exile pilots—some of whom were veterans of the Bay of Pigs—flew B-26 bombers against the rebels. These pilots were hired by a company called Caramar (Caribbean Marine Aero Corporation), another CIA proprietary. 

Often the weapons and other military equipment for an operation such as that in the Congo are provided by a "private" arms dealer. The largest such dealer in the United States is the International Armament Corporation, or Interarmco, which has its main office and some warehouses on the waterfront in Alexandria, Virginia. Advertising that it specializes in arms for law enforcement agencies, the corporation has outlets in Manchester in England, Monte Carlo, Singapore, Pretoria, South Africa, and in several Latin American cities. Interarmco was founded in 1953 by Samuel Cummings, a CIA officer during the Korean War. The circumstances surrounding Interarmco's earlier years are murky, but CIA funds and support undoubtedly were available to it at the beginning. Although Interarmco is now a truly private corporation, it still maintains close ties with the agency. And while the CIA will on occasion buy arms for specific operations, it generally prefers to stockpile military materiel in advance. For this reason, it maintains several storage facilities in the United States and abroad for untraceable or "sterile" weapons, which are always available for immediate use. Interarmco and similar dealers are the CIA's second most important source, after the Pentagon, of military materiel for paramilitary activities. 

The Air Proprietaries 
Direct CIA ownership of Radio Free Europe, Radio Liberty, and the Bay of Pigs proprietaries, and direct involvement in Interarmco are largely past history now. Nevertheless, the agency is still very much involved in the proprietary business, especially to support its paramilitary operations. CIA mercenaries or CIA-supported foreign troops need air support to fight their "secret" wars, and it was for just this purpose that the agency built a huge network of clandestine airlines which are far and away the largest and the most dangerous of all the CIA proprietaries. Incredible as it may seem, the CIA is currently the owner of one of the biggest—if not the biggest—fleets of "commercial" airplanes in the world. Agency proprietaries include Air America, Air Asia, Civil Air Transport, Intermountain Aviation, Southern Air Transport, (DELETED) and several other air charter companies around the world. 

Civil Air Transport (CAT), the original link in the CIA air empire, was started in China in 1946, one year before the agency itself was established by Congress. CAT was an offshoot of General Claire Chennault's Flying Tigers, and during its early days it flew missions of every kind in support of Chiang Kai-shek's unsuccessful effort to retain control of the Chinese mainland. When Chiang was finally driven out of China in 1949, CAT went with him to Taiwan and continued its clandestine air operations. In 1950 CAT was reorganized as a Delaware corporation under a CIA proprietary holding company called the Pacific Corporation. In a top-secret memorandum to General Maxwell Taylor on "unconventional-warfare resources in Southeast Asia" in 1961, published in The Pentagon Papers, Brigadier General Edward Lansdale described CAT's functions as follows: 

CAT is a commercial airline engaged in scheduled and non-scheduled air operations throughout the Far East, with headquarters and large maintenance facilities located in Taiwan. CAT, a CIA proprietary, provides air logistical support under commercial cover to most CIA and other U.S. Government agencies' requirements. 

CAT supports covert and clandestine air operations by providing trained and experienced personnel, procurement of supplies and equipment through overt commercial channels, and the maintenance of a fairly large inventory of transport and other type aircraft under both Chinat [Chinese Nationalist] and U.S. registry. CAT has demonstrated its capability on numerous occasions to meet all types of contingency or long-term covert air requirements in support of U.S. objectives. 

During the past ten years, it has had some notable achievements, including support of the Chinese Nationalist withdrawal from the mainland, air drop support to the French at Dien Bien Phu, complete logistical and tactical air support for the Indonesian operation, air lifts of refugees from North Vietnam, more than 200 overflights of Mainland China and Tibet, and extensive air support in Laos during the current crisis.... 

The air drops at Dien Bien Phu occurred in 1954 when the U.S. government decided not to come directly to the assistance of the beleaguered French force but did approve covert military support. 1954 was also the year of the airlift of refugees from North Vietnam to the South. These were non-secret missions, but the CIA could not resist loading the otherwise empty planes that flew to North Vietnam with a cargo of secret agents and military equipment to be used in a clandestine network then being organized in North Vietnam. Like other guerrilla operations against communist countries, whether in Europe or Asia, this CIA venture was a failure. 

