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How the CIA overthrew the United States of America

I'm totally baffled by how many things Americans don't understand. I was talking to someone and they asked me what the whole "Bay of Pigs" thing was about.

The Bay of Pigs, wow, what a mind fuck. People have come up with various ways to understand what exactly happened to this country. How'd we go from being Superman to the Super Villain? I've had to grow up in a country that's been torturing people all over the world. From Nam to El Salvador to Guatemala to Bosnia to Iraq, Afghanistan and 50 other countries where we render them to be tortured.

Some folks have come up with some real colorful ways to understand this, like the illuminati, the free masons, but it was just another CIA coup. The CIA over threw the United States of America and set up their own puppet government in Washington DC and they have been running the show ever since.

Where to begin, let's start with the Cuban missile crisis. No one understands why the Russians wanted to put nukes in Cuba and aim them at Washington DC, because no one in America knows that right before that happened we pushed Turkey into NATO and put nukes in Turkey and pointed them right at Moscow.

Something similar to what we are doing in the Ukraine right now. Turn the tables around for a second and imagine if Russia had supported protesters in say Mexico city and they overthrew the government there. And just like the Vice Prez (Joe Biden) and his son showed up welcoming the new government, promising to make them a part of NATO and jam our nukes right up Russia's ass, parking them on Russia's door steps.

Just say-in, Americans would freak if Russia turned Mexico into a puppet government of Moscow's and started talking about arming them with nukes. I don't think that I'm exaggerating when I say most people in this country would crap themselves if that were to happen. But that's exactly what we are doing.

But more importantly, how did we come to this point? How did the CIA overthrow the US and get away with it? Can you prove it? And if it is true, what the hell are we suppose to do about it?

The proof is all around us, we live in it. But I'm going to provide enough evidence for a jury to reach a decision and then provide us a way out. A way that individual Americans can take America back from the fascist CIA who are currently in control of all three branches of our government.

MAFIA BUYS THE WHITE HOUSE AND THE CIA STAGES A COUP

At the start of the 1920s, marijuana use in America was concentrated in New Orleans and its intoxicating vapors were mainly inhaled by migrant workers from Mexico, by blacks, and by a growing number of "low-class" whites. Sailors and immigrants from the Caribbean brought this "new" (Its known uses go back to 7,000 B.C.) drug into major southern U.S. ports – above all into the Crescent City.

Along with jazz, pot traveled north to Chicago, and then east to Harlem – where it soon became an indispensable part of the music scene, even entering the language of the black hits of the day (Louis Armstrong's "Muggles," Cab Calloway's "That Funny Reefer Man" and Fats Waller's "Viper's Drag").

A squat, muscular fireplug of a man, rising New Orleans mobster Carlos Marcello was perfectly placed to make boatloads of money from illegal marijuana shipped into his territory. In 1938, though, Marcello sold 23 pounds of pot to an undercover agent.

Convicted and sentenced to one year in the Atlanta Federal Penitentiary, Marcello was also fined more than $75,000. Using his political influence, that particular "Reefer Man" was able to get the fine reduced to just $400 - and he was out of prison in nine months. With Louisiana Mafia boss Sam Carolla pulling the strings, Gov. O.K. Allen – a former stooge of assassinated Sen. Huey Long – provided the leniency.

Marcello's first dealings with Vice President Dick Nixon involved Jimmy Hoffa, the mobbed-up Teamsters Union leader. Because Jimmy shared a common enemy with Nixon, Hoffa and his two million-member union backed Nixon against Sen. John Kennedy in the 1960 presidential election. A Louisiana Teamster official who later became a government informant has revealed that Hoffa met with Marcello to secretly fund the Nixon campaign with stacks of cold Mob cash. Edward Partin told Mob expert Dan Moldea, “I was right there, listening to the conversation. Marcello had a suitcase filled with $500,000 cash which was going to Nixon ... (Another $500,000 contribution) was coming from Mob boys in New Jersey and Florida.'” Hoffa himself served as Nixon's bagman. Within a few weeks of that payoff, Vice President Nixon managed to stop a Florida land fraud indictment against Hoffa.

The Hoffa-Marcello meeting took place in New Orleans on September 26, 1960, and has been verified by William Sullivan, a former top FBI official.

Sen. John Kennedy edged out Vice President Nixon in the 1960 presidential election, and Hoffa – thanks to Atty. Gen. Robert Kennedy – was soon sitting in a prison cell for jury tampering and looting his own union's pension funds of nearly $2 million. Yet the Nixon-Hoffa link remained solid, at least until December 23, 1971, when, as president, Nixon gave Jimmy an executive grant of clemency and opened the prison's gates for him. Hoffa served only five years of a 13-year sentence.

In 1961, Marcello was "deported" to Guatemala by Atty. Gen. Bobby Kennedy but the Louisiana godfather quietly returned in a small plane piloted by an associate named David Ferrie – later considered a prime JFK assassination suspect by New Orleans District Attorney, Jim Garrison.

In 1967, just as Garrison prepared to indict him, Ferrie was found dead in his apartment. He was lying on a sofa with a sheet pulled over his head. Two typed "suicide" notes were found. Ferrie's name was typed, not signed, on each note.

New Orleans was a hotbed of illegal, covert paramilitary operations where corruption, disguise and deception had produced an intelligence cottage industry. In the 1960s, it was the city where the Mafia, anti-Castro exiles and self-styled intelligence spooks joined hands to celebrate what they called their patriotic bonds and to condemn their common enemies - Castro, Communists, Liberals.

It is now known that Ruby was not only a police-protected pot dealer – but also a government informant. In 1947, he was a secret Syndicate source for a young congressman from California named Richard Nixon. In 1950, he covertly cooperated with a Senate committee probing organized crime. In 1956 – according to newly released memos – the FBI fingered him as a liaison between the Dallas police department and local drug dealers.

Identified by the Warren Commission as the lone killer of President Kennedy, Lee Harvey Oswald had his own ties to Carlos Marcello. In New Orleans, where Oswald spent significant portions of his life, Oswald's uncle and substitute father was Charles "Dutz" Murret, an important bookie in Marcello's gambling operations. Oswald's mom, Marguerite, dated some of Marcello's employees.

Jack Ruby stalked Oswald after his arrest – finally killing him with a pistol shot to the stomach two days after Kennedy's murder, as the alleged presidential assassin was being transferred from one Dallas jail to another.

Shortly after entering the White House in 1969, Richard Nixon moved to solidify his close favor-trading friendship with Carlos Marcello – known in the underworld as "the Big Daddy in the Big Easy." Their main go-between was old Nixon loyalist and Mob lawyer Murray Chotiner. The pinky-ring wearing Chotiner and his brother were responsible for defending 221 organized crime figures in California.

Chotiner had a White House office and an official government job from which to trade on his powerful behind-the-scenes influence. He had served Nixon since the Navy vet's very first campaign for Congress in 1946. In fact, Chotiner had introduced Nixon to L.A.'s top hoodlum, Mickey Cohen – and pressured Cohen to contribute to the Nixon campaign. Chotiner was associated with scores of other leading gangsters, including Meyer Lansky and Ben "Bugsy" Seigel.

Chotiner, on behalf of President Nixon, sought to aid Marcello. The gangster was facing a two-year prison term for his 1968 conviction of assaulting a federal official.

Throughout Nixon's first two years in office, Marcello and his lawyers used all the clout they could muster with the administration to get Marcello's sentence cut. Nixon's crooked attorney general, John Mitchell, finally put the squeeze on a federal judge to slice Marcello's prison term to six months and arranged for him to spend that time at the medical center for federal prisoners in Springfield, MO.

(Mitchell was the first person since the FBI was established in 1908 to hold the office of attorney general without undergoing an FBI investigation, thanks to a special request made by Nixon to his ever-loyal crony J. Edgar Hoover. In 1975, Mitchell himself was found guilty of conspiracy, obstruction of justice, and perjury and sentenced to two and a half to eight years in prison for his role in the Watergate break-in and cover-up.) Marcello emerged from his stay at Springfield in March 1971 – just in time to aid Chotiner's efforts to spring Jimmy Hoffa from prison.

At about the same time, President Nixon – perhaps, in part, to aid Marcello's illegal drug trafficking business – ignored a call by a blue-ribbon presidential commission to decriminalize marijuana. That decision has had startling repercussions- by criminalizing an estimated 15 million Americans arrested on pot charges.

Nixon, himself, knew what his Mafia and CIA friends were up to. Speaking with Haldeman on one of the newly released White House tapes, the 37th president dismissed the Warren Commission's lone-killer finding as "the greatest hoax that has ever been perpetuated."

J. Edgar Hoover was in the hip pocket of America’s godfathers, reputedly because they had pictorial proof of his homosexuality.

Gangster Meyer Lansky had obtained compromising photos of Hoover and Tolson. In Official and Confidential, Summers quotes former Lansky associate, Seymour Pollock, as saying in 1990, Hoover’s homosexuality was "common knowledge" and he had seen evidence of it for himself.

“What I saw was a picture of J. Edgar Hoover giving Clyde Tolson a blow job. There was more than one shot, but the startling one was a close shot of Hoover's head. He was totally recognizable.”

In September 1972, according to Hoover biographer, Mark North, in Act of Treason, America’s top cop had already learned through electronic surveillance that Marcello “had put out a contract on the life of President Kennedy … Hoover did not inform his superiors within the Justice Department or warn the Secret Service.”

Oswald had become a paid FBI informant on his return from Russia.

Apart from the claim by former FBI Security Clerk, William Walter, who processed documents to that effect, there was the revelation to top Warren Commission officials in chambers by Texas Attorney General, Waggoner Carr, and Henry Wade, the Dallas District Attorney that Oswald had been on the FBI payroll for $200-a-month since September 1962 with the informant number S-172.

FBI “counterintelligence veterans have since confirmed Oswald’s FBI employment.” The author also notes when Oswald was arrested for disturbing the peace in New Orleans in the summer of 1963, he demanded and was granted the right to see an FBI agent. Oswald spent only one night in jail in New Orleans. A representative of none-other-than crime boss Carlos Marcello bailed him out.

CIA Director Allen Dulles, was fired by President Kennedy after the ill-fated 1961 CIA-backed invasion of Cuba. Lyndon Johnson appointed Dulles to the presidential commission that rubber-stamped Hoover’s fishy finding that President Kennedy was slain by a lone Communist nut with a cheap rifle and the assassin of the presidential assassin was just another wacko acting on his own. 

Who Killed JFK?  The evidence points to a right-wing faction of the CIA with some help from its friends.  In CIA lingo, friends are referred to as "assets."  CIA assets, including media assets, were employed to help cover-up the crime.  This CIA faction was angry at JFK for his refusal to commit to a full-scale invasion of Cuba at the Bay of Pigs, and for his efforts to seek an accommodation with the Soviet Union and Fidel Castro.  High-level CIA officers are implicated.  They include:  Richard Helms, James Angleton, David Phillips, E. Howard Hunt, Theodore Shackley, William Harvey, David Morales, Edward Lansdale, and George Joannides.  Type any of these CIA officer's names into any Internet search engine, along with the words "JFK assassination,".

Following Truman and drawing on his own experience as Allied commander for Europe during World War II, Republican President Dwight Eisenhower proceeded to wage the Cold War from the White House with the National Security Council as his staff and the CIA as his secret army. Among the 170 CIA covert operations in 48 countries that Eisenhower authorized, two must rank as major debacles, inflicting especially lasting damage on America’s global standing.

In 1953, after Iran’s populist Prime Minister Mohammad Mossadeq challenged Britain’s imperial monopoly over his country’s oil industry, Eisenhower authorized a covert regime change operation to be engineered by the CIA and British intelligence. Though the Agency came perilously close to failure, it did finally succeed in installing the young, untested Shah in power and then helped him consolidate his autocratic rule by training a secret police, the notorious Savak, in torture and surveillance. While Washingtonians toasted the delicious brilliance of this secret-agent-style derring-do, Iranians seethed until 1979 when demonstrators ousted the Shah and students stormed the U.S. embassy, producing a 35-year breach in relations that weakened Washington’s position in the Middle East.

Related article:  
CIA formally admits role in 1953 Iranian coup

During his last months in office in 1960, President Eisenhower also infamously authorized a CIA invasion of Cuba, confident that 1,000 ragtag Cuban exiles backed by U.S. airpower could somehow overthrow Fidel Castro’s entrenched revolutionary regime. Inheriting this operation and sensing disaster, President John F. Kennedy forced the CIA to scale back its plans without stopping the Agency from proceeding. So it dumped those exiles on a remote beach 50 impassable miles of trackless, tangled swamp from their planned mountain refuge and sat back as Castro’s air force bombed them into surrender.