By "the Indonesian operation," Lansdale was referring to the covert air and other military support the CIA provided to the rebels of the Sukarno government in 1958.[1] The "more than 200 overflights of Mainland China and Tibet" that Lansdale mentioned occurred mainly during the 1950s (but continued well into the 1960s), when the CIA supported, on its own and in cooperation with the Chiang Kai-shek government, guerrilla operations against China. CAT was the air supply arm for these operations, and it was in a CAT plane that Richard Fecteau and John Downey were shot down by the communist Chinese in 1954. 

By the end of the 1950s, CAT had split into three separate airlines, all controlled by a CIA proprietary holding company, the Pacific Corporation. One firm, Air America, took over most of CAT's Southeast Asia business; another, Air Asia, operated a giant maintenance facility on Taiwan. The portion still called CAT continued to fly open and covert charter missions out of Taiwan and to operate Nationalist China's scheduled domestic and international airline. CAT was best known for the extravagant service on its "Mandarin Jet," which linked Taipei to neighboring Asian capitals.

In 1964, about the time of the mysterious crash of a CAT plane,[2] the CIA decided that running Taiwan's air passenger service contributed little to the agency's covert mission in Asia, and that the non-charter portion of CAT should be turned over to the Chinese Nationalists. But the Nationalists' own China Air Lines had neither the equipment nor the experience at that time to take over CAT's routes, and the Nationalist government was not prepared to allow the CIA to abandon Taiwan's principal air links with the outside world. The CIA could not simply discontinue service, because such action would have offended the Chiang government and made uncertain the continued presence of the agency's other proprietaries and intelligence facilities on Taiwan. 

The negotiations over CAT's passenger routes dragged on through the next four years. The CIA was so eager to reach a settlement that it sent a special emissary to Taiwan on temporary duty, but his short-term negotiating assignment eventually turned into a permanent position. Finally, in 1968 another CAT passenger plane—this time a Boeing 727—crashed near the Taipei airport. This second accident caused twenty-one deaths and provided that rarest of occurrences on Taiwan, a spontaneous public demonstration—against U.S. involvement in the airline. 

Bowing to public pressure, the Nationalist government then accepted a settlement with the agency: China Air Lines took over CAT's international flights; CAT, despite the agency's reluctance, continued to fly domestic routes on Taiwan; and the CIA sweetened the pot with a large cash payment to the Nationalists. Air America, a spin-off of CAT, was set up in the late 1950s to accommodate the agency's rapidly growing number of operations in Southeast Asia. As U.S. involvement deepened in that part of the world, other government agencies—the State Department, the Agency for International Development (AID), and the United States Information Agency (USIA)—also turned to Air America to transport their people and supplies. By 1971, AID alone had paid Air America more than $83 million for charter services. In fact, Air America was able to generate so much business in Southeast Asia that eventually other American airlines took note of the profits to be made. 

One private company, Continental Airlines, made a successful move in the mid-1960s to take some of the market away from Air America. Pierre Salinger, who became an officer of Continental after his years as President Kennedy's press secretary, led Continental's fight to gain its share of the lucrative Southeast Asian business. The Continental position was that it was a questionable, if not illegal, practice for a government owned business (even a CIA proprietary under cover) to compete with truly private companies in seeking government contracts. 

The CIA officers who had to deal with Continental were very uncomfortable. They knew that Salinger had learned during his White House days of the agency's activities in Southeast Asia and, specifically, of Air America's tie to the CIA. They feared that implicit in Continental's approach for a share of the Southeast Asian market was the threat that if the agency refused to cooperate, Continental would make its case publicly—using information supplied by Salinger. Rather than face the possibility of unwanted publicity, the CIA permitted Continental to move into Laos, where since the late 1960s it has flown charter flights worth millions of dollars annually. And Continental's best customer is the CIA itself. 

But even with Continental flying in Laos, the agency was able to keep most of the flights for its own Air America. This CIA airline has done everything from parachuting Meo tribesmen behind North Vietnamese lines in Laos to dropping rice to refugees in the Vietnamese highlands. Air America has trained pilots for the Thai national police, transported political prisoners for the South Vietnamese government, carried paymasters and payrolls for CIA mercenaries, and, even before the Tonkin Gulf Resolution, furnished pilots for secret bombing raids on North Vietnamese supply lines in Laos. It has also been accused of participating in Southeast Asia's heroin trade. 