"Military and intelligence officers did not take kindly to Kennedy's attempts to restrain this powerful conglomeration.  Kennedy angered these men by refusing to use U.S. military power to salvage the Bay of Pigs Invasion.  Then he added fuel to the fire by rejecting recommendations by the joint chiefs to bomb the missile emplacements in Cuba and to refrain from signing a nuclear test ban treaty with the Russians....  Some generals -- including Dallas mayor Earle Cabell's brother, Gen. Charles P. Cabel -- even went so far as to brand Kennedy a 'traitor.'  Cabell, after being fired by Kennedy as deputy director of the CIA, resumed responsibilities in the Pentagon."
--Jim Marrs, Crossfire: The Plot that Killed Kennedy
 
Bobby Kennedy came up talking to John Kennedy and saying, "You know, if you go too far in negotiations with Kruschev and with the Communists, you're going to get assassinated.  People in this country don't want the President of the United States to make deals with the Communists."
--Pierre Salinger (JFK's press secretary), video interview
 
"The ancient imperial capital [of Rome] ... was full of dark intrigue, treachery and gruesomely memorable characters.  But it had nothing on Washington, our Rome on the Potomac....  JFK -- who was increasingly isolated from his top national security advisers in the Pentagon, CIA, and even the White House -- clearly sensed the mutinous mood in some corners of Washington.  In conversations with friends, Kennedy raised the specter of an assassination or coup with disturbing frequency during his brief presidency."
--David Talbot, "Rome on the Potomac," Salon, 3 May 2007
 
"In a remarkable passage in 'One Hell of a Gamble,' a widely praised 1997 history of the Cuban missile crisis based on declassified Soviet and U.S. government documents, historians Alexksandr Fursenko and Timothy Naftali wrote that on November 29, one week after the [JFK] assassination, Bobby Kennedy dispatched a close family friend named William Walton to Moscow with a remarkable message for Georgi Bolshakov, the KGB agent he had come to trust during the nerve-wracking back-channel discussions sparked by the missile crisis.  According to the historians, Walton told Bolshakov that Bobby and Jacqueline Kennedy believed 'there was a large political conspiracy behind Oswald's rifle' and 'that Dallas was the ideal location for such a crime.'"
--David Talbot, "The Mother of All Cover-Ups," Salon, 15 September 2004
 
"By Thursday, November 21, [Wayne] January and the Cuban had become close enough to talk somewhat freely.  During their lunch break and after a period of silence, the Cuban looked at January and said:  'They are going to kill your President.'  January could tell the man was not joking.  He had shown no sign of being less than serious before this in any conversation.  When January asked him why he was saying this, the Cuban talked about being involved in the Bay of Pigs and about being told how his friends had died because Robert Kennedy had talked John Kennedy out of sending the air support they had been promised for the invasion.  He talked about the pain and the embarrassment of those involved.  'They are not only going to kill the President, they are going to kill Robert Kennedy and any other Kennedy who gets in that position.'  January knew the man was serious, but it was too much for him to believe and he said so.  The Cuban closed the conversation with, 'You will see.'"
--Someone Would Have Talked, Larry Hancock 
     
"Goddamn the Kennedys.  First there was Jack, now there's Bobby, and then Teddy.  We'll have them on our necks until the year 2000."
--Clyde Tolson (J. Edgar Hoover's associate director, confidant, and roommate) quoted by William Sullivan, The Bureau: My Thirty Years in Hoover's FBI.  (Upon hearing Tolson's comment, Hoover reportedly nodded in agreement.  Note: Sullivan's book about the FBI was published posthumously after Sullivan was shot dead near his New Hampshire home by a man who mistook him for a deer.) 
     
"The thing I am concerned about, and so is [Deputy Attorney General Nicholas] Katzenbach, is having something issued so we can convince the public that Oswald is the real assassin."
--FBI Director J. Edgar Hoover, speaking on the telephone to Johnson aide Walter Jenkins two hours after Oswald was murdered by Jack Ruby, HSCA Report, vol. III, pp. 471-73.  (The Warren Commission -- charged with determining the truth in the JFK assassination -- relied upon Hoover's FBI as its primary investigative arm.)
The RFK Assassination -- June 1968 
     
"I hope that someone shoots and kills the son of a bitch."
--Clyde Tolson (J. Edgar Hoover's personal assistant), quoted by William Sullivan, The Bureau: My Thirty Years in Hoover's FBI.  (Tolson made this remark to colleagues at an executive meeting, in the summer of 1968, when it began to look as though Bobby Kennedy might win the presidency.) 
     
"Do you know what I think will happen to Bobby? ... The same thing that happened to Jack."
--Jacqueline Kennedy's comment to Arthur Schlesinger, Jr., after hearing of Robert Kennedy's decision to run for the presidency, Robert Kennedy and His Times 
     
"I was in Dallas when we got the son of a bitch [JFK] and I was in Los Angeles when we got the little bastard [RFK]."
--David Sanchez Morales, former Chief of Operations at the CIA station in Miami (JM/WAVE) and a consultant to the Deputy Director of the Joint Chiefs, quoted by Shane O'Sullivan in The Guardian, 20 November 2006 
     
"They're killing all the Kennedys."
--Pierre Salinger (JFK's press secretary).  Salinger made this comment to his wife after Robert Kennedy was killed.
 
"Subject to me getting elected [President], I would like to reopen the Warren Commission."
--Senator Robert Kennedy, talking to campaign worker Richard Lubic in San Francisco, David Talbot, Brothers: The Hidden History of the Kennedy Years
 
According to Robert Kennedy's former press spokesman Frank Mankiewicz, when Robert Kennedy was asked at a campaign appearance, days before his assassination, whether he would reopen the investigation into the death of his brother JFK, he uttered a simple, one-word answer:  "Yes."
--David Talbot, "The Mother of All Cover-Ups," Salon, 15 September 2004
 
Senator Edward Kennedy -- Two Near Fatal "Accidents"
 
John Dean:  ...if they get those bank records between the start of July of 1969 through June of 1971 ... there comes Chappaquiddick with a vengeance....
Richard Nixon:  (unintelligible)
John Dean:  ...if they get to it -- that is going to come out and this whole thing can turn around on that.  If Kennedy knew the bear trap he was walking into....
--Watergate tape, 3/13/73
In July 1969, a year after Senator Robert Kennedy was assassinated, Senator Edward Kennedy's car went off a bridge at Chappaquiddick, killing his woman passenger.  The following is a brief account: 
     
"On 18 July 1969, [Mary Jo] Kopechne attended a party on Chappaquiddick Island, a short ferry ride off the island of Martha's Vineyard in Massachusetts.  Edward Kennedy and Kopechne left the party together; a short time later, their car plunged off the Dike Bridge into a pond, where it overturned.  Kopechne died in the car.  Kennedy swam ashore but didn't report the accident until the next morning, later claiming he had been dazed by the crash.  Though the details of the incident are not entirely clear, Kennedy's critics suggested he had been driving drunk, had panicked after the accident, or even had tried to arrange a cover-up of his involvement.  Nothing was ever proved.  Kennedy had been considered a likely candidate for president in 1972; instead he pled guilty to leaving the scene of an accident and had his driver's license revoked for a year."
--from the Internet site, Who2? 
     This is a typical chronicle of the Chappaquiddick tragedy.  However, given the likelihood of conspiracies in the assassinations of JFK and RFK -- and the right-wing's hatred of the Kennedys in general -- it is conceivable that Edward Kennedy was also the target of conspirators. 
     
In fact, Senator Edward Kennedy was involved in a near fatal "accident" before Chappaquiddick.  On June 19, 1964, Kennedy's plane was en route to the State Democratic Convention in Springfield, Massachusetts.  However, the plane never reached its destination; it crashed on final approach.  Kennedy's aide, Edward Moss was killed in the crash, along with the pilot, Edwin Zimny.  Kennedy would spend weeks in a hospital recovering from a severe back injury, a punctured lung, broken ribs, and internal bleeding. 
     
It should be noted that during this period, one bitter rival of the Kennedy brothers was the Republican Richard Nixon.  Nixon was a favorite of America's right-wing, having taken a lead role in the Alger Hiss case and the Red Scare congressional hearings that preceded McCarthy.  Later, Nixon would endear himself to right-wing Cuban exiles and their CIA sponsors for his hard-line position against Fidel Castro. 
     
Nixon had lost the presidential election to John Kennedy in 1960 and, for a time, it looked as if his political career might be over.  However, by 1968, Nixon's fortunes had changed.  He managed to win the Republican nomination and, in November 1968, he was elected President.  Nixon's road to the White House was paved by the assassination of Democratic presidential candidate Robert Kennedy in June, five months earlier. 
     
Once in office, Nixon would use his position to wage a clandestine smear campaign against the Kennedys.  The top field operatives in the White House campaign of dirty tricks were Watergate burglars E. Howard Hunt and G. Gordon Liddy.   
     
Before joining the Nixon administration, E. Howard Hunt was a political officer in the CIA, helping to stage coups in several foreign countries.  Hunt also helped plan the Bay of Pigs invasion against Fidel Castro, developing close ties to many CIA-trained Cubans.  On a more ominous note, Hunt has been accused of involvement in the assassination of John F. Kennedy, a charge which he denied for years, but finally acknowledged in a deathbed statement released in 2007.

G. Gordon Liddy was an FBI agent from 1957 to 1962 and was part of COINTELPRO, a program of surveillance and sabotage against domestic political dissidents. 
     
One of Nixon's first attempts to tarnish the Kennedy family was aimed at the deceased President, John F. Kennedy.  In 1971, the White House requested that E. Howard Hunt forge "...some [diplomatic] cables in order to blame John F. Kennedy for the death of the leader of South Vietnam [Ngo Dinh Diem] ... for the purpose of publishing them in Time and Life."  (Source:  New York Times, David Rosenbaum, 25 September 1973)   
     
However, most of Nixon's smear attempts were aimed at Senator Edward Kennedy.  Edward Kennedy had survived the ordeal of Chappaquiddick and Nixon wanted to make sure that he was not left unscathed.  The White House asked "retired" CIA officer E. Howard Hunt to obtain "...cartoons that had been prepared in the Central Intelligence Agency, political cartoons attacking Senator Kennedy, for use should Senator Kennedy at that time run for president of the United States."  (Source:  Plausible Denial, Mark Lane)  Also, on a White House tape, Nixon can be heard telling his aides to place spies among a Secret Service detail assigned to protect Senator Kennedy in the hope of uncovering damaging information on Kennedy.  Nixon says, "we might just get lucky and catch this son of a bitch -- ruining him."  Nixon also directed two of his most ruthless aides, H. R. Haldeman and Charles Colson, to plant a false news story linking Arthur Bremer -- the man who tried to assassinate George Wallace -- to Edward Kennedy. 
     
Along with the Kennedys, the Nixon administration targeted other individuals it didn't like -- "enemies" as the White House called them.  Among these were Daniel Ellsberg who leaked the Pentagon Papers to the press; newspaper columnist Jack Anderson who Hunt and Liddy, at one point, marked for death; and the Brookings Institution, scheduled for a firebombing and break-in.

AFGHANISTAN HEROIN AND THE CIA

The CIA “needed more money than they could provide to Afghans for their war,” says Shaukat Qadir, a retired Pakistani Army brigadier general. He says the CIA instructed top generals in Pakistan’s Inter-Services Intelligence (ISI) to sanction the drug trade. General Qadir says while the DEA tried to stop the heroin smuggling, the CIA “as a matter of policy was saying its okay.” CIA officials justified drug dealing on the grounds they were promoting a greater good, according to Qadir, who bases his conclusions on conversations with fellow generals and top ISI officers.

Throughout the 1980s, the CIA shipped increasingly sophisticated weapons to the Mujahadeen through the Pakistani port of Karachi, then by truck to border towns, and then by mule over the mountain passes into Afghanistan. Heroin followed the same route on the return trip, according to many sources.

Tariq Zafar, who heads a major Pakistani drug-rehabilitation program in Islamabad, says U.S. support of drug smuggling had a devastating impact on Pakistan. “Every city along the smuggling route from Afghanistan to Karachi saw an explosion in drug addiction,” he says.

Guns, drugs, and anticommunist politics became inextricably intertwined. By the time the Mujahadeen came to power in 1992, heroin was the country’s number one export. The Mujahadeen warlords almost immediately began fighting among themselves and used the heroin trade to finance their wars. They either directly controlled the trade or taxed the smugglers. Those warlords who survived the civil war, and later battles with the Taliban, renamed themselves the Northern Alliance.