Air America's operations regularly cross national boundaries in Southeast Asia, and its flights are almost never inspected by customs authorities. It has its own separate passenger and freight terminals at airports in South Vietnam, Laos, and Thailand. At Udorn, in Thailand, Air America maintains a large base which is hidden within an even larger U.S. Air Force facility (which is ostensibly under Thai government control). The Udorn base is used to support virtually all of the "secret" war in Laos, and it also houses a "secret" maintenance facility for the planes of the Thai, Cambodian, and Laotian air forces. Before the ceasefire in Vietnam, Air America was flying 125 planes of its own, with roughly 40 more on lease, and it had about 5,000 employees, roughly 10 percent of whom were pilots. It was one of America's largest airlines, ranking just behind National in total number of planes. 

Now that the U.S. military forces have withdrawn from the Vietnamese theater, the role of maintaining a significant American influence has reverted largely to the CIA—and Air America, under the circumstances, is finding its services even more in demand than previously. Even the International Supervisory and Control Commission, despite the membership of communist Poland and Hungary, has signed a contract with the CIA proprietary to support its supervision of the Vietnam ceasefire. In 1973, Air America had contracts with the Defense Department worth $41.4 million. 

A wholly owned subsidiary of Air America, Air Asia, operates on Taiwan the largest air repair and maintenance facility in the Pacific region. Established in 1955, Air Asia employs about 8,000 people. It not only services the CIA's own planes, it also repairs private and military aircraft. The U.S. Air Force makes heavy use of Air Asia and consequently has not had to build a major maintenance facility of its own in East Asia, as would have been necessary if the CIA proprietary had not been available. Like Air America, Air Asia is a self-sustaining, profit-making enterprise. 

Until the CIA decided to sell it off in mid-1973, Southern Air Transport, another agency proprietary, operated out of offices in Miami and Taiwan. Unlike CAT, Air America, and Air Asia, it was not officially connected with the Pacific Corporation holding company, but Pacific did guarantee $6.6 million loaned to it by private banks, and Air America loaned it an additional $6.7 million funneled through yet another CIA proprietary called Actus Technology. Southern's role in the Far East was largely limited to flying profitable routes for the Defense Department. Other U.S. government agencies have also chartered Southern on occasion. In the first half of 1972 it received a $2 million AID contract to fly relief supplies to the new state of Bangladesh. 

But within the CIA, Southern Air Transport was primarily important as the agency's air arm for potential Latin American interventions. This was the justification when the CIA took control of it in 1960, and it provided the agency with a readily available "air force" to support counterinsurgency efforts or to help bring down an unfriendly government. While Southern awaited its call to be the Air America of future Latin American guerrilla wars, it "lived its cover" and cut down CIA's costs by hiring out its planes on charter. A particularly mysterious air proprietary is known within the agency as intermountain Aviation. 

Its public dealings are through firms called Aero Associates and Hamilton Aircraft. Intermountain specializes in charter flights, airplane repair, reconditioning of old military planes, and the shipment of these planes overseas. It is located on a large private airfield near Tucson, Arizona, which looks much like an air force base: housing is provided for senior personnel; there is an impressive officers' club, a swimming pool, and other sports facilities--all purchased and maintained at the CIA's expense. (One senior agency official often speculated that the two most pleasant assignments he could think of to finish his career in luxury were to be chief of station in Johannesburg, South Africa, and director of Intermountain Aviation.) 

Intermountain was founded by the agency in the 1950s primarily for the maintenance of CIA aircraft, but it soon became a parking and storage facility for planes from other agency proprietaries. Additionally, the agency used it for the training of both American and foreign mercenaries. When the CIA brought Tibetan tribesmen to the United States in the late 1950s to prepare them for guerrilla forays into China, the agency's Intermountain Aviation assisted in the training program. 