"The Central Intelligence Agency owns everyone of any significance in the major media."
--William Colby, former CIA Director, cited by Dave Mcgowan, Derailing Democracy
 
"You could get a journalist cheaper than a good call girl, for a couple hundred dollars a month."
--CIA operative, discussing the availability and prices of journalists willing to peddle CIA propaganda and cover stories. Katherine the Great, by Deborah Davis
 
"There is quite an incredible spread of relationships. You don’t need to manipulate Time magazine, for example, because there are [Central Intelligence] Agency people at the management level."
--William B. Bader, former CIA intelligence officer, briefing members of the Senate Intelligence Committee, The CIA and the Media, by Carl Bernstein
 
"The Agency's relationship with [The New York] Times was by far its most valuable among newspapers, according to CIA officials. [It was] general Times policy ... to provide assistance to the CIA whenever possible."
--The CIA and the Media, by Carl Bernstein
 
"Senator William Proxmire has pegged the number of employees of the federal intelligence community at 148,000 ... though Proxmire's number is itself a conservative one. The "intelligence community" is officially defined as including only those organizations that are members of the U.S. Intelligence Board (USIB); a dozen other agencies, charged with both foreign and domestic intelligence chores, are not encompassed by the term.... The number of intelligence workers employed by the federal government is not 148,000, but some undetermined multiple of that number."
--Jim Hougan, Spooks
 
"For some time I have been disturbed by the way the CIA has been diverted from its original assignment. It has become an operational and at times a policy-making arm of the government.... I never had any thought that when I set up the CIA that it would be injected into peacetime cloak and dagger operations."
--former President Harry Truman, 22 December 1963, one month to the day after the JFK assassination, op-ed section of the Washington Post, early edition. 

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Dismantling the Operation The Nicaraguan shoot down of the contra-resupply plane carrying American survivor Eugene Hasenfus on October 5, 1986, settled irrevocably the question of CIA assumption of Enterprise assets. With a $100 million contra-funding bill awaiting final approval in Congress, the agency could not associate itself in any way with the Enterprise operation. CIA officials had publicly and in closed congressional testimony disavowed any involvement with it. Ral Juan Rafael Bustillo, the Salvadoran military chief at Ilopango air base, ordered the resupply crews out of the country. The planes were flown to Aguacate air base and the Hondurans later took possession of them.19 Luis Posada, whose alias was Ramon Medina and who handled expenses for the pilots and crews, cleaned out the houses where resupply personnel had stayed, retrieved documents and delivered them to Quintero, who then gave them to Dutton.20 Posada also terminated the operation's leases, paid the bills and disposed of radio equipment, cars and other goods.21 The Salvadoran Air Force took possession of the operation's warehouse of parts and supplies at Ilopango.22   19 Ibid., p. 5. 20 Dutton, who received immunity from prosecution, provided these documents to OIC.   21 Posada, FBI 302, 2/3/92, pp.25-26.   22 Ibid., p. 26. North's notebooks reflect a series of conversations with Secord and others about obtaining a lawyer for Hasenfus, who was imprisoned and facing trial in Nicaragua, as well as discussions about death benefits and funeral arrangements for the pilots killed in the crash.23 William Haskell, North's friend who performed a variety of Enterprise-related duties on his behalf, and resupply manager Edward de Garay went to Panama to obtain a lawyer for Hasenfus, who was imprisoned and facing trial in Nicaragua; their mission was not a success.24 23 North's Notes, dated October 8-10, 13-15, 1986, AMX001574-93. At Secord and Hakim's request, Zucker hired a Swiss lawyer for Hasenfus. Zucker said the Swiss lawyer was unable to contact Nicaraguan officials and did not continue with the case. (Zucker, FBI 302, 5/16-18/88, pp. 4-5.)   24 Gadd, FBI 302, 7/6/87-7/7/87, pp. 22-23; Haskell, FBI 302, 7/6/87, p. 11. In December 1986, John Piowaty, an air-support manager for the resupply operation, at Dutton's request carried $6,000 in cash from Southern Air Transport in Miami to Sally Hasenfus, Eugene Hasenfus's wife.25 This amount represented two months' salary for Hasenfus, who was released from jail and allowed to return to the United States in December 1986. 25 Piowaty, FBI 302, 6/22/87. North testified that Abrams asked him to ``raise the money to pay'' for the retrieval of the bodies of pilots Wallace Sawyer and William Cooper from Nicaragua.26 According to Piowaty, Dutton told him that the families of the pilots who were killed in the shootdown would each receive $60,000 in benefits. The families, however, never received such payments.27 The Enterprise did arrange to have delivered $3,000 in cash to a Magnolia, Arkansas, funeral home for Sawyer's burial costs.28   26 North, Select Committees Testimony, 7/8/87, pp. 167-68.   27 Piowaty, FBI 302, 6/22/87, p. 4. 28 McAlister, FBI 302, 5/4/87, pp. 1-3. Independent Counsel obtained no evidence indicating that a similar payment was made for Cooper's funeral. The Enterprise attempted to establish a defense fund for Hasenfus from allocations intended for the contras. In early October 1986, before the shootdown, Secord and Hakim at North's request had three checks issued to pay outstanding contra grocery bills. These checks were made payable to Aquiles Marin, a contra representative, and sent to Rafael Quintero in Miami. Only one check for $75,000 went to the contras. Following the shootdown, Secord told Quintero to set aside a second $75,000 check and a third $50,000 check to establish a defense fund. Quintero endorsed the $75,000 check, forging Marin's signature, and mailed it with the unendorsed $50,000 check to the Banque Intercommerciale de Gestion in the Bahamas; Quintero instructed the bank to use the $75,000 check for a defense fund and to hold the $50,000 check for him (Quintero).29   29 Quintero, FBI 302, 9/1/87.

The Enterprise and the Sale of U.S. Arms to Iran The 1985 Israeli Sales Private arms dealers in 1984 began suggesting to U.S. officials that if weapons were sold to Iran, Iranians could gain the release of Americans held hostage by terrorists in Lebanon. Manucher Ghorbanifar, an Iranian exile and former CIA informant who had been discredited by the agency as a fabricator, was a driving force behind these proposals. By August 1985, Israel had obtained, through National Security Adviser Robert C. McFarlane, President Reagan's approval to sell U.S. arms to Iran and to replenish Israeli weapons stocks. In 1985, there were two Israeli sales of U.S. weapons to Iran: 504 TOW missiles in August and September 1985, and 18 HAWK missiles in November 1985. The Israelis relied on international financier Adnan Khashoggi to raise ``bridge financing'' for the deals, because the Iranians would not pay for the weapons until they were delivered, and Israel would not ship the weapons before Iran paid for them. Although no U.S. funds were involved in the November 1985 HAWKs transaction, the Enterprise derived a windfall. As described elsewhere in this report, the HAWK shipment encountered logistical difficulties, resulting in the direct involvement of North and Secord. North told the Israelis to transfer $1 million to the Enterprise's Lake Resources account in Geneva to pay for airlifting the missiles to Iran; they did so on November 20, 1985.30 The Israelis thought the million-dollar request was reasonable based on an anticipated four flights to ship 80 HAWKs at $250,000 per flight.31   30 Israeli Financial Chronology, 4/26/87, AOW 0000182, as released in Select Committees Report, p. 179.   31 Ibid. After the first 18 HAWKs were delivered to Iran, the Iranians rejected them. The rest of the shipment was cancelled. The Enterprise had spent only $127,700, on the single shipment. The difference -- approximately $870,000 -- remained in the Lake Resources account commingled with funds from other sources; it was used for aid to the contras and other purposes.32 32 Secord testified before Congress that the Israelis did not ask for their money back. He said he discussed the matter with North in December 1986, and North told him they could use the money ``for whatever purpose we wanted. We actually expended it on the Contra project.'' (Secord, Select Committees Testimony, 5/5/87, p. 95.) Because of the commingling of funds in the Lake Resources account, however, it is not possible to directly tie the Israeli deposit to an expenditure of funds on the contras.

Direct U.S. Arms Sales to Iran: The Enterprise as U.S. Agent In January 1986, the Reagan Administration decided to sell weapons directly from U.S. stocks to Iran, eliminating Israel as an intermediary and employing Secord as an agent to make the sales and transport the arms, masking official U.S. involvement. President Reagan authorized the direct sales in a January 17, 1986, covert-action Finding. Under the Finding, Secord, acting as an agent of the CIA, would sell arms to brokers representing the Iranians, who then would sell them to Iran. Secord would obtain payment in advance from the Iranians and deposit in a CIA account the amount the CIA was to pay the Department of Defense for the weapons. The CIA would purchase the weapons from the Department of Defense at cost under the Economy Act; 33 Secord would deliver them to Iran.   33 The Economy Act permitted sales at cost between Government agencies. Ghorbanifar, as broker for Iran, borrowed funds for the weapons payments from Khashoggi, who loaned millions of dollars to Ghorbanifar in ``bridge financing'' for the deals. Ghorbanifar repaid Khashoggi with a 20 percent commission after being paid by the Iranians. The Reagan Administration's 1986 decision to sell weapons directly to Iran eliminated the Israeli arms dealers from the initiative. Amiram Nir, an Israeli counter-terrorism official, became the Israeli representative in the negotiations. At North's request, he gave Ghorbanifar the number of the Lake Resources account, into which deposits for the arms purchases were to be made.34   34 Allen, Grand Jury, 1/4/88, pp. 46-47; Secord, Grand Jury, 5/14/87, p. 339. February 1986: 1,000 TOW Missiles In January 1986, North and Secord negotiated on behalf of the United States the sale of 4,000 TOW missiles to Iran. Ghorbanifar agreed to pay $10,000 for each TOW. The terms and conditions negotiated by North and Secord required an initial sale of 1,000 TOW missiles for $10 million, and subsequent sales of an additional 3,000 TOW missiles for $30 million. North falsely informed DoD and the CIA that Secord would receive only $6,000 per TOW, or a total of $6 million. The Defense Department established its price as $3,700 per TOW missile for its sale to the CIA and the price to be paid to the CIA by Secord. Between February 7 and February 18, 1986, Khashoggi deposited $10 million into the Enterprise's Lake Resources account.35 On February 10-11, 1986, $3.7 million was transferred from Lake to a CIA account for the weapons. Between February 17 and 27, 1986, 1,000 TOWs were shipped to Iran. In addition, 17 HAWK missiles from the failed November 1985 shipment were returned from Iran to Israel. 35 Khashoggi transferred $5 million from his own Bank of Credit and Commerce account in Monte Carlo to Lake Resources, and he raised the remaining $5 million from two investors: He borrowed $2.5 million from a wealthy woman in Monte Carlo and $2.5 million from Galliot Lines S.A., owned by Syrian banker Oussama Lababidi. (Khashoggi, FBI 302, 5/8/87, p. 8.) The Enterprise's direct expenses in connection with the transportation of the weapons were about $716,000, leaving a surplus of $5.6 million. The plan to sell 3,000 more TOW missiles on the same terms to Iran did not materialize.36 36 As originally contemplated by North and Secord, the Enterprise would have drawn off roughly $22 million after expenses, if 4,000 TOWs had been sold. This calculation is arrived at by quadrupling the surplus of $5.6 million on the 1,000 TOW deal. Iran paid higher prices for the weapons than those already inflated by the Enterprise, because Ghorbanifar added large commissions of his own. Khashoggi said his commission was split with Ghorbanifar; Roy Furmark, who had introduced Khashoggi to Ghorbanifar; and Triad International Marketing, a Khashoggi business.37 37 Ibid., p. 11. Ghorbanifar described a similar split. (Ghorbanifar, OIC Deposition, 12/9/87, p. 142.) Further complicating the matter, Israel had expected to pay for the replacement of TOWs it sent to Iran in 1985 from Enterprise mark-ups on the 1,000 TOWs sold to Iran in February 1986. According to the Israelis, however, North claimed the proceeds were less than anticipated and would not cover the cost of the replenishment.38 38 Israeli Financial Chronology, 4/26/87, p. 20, AOW 0000190, as released in Select Committees Report, p. 224. May-August 1986: HAWK Parts to Iran; Israeli TOWs Replenished In the spring of 1986, North negotiated on behalf of the United States a sale of 240 HAWK missile spare parts to Iran. He also negotiated with representatives of Israel for the purchase of 508 U.S.-made TOW missiles to replace those shipped by Israel in August and September of 1985. In combination, these transactions resulted in $16.685 million being deposited by Iranian and Israeli representatives into the Enterprise's Lake Resources account in Geneva. The CIA charged the Enterprise $3,469 for each of the 508 TOW missiles sold for replenishment to the Israelis, plus shipping and handling costs. This cost was passed on to the Israelis. For the HAWK spare parts for Iran, the CIA charged $4.337 million, plus shipping and handling. North, however, had multiplied this true cost by a factor of 3.7 in setting the price to be paid by Ghorbanifar. On May 14-16, 1986, a total of $15 million in bridge financing was deposited into the Lake Resources account by Khashoggi, acting on behalf of Ghorbanifar. On May 15-16, 1986, Israel deposited a total of $1.685 million in the Lake account.39 Of the total $16.685 million deposited, only $6.5 million was paid to the United States for the Iranian and Israeli weapons purchases. The expenses involved in these shipments were about $1 million, resulting in a surplus of $9.2 million for the Enterprise. 39 Although the Israelis expected the replenishment to be paid from mark-ups on the Iran weapons sales, they finally agreed to pay this amount after Nir was informed that sufficient funds were not being generated. (Israeli Financial Chronology, 4/26/87, pp. 26-67, AOW 0000196-97, as released in Select Committees Report, pp. 224-341.) Khashoggi and Ghorbanifar Encounter Financial Problems; a ``Second Channel'' into Iran Is Pursued   In raising the $15 million bridge financing for the HAWKs spare parts, Khashoggi in April 1986 asked British entrepreneur Tiny Rowlands to invest. After Rowlands declined, Khashoggi turned to Oussama Lababidi who, using the name ``Kremdale Corporation,'' put up $5 million. The remaining $10 million came from Vertex International in the Cayman Islands, backed by investors Ernie Walter Miller and Donald Fraser of Canada. Khashoggi said he created a company ``Trivert International,'' to handle the Vertex loan.40 40 Khashoggi, FBI 302, 5/8/87, p. 10, and 11/4/87, p. 5. According to bank records obtained by Independent Counsel, on May 14, 1986, a $10 million payment was made into Lake Resources by Trivert International by order of W.E. Miller. On May 16, 1986, Lake Resources received $5 million from Garnet Overseas at BCCI; Garnet received the funds from Khashoggi's account and Khashoggi's account received the funds from Ray Trading. Because Ghorbanifar only repaid $8 million, the investors lost $7 million of their initial investment. Ghorbanifar received from Iran only $4 million; it is unclear where he obtained the other $4 million to partially repay the investors. In June 1986, the Iranians obtained a U.S. price list for the HAWK spare parts. After seeing the list, they refused to pay the radically inflated amount -- $24 million -- Ghorbanifar had charged them. As a result, Ghorbanifar paid back Khashoggi a total of only $8.1 million on the $15 million bridge-financing loan, which with the 20-percent bridge-financing commission required payment to Khashoggi of $18 million. While these financial disputes were brewing, the Reagan Administration decided to pursue a ``second channel'' into the Iranian parliament, cutting out Ghorbanifar, his Iranian contact and Nir. When Poindexter told Nir about the second channel in September 1986, Nir responded that making a switch would require paying off Ghorbanifar's $10 million debt to the financiers.41   41 Allen, Grand Jury, 8/9/91, pp. 122-25.