Then, in the early 1960s CIA air operations grew by leaps and bounds with the expansion of the wars in Southeast Asia and the constant fighting in the Congo. Intermountain rapidly expanded its operations to the point where its cover as a commercial air charter and repair company became difficult to maintain. If nothing else, its parachute towers looked suspicious to the casual viewer. The problem of cover was partially solved, however, when Intermountain landed a Department of the Interior contract to train smoke jumpers for forest fire control. But a reporter visiting Tucson in 1966 still wrote, "Anyone driving by could see more than a hundred B-26s with their armor plate, bomb bays, and gun ports." Not long after this disclosure appeared in the press, CIA funds were made available to Intermountain to build hangars for the parked aircraft. Prying reporters and the curious public soon saw less. In 1965, Intermountain Aviation served as a conduit in the sale of B-26 bombers to Portugal for use in that country's colonial wars in Africa. The sale directly violated the official United States policy against arms exports to Portugal for use in Angola, Mozambique, or Portuguese Guinea. 

The U.S. government, at its highest level, had decided to sell twenty B-26s to Portugal, and the CIA proprietary was following official orders. Theoretically, the embargo on weapons exports for use in Portugal's colonies remained intact—but not in fact. The U.S. government was, thus, doing covertly what it had forbidden itself to do openly. Through the spring and summer of 1965, seven B-26s were flown from Arizona to Lisbon by an English pilot hired by an ostensibly private firm called Aero Associates. By September the operation's cover had worn so thin that Soviet and Hungarian representatives at the United Nations specifically attacked the transaction. The American U.N. delegation conceded that seven B-26s had been delivered to Portugal, but Ambassador Arthur Goldberg stated that "the only involvement of officials of the United States has been in prosecuting a malefactor against the laws of the country." This was a simple mistruth. Ambassador Goldberg, however, may have not known what the facts were. Adlai Stevenson before him had not been fully briefed on the Bay of Pigs invasion and wound up unknowingly making false statements at the U.N. 

The same techniques were used to distort the prosecution of the "malefactor." Ramsey Clark, at the time Deputy Attorney General, got in contact with Richard Helms, when the latter was the CIA's Deputy Director, and the agency's General Counsel, Lawrence Houston, to discuss the Portuguese airplane matter. Agency officials assured Clark that the CIA had not been involved. Recalling the case, Clark says, "We couldn't have gone to trial if they [the CIA] had been involved. I don't see how you can just prosecute the little guys acting in the employ of a government agency." 

Still, the United States had been exposed as violating its own official policy, and, for political reasons, those knowledgeable about the facts refused to intervene to aid "the little guys." Thus, one agency of the government, the Justice Department, unwittingly found itself in the curious position of prosecuting persons who had been working under the direct orders of another government agency, the CIA. Five indictments were finally secured, but one of the accused fled the country, and charges against two of the others were dropped. But in the fall of 1966 the English pilot, John Richard Hawke, and Henri Marie Francois de Marin de Montmarin, a Frenchman who had been a middleman in the deal, were brought to trial in a Buffalo, New York, federal court. Hawke admitted in court, "Yes, I flew B-26 bombers to Portugal for use in their African colonies, and the operation was arranged through the State Department and the CIA." 

However, CIA General Counsel Houston flatly denied under oath that the agency had been involved in the transaction. Houston did reveal that the agency "knew about" the bomber shipment on May 25, 1965, five days before it began, and that this information had been passed on to the State Department and eleven other government agencies. He also said that on July 7 the CIA was "informed" that four of the B-26s had actually been delivered to Portugal; again the CIA gave notice to State and other agencies. He did not explain why, if the U.S. government had so much intelligence on the flights, nothing was done to stop them, although their flight plans had been filed with the Federal Aviation Administration and Hawke, on one mission, even inadvertently buzzed the White House. 

The jury found Hawke and Montmarin innocent. Members of the panel later let it be known that they had not been convinced that the two accused had deliberately violated the law.... 

Prior to the appointment of John McCone as the Agency's Director in 1962, ... main aircraft was ... McCone had been used to much more luxurious transport in his previous career as a corporation president, and the first time he saw ..., he delivered an angry tirade about the need for finding a plane more suitable to his position. The Agency's Support Directorate promptly bought ... outfitted in plush executive style. McCone made extensive use of ... plane, but he also allowed other senior CIA officers to use it for official business.[3] [Sorry this file appears jumbled here DC]

Former Director Helms, however, refused to fly (DELETED) because he believed that its commercial cover was too transparent. He preferred instead to travel on legitimate commercial airlines. Less reluctant was Vice President Hubert Humphrey, who often used (DELETED) Gulfstream during his 1968 presidential campaign. CIA's air empire ... There have been at least two CIA proprietaries ... One, ... When not serving the Agency, this proprietary "lived its cover" ... The other ... proprietary was ... awaiting orders from the Agency. 

Perhaps the CIA's most out-of-the-way proprietary was located in Kathmandu, Nepal. It was established to provide air support for agency-financed and -directed tribesmen who were operating in Chinese-controlled Tibet. CAT originally flew these missions, as indicated by General Lansdale's reference to CAT's "more than 200 overflights of Mainland China and Tibet." But flying planes from Taiwan to the CIA's operational base in northeastern India proved too cumbersome; thus the Nepalese proprietary was set up. As the Tibetan operations were cut back and eventually halted during the 1960s, this airline was reduced in size to a few planes, helicopters, and a supply of spare parts. Still, up to the late 1960s, it flew charters for the Nepalese government and private organizations in the area. 

The CIA's Planning, Programming, and Budgeting Staff back in Langley believed that the airline's usefulness as an agency asset had passed, and the decision was made to sell it off. But, for the CIA to sell a proprietary is a very difficult process. The agency feels that it must maintain the secrecy of its covert involvement, no matter how moot or insignificant the secrecy, and it does not want to be identified in any way, either before or after the actual transaction. Moreover, there is a real fear within the Clandestine Services that a profit will be made, and then by law, the CIA would be obliged to return the gain to the U.S. Treasury. The clandestine operatives do not want to be troubled by the bureaucratic red tape this would entail. It simply goes against the grain of the clandestine mentality to have to explain and justify such a transaction to anyone—let alone to the bookkeepers at the Treasury.

Unloading Southern Air Transport in 1973 proved to be something of a fiasco for the agency. Following past practice, the CIA tried to sell it quietly to a former employee—presumably at an attractive price—but the effort failed when three legitimate airlines protested to the Civil Aeronautics Board. They complained that Southern had been built up with government money, that it had consequently received lucrative charter routes, and that it represented unfair competition. When word of this prospective sale got into the newspapers, the CIA backtracked and voluntarily dropped Southern's CAB certification—greatly reducing the airline's value but guaranteeing that the agency could sell it off in complete secrecy. 

And with the Nepalese airline, CIA found a buyer who had previously worked for other agency air proprietaries. Since he was a former "company man," secrecy was preserved. He was allowed to purchase the airlines for a small down payment. Following highly unorthodox business procedure, the airline itself served as collateral for the balance due. A CIA auditor at headquarters privately described the sale as a "giveaway," but this was the way the Clandestine Services wanted the affair handled. The new owner remained in Miami although all his airlines' operations were in Nepal. Within a comparatively short period of time, he liquidated all the airline's assets. He wound up with a considerable profit, but the agency made back only a fraction of its original costs. The Clandestine Services was pleased with the sale, in any case, because it had been able to divest itself of a useless asset in a way both to guarantee maximum security and to assure the future loyalty and availability of the buyer. 

A somewhat similar sale of a proprietary occurred ... when CIA decided to get rid of a ... had become increasingly less valuable to the Agency, and its annual cost ... could no longer be justified. But the key employees ... were eager to preserve their jobs and resisted the sale. It was feared at headquarters that one or more of these people might make public CIA's relationship ... if an amicable settlement were not worked out. The Agency took the problem to ... would buy ... CIA agreed, and the ... was sold ... in what was described in some circles of the Agency as a "sweetheart deal." 

While the ethics of transactions of this sort are questionable, conflict of interest laws presumably do not apply to the CIA; the Central Intelligence Agency Act of 1949 conveniently states that "The sums made available to the Agency may be expended without regard to the provisions of law and regulations relating to the expenditure of Government funds." In any case, the use of proprietary companies opens up to the participants an opportunity to make substantial profits while "living their cover." 