October-November 1986: 500 TOWs Sold; Hakim Seeks More In October 1986, North and Secord on behalf of the United States negotiated a sale of 500 TOW missiles to Iran. The United States charged $3,469 per TOW missile, plus shipping and handling, while the Enterprise charged the Iranians $7,200 per TOW. The Iranians, no longer acting through Ghorbanifar but through a ``second channel,'' paid $3.6 million, deposited on October 29, 1986, into the Enterprise account known as Hyde Park Square Corporation. The Enterprise paid the CIA $2.037 million for the TOWs. Direct expenses incurred by the Enterprise came to less than $200,000. The Enterprise cleared $1.463 million as a result. In October 1986, Hakim in meetings with Iranian representatives took on the role of arms dealer and hostage negotiator. He proposed a nine-point plan for the phased release of the American hostages, based on further arms shipments and other conditions to be met by the United States.42 These negotiations did not result in further arms sales. 42 In these meetings, Hakim was continuing a process begun by North, who, on behalf of President Reagan, presented a seven-point plan for hostage release. Hakim told Independent Counsel that he had expected Iran to invest $50 million in future arms sales.43 43 Hakim, FBI 302, 2/20/91, p. 14. Hakim told Congress that had the United States renewed ties to Iran, he and Secord expected a 3 percent share of an expected $15 billion-a-year arms market. (Hakim, Select Committees Deposition, 5/23/87, pp. 256, 263-64.)

Fall 1986, the Arms Sales Unravel: Exposure and Cover-Up In August 1986, Ghorbanifar complained to Furmark that the mark-ups charged by the Enterprise were going to the contras or Afghan rebels. Ghorbanifar told Furmark: ``No sooner than we pay money, it probably is going down south.'' 44   44 Furmark, FBI 302, 2/22/88, p. 10. Khashoggi also was upset about being cut out of the U.S. arms sales by the establishment of the ``second channel'' into Iran. He said he devised a ``ploy'' to get CIA Director Casey to repay the $9.9 million he felt he was owed for the HAWK-parts investment. Aware of Furmark's past ties to Casey, Khashoggi said he told Furmark on October 1, 1986, that the bridge loan from the HAWKs parts deal had not been repaid and that Canadian investors (Miller and Fraser with a $10 million participation) might sue, publicly exposing the U.S. arms sales to Iran.45   45 Khashoggi, FBI 302, 5/8/87, p. 11. Fraser said he did not threaten to sue, and it was likely that Miller didn't either (Fraser, Select Committees Deposition, 4/29/87, pp. 58-59). Khashoggi said he sold stocks in April 1987 to repay Fraser and Miller. (Khashoggi, FBI 302, 5/8/87, p. 11.) Before Furmark approached Casey with this information, there had been other attempts to warn the Reagan Administration. Charles Allen of the CIA learned of Ghorbanifar's financial difficulties in August 1986; he knew previously about the mark-up in arms sales prices from intelligence reports; he had suspected that the extra funds were used for an Iran/contra diversion. In August, Allen warned his superior, CIA Director of Intelligence Richard Kerr. Kerr warned Deputy Director for Central Intelligence Robert Gates.46 By early October, Allen warned Casey. 46 See Gates chapter. Ghorbanifar complained to his original U.S. sponsor, Michael Ledeen, an NSC consultant. Ledeen testified that Ghorbanifar told him that Canadian investors were owed $10 million from the Iran deals and might go public; Ledeen at some time told North and Casey, but the date is unclear.47 Nir also in mid-September warned CIA and NSC officials that Ghorbanifar needed $10 million or his creditors might expose the arms sales.48 47 Ledeen, FBI 302, 12/17/86, p. 13. Also, Ledeen, Grand Jury, 9/30/87, pp. 57-60, 64-65, 114-16. 48 Allen, Grand Jury, 1/4/88, pp. 22-26. Members of the Enterprise, meanwhile, were apparently trying to shut down the Ghorbanifar-Khashoggi operation through other means. On September 2, 1986, Hakim informed Allen that Ghorbanifar and ``his banker'' were involved in a planned shipment of 1,250 TOWs to Iran. Allen alerted Customs and the FBI, which reported back that there was no evidence to substantiate the claim. (Ibid., p. 11.) North was aware that he would have to pay Ghorbanifar some amount of money to eliminate him from the deals. In a September 10, 1986, memorandum to Casey, Allen relayed that North had told him that Poindexter believed that ``to cut Ghorbanifar out, Ollie will have to raise a minimum of $4 million.'' 49 49 Ibid., p. 20. Furmark met with Casey in Washington on October 7, 1986, to warn of possible exposure of the Iran arms sales. Furmark said he told Casey about Khashoggi's financial problems and mentioned the Lake Resources account, which Casey said he believed was an Israeli account. Furmark did not, at this meeting, mention Ghorbanifar's belief that the money had gone to the contras.50 Casey told Furmark that CIA officials would get in touch with him for additional information. 50 Furmark, FBI 302, 2/22/88, p. 10. CIA officers Allen and George Cave then met with Furmark. On October 22, Furmark told them that Iran proceeds possibly were being diverted to the contras. In early November 1986, Furmark met with Allen and gave him Ghorbanifar's bank account number. On November 24, 1986, Furmark said he met again with Casey and showed him records indicating that Khashoggi had put up $25 million for the arms sales, and that $10 million was owed.