The fact remains that CIA proprietaries are worth hundreds of millions of dollars, and no one outside the agency is able to audit their books. And, as will be seen later in this chapter, CIA headquarters sometimes has only the vaguest notion about what certain proprietaries are doing or what their assets are. Undoubtedly, there are wide opportunities for abuse, and many of the people involved in fields such as the arms trade, paramilitary soldiering, and covert air operations are not known for high ethical standards. While only a few agency career employees would take money for personal gain, there is little to prevent officers of the proprietaries from doing so, if they are so inclined. 

As can be seen, the CIA's proprietary corporations serve largely in support of special, or paramilitary, operations. Some, of course, were established for propaganda and disinformation purposes and, like most other covert assets, proprietaries can also be used on occasion to further the espionage and counterespionage efforts of the Clandestine Services. In the main, however, there has been a definite trend in the agency for more than a decade to develop the air proprietaries as the tactical arm for the CIA's secret military interventions in the Third World. The fleets of these CIA airlines have been continually expanded and modernized, as have been their base facilities. In the opinion of most CIA professionals, the agency's capabilities to conduct special operations would be virtually nonexistent without the logistical and other support provided by the air proprietaries. 

The performance of the Pacific Corporation and its subsidiaries, Air America and Air Asia, in assisting the CIA's many special ops adventures over the years in the Far East and Southeast Asia has deeply impressed the agency's leadership. The exploits of the contract air officers in that strife-ridden corner of the world have become almost legendary within the CIA. Furthermore, the advantages of having a self sustaining, self-run complex which requires no CIA funds and little agency manpower are indeed much appreciated by the Clandestine Services. 

Without the air proprietaries, there could have been no secret raids into Communist China. There could have been no Tibetan or Indonesian or Burmese operations. And, most important of all, there could have been no "secret" war in Laos. Even many of the CIA's covert activities in Vietnam could not have been planned, much less implemented, without the assurance that CIA airlines were available to support such operations. Thus, it is small wonder that the agency, when it moved to intervene in the Congo (and anticipating numerous other insurgencies on the continent), hastily tried to develop the same kind of air support there that traditionally was available to special operations in Asia. And one can easily understand why the planners of the Bay of Pigs operation now regret not having made similar arrangements for their own air needs instead of relying on the U.S. armed forces. 

The Fabulous George Doole 
Although the boards of directors of the air proprietaries are studded with the names of eminently respectable business leaders and financiers, several of the companies' operations were actually long in the hands of one rather singular man, George Doole, Jr. Until his retirement in 1971, Doole's official titles were president of the Pacific Corporation and chief executive officer of Air America and Air Asia; it was under his leadership that the CIA air proprietaries blossomed. 

Doole was known to his colleagues in the agency as a superb businessman. He had a talent for expanding his airlines and for making them, functionally if not formally, into profit-making concerns. In fact, his proprietaries proved something of an embarrassment to the agency because of their profitability. While revenues never quite covered all the costs to the CIA of the original capital investment, the huge contracts with U.S. government agencies resulting from the war in Indochina made the Pacific Corporation's holdings (CAT, Air America, and Air Asia) largely self sufficient during the 1960s. 

Consequently, the CIA was largely spared having to pay in any new money for specific projects. Some of the agency's top officials, such as the former Executive Director-Comptroller and the chief of Planning, Programming, and Budgeting, felt uncomfortable with the booming business Doole managed, but they did nothing to change it. The Executive Director once privately explained the inaction: "There are things here better left undisturbed. The point is that George Doole and CAT provide the agency with a great number of services, and the agency doesn't have to pay for them." Among the other services he provided was his ability as a straight-faced liar: asked by the New York Times in 1970 whether his airlines had any connection with the CIA, Doole said: "If 'someone out there' is behind all this, we don't know about it." At that time Doole had been working for the CIA for seventeen years, and for most of those years had held a CIA "supergrade" position. 

Doole's empire was formally placed under the CIA's Directorate of Support on the agency's organization chart, although many of its operations were supervised by the Clandestine Services. But so little was known inside CIA headquarters about the air proprietaries which employed almost as many people as the agency itself (18,000) that in 1965 a CIA officer with extensive Clandestine Service experience was assigned to make a study of their operations for the agency's top officials. 

This officer spent the better part of a year trying to assemble the relevant data, and he became increasingly frustrated as he proceeded. He found that the various proprietaries were constantly trading, leasing, and selling aircraft to each other;[4] that the tail numbers of many of the planes were regularly changed; and that the mixture of profit-making and covert flight made accounting almost impossible. He finally put up a huge map of the world in a secure agency conference room and used flags and pins to try to designate what proprietaries were operating with what equipment in what countries. This officer later compared his experience to trying to assemble a military order of battle, and his estimate was that his map was at best 90 percent accurate at any given time. Finally, Helms, then Deputy Director, was invited in to see the map and be briefed on the complexity of the airlines. A witness described Helms as being "aghast." 

That same year the Executive Committee for Air (Ex Comm Air) was formed in order to keep abreast of the various air proprietaries. Lawrence Houston, the agency's General Counsel, was appointed chairman, and representatives were appointed from the Clandestine Services, the Support Directorate, and the agency's executive suite. But the proceedings were considered so secret that Ex Comm Air's executive secretary was told not to keep minutes or even notes. 

In 1968, Ex Comm Air met to deal with a request from George Doole for several million dollars to "modernize" Southern Air Transport. Doole's justification for the money was that every major airline in the world was using jets, and that Southern needed to follow suit if it were to continue to "live its cover." Additionally, Doole said that Southern should have equipment as effective as possible in the event the agency had to call on it for future contingencies in Latin America. 

Previous to Doole's request, the agency's Board of National Estimates had prepared a long-range assessment of events in Latin America. This estimate had been approved by the Director and sent to the President as the official analysis of the intelligence community. The conclusions were generally that political, economic, and social conditions in Latin America had so deteriorated that a long period of instability was at hand; that existing American policy was feeding this instability; and that there was little the United States could do, outside of providing straight economic and humanitarian assistance, to improve the situation. The estimate strongly implied that continued open U.S. intervention in the internal affairs of Latin American nations would only make matters worse and further damage the American image in that region.[5] 

At the meeting on Southern Air Transport's modernization request, Doole was asked if he thought expanding Southern's capabilities for future interventions in Latin America conformed with the conclusions of the estimate. Doole remained silent, but a Clandestine Services officer working in paramilitary affairs replied that the estimate might well have been a correct appraisal of the Latin American situation and that the White House might accept it as fact, but that non-intervention would not necessarily become official American policy. The Clandestine Services man pointed out that over the years there had been other developments in Latin America—in countries such as Guatemala and the Dominican Republic—where the agency had been called on by the White House to take action against existing political trends; that the CIA's Director had a responsibility to prepare estimates for the White House as accurately as possible; but that the Director (and the Clandestine Services and Doole) also had a responsibility to be ready for the worst possible contingencies. 

In working to strengthen Southern Air Transport and his other proprietaries, Doole and the Clandestine Services were following one of the basic maxims of covert action: Build assets now for future contingencies. It proved to be persuasive strategy, as the Director personally approved Doole's request and Southern received its several million dollars for jets.[6] 

The meeting ended inconclusively. Afterward the CIA officer who had been questioning Doole and the Clandestine Services man was told that he had picked the wrong time to make a stand. So if the U.S. government decides to intervene covertly in the internal affairs of a Latin American country—or elsewhere, for that matter—Doole's planes will be available to support the operation. These CIA airlines stand ready to drop their legitimate charter business quietly and assume the role they were established for: the transport of arms and mercenaries for the agency's "special operations." The guns will come from the CIA's own stockpiles and from the warehouses of Interarmco and other international arms dealers. The mercenaries will be furnished by the agency's Special Operations Division, and, like the air proprietaries, their connection with the agency will be "plausibly deniable" to the American public and the rest of the world.

Doole and his colleagues in the Clandestine Services have worked hard over the years to build up the airlines and the other assets for paramilitary action. Their successors will fight hard to retain this capability, both because they want to preserve their own secret empire and because they believe in the rightness of CIA clandestine  intervention in other countries internal affairs. They know all to well that if the CIA never intervened, there would be little justification for their existence. 

notes Chapter 5
p299-301 here
http://cryptocomb.org/wp-content/uploads/2015/07/The-CIA-and-the-Cult-of-Intelligence.pdf
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Propaganda and Disinformation

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