The Iran/Contra Diversion Because of the commingling of Enterprise funds, it was not possible to determine precisely how much money was diverted from the Iran arms sales proceeds to the contras. After direct U.S. sales of arms to Iran began in February 1986, the amount of proceeds diverted to the contras that could have been proved at trial was $3.6 million. It probably was at least $1.1 million more.51 51 The $3.6 million diversion estimate does not include expenditures OIC could not provide evidence for at trial but were, in fact, contra-related, including: the purchase of a $200,000 Jetstar by the Enterprise for contra-related travel; a $500,000 weapons purchase from Monzer Al Kassar, who was not available to testify; and about $535,000 that was used to purchase, operate and insure the Danish freighter, the Erria, which was not used exclusively for contra operations. Independent Counsel arrived at the diversion figure of $3.6 million by calculating the Enterprise's total contra-related expenses following the first direct U.S. shipment of arms to Iran in February 1986, less the amount of funds in Enterprise accounts specifically deposited on behalf of the contras.  The Enterprise's contra-related expenses after February were conservatively estimated at $6.7 million. The amount deposited for the contras was $3.1 million. Thus, the amount that was clearly diverted from the arms sales was $3.6 million. North, in his testimony, attributed to Nir and Ghorbanifar the idea for a diversion of arms sales funds to the contras. In the Poindexter trial, although uncertain, he fixed the date in December 1985 or January or February of 1986.52 As early as November 14, 1985, North's notebooks show that he discussed with Nir a plan to obtain the release of the hostages by payments to certain Middle Eastern factions. The questions they discussed included: ``How to pay for; how to raise $,'' and a possible solution was to set up a ``joint'' Israeli-U.S. ``covert op.'' According to the Israelis, North apparently told Israeli defense officials in a meeting in New York on December 6, 1985, that he intended to divert funds from the arms sales to the contras.53 52 North, Poindexter Trial Testimony, 3/13/90, p. 1092. 53 Israeli Historical Chronology, 7/29/87, pp. 55-56, AOW 000068-69, as released in Select Committees Report, p. 197. Secord said North pressed him to send funds from the Iran operation to the contra operation.54 Secord claimed he did not view this as a diversion, but simply as shifting funds from one of his operations to another. 54 Secord, FBI 302, 3/12/88, p. 4.   The diversion to the contras was only one dimension of a much larger theft of Government funds generated by the Iran and Israeli-replenishment transactions. The Enterprise in 1986 illegally diverted for its own purposes $16 million generated by the sale of U.S. property to Iran. --------------------------------------------------------------------------- [In millions]*** BOX HEAD *** *** BOX HEAD *** -------------------------------------------------------------------- Amount Charged for U.S. Weapons to Iran and Israel.....$30.3 Amount Paid to the U.S......12.2 Enterprise Expenses.....2.1 Funds Owed to U.S......$16 -------------------------------------------------------------------- The funds from inflated arms prices went into the network of Swiss accounts controlled by Hakim, Secord and North. Funds from all sources were commingled, laundered, and disbursed to a variety of individuals and entities. Although approximately $16 million was withheld, only $7.8 million remained in the Enterprise Swiss accounts when they were frozen in December 1986.55 55 Sixteen of 21 Swiss Enterprise accounts had funds remaining in them when they were frozen in December 1986. The total at that time was $7,814,899.24. Since then, at least $3 million in interest has accrued.


The accounts and balances at the time the funds were frozen were: Albon Values Corp. $5,494.16 Defex S.A. $88,662.50 Dolmy Business Inc. $6,508.85 Gulf Marketing Consultants Inc. $235.36 Hyde Park Square Corp. $1,136,815.47 Lake Resources Inc. $430.60 Stanford Technology Corp. $13,955.99 Stantech Services S.A. $15,806.48 Toyco S.A. $25.73 B. Button $211,990.71 Hakim Albert $259,593.46 AH/Subaccount 1 $2,129,151.51 AH/Subaccount 2 $2,051,909.30 AH/Subaccount 3 $157,146.12 Korel Assets $1,547,035.75 Scitech Trading Group Inc. $190,137.25rn,s Total $7,814,899.24 The Swiss Enterprise accounts that had no funds in them in December 1986 were: Energy Resources International S.A., Udall Research Corp., C. Tea investment account, Lake Resources investment account, and Richard V. Secord investment account.

Enterprise Benefits to Secord and Hakim Secord and Hakim benefited substantially as a result of their involvement in the Iran and contra operations. Secord in 1985 and 1986 received $2 million in direct personal benefits from the Enterprise, and more than $1 million in cash payments. Hakim in 1985 and 1986 received $2.06 million in direct benefits, and more than $550,000 in cash. The benefits fell into three broad categories: pro-rated profit distributions on contra weapons sales, for which each received $1,557,377; money from Enterprise accounts that went into Secord-Hakim business ventures, amounting to $520,000 each; 56 and funds withdrawn from Enterprise accounts for personal use, including repairs to a Secord plane amounting to $5,729, payments of $20,000 each by Secord and Hakim for a business venture in the Middle East, and $3,000 each for investment in a catfish business venture. 56 Secord and Hakim apparently lost substantial sums in each of these business ventures, all of which occurred in 1986. None of the money was ever returned to the Swiss Enterprise accounts from which it came. Secord and Hakim in 1986 shared jointly in the following investments: Tri-American Arms  $150,000 Quinnault Timber $130,000 Forways $760,000rn,s Total $1,040,000 Tri-American Arms was a Colorado arms-manufacturing venture; Quinnault Timber involved the development of timberland in Washington state; and the Forways investment was in a New Jersey military parts manufacturing concern partly owned by the Enterprise's money manager, Willard Zucker. Cash payments to Secord in 1985 and 1986 totaled approximately $1,037,000. About $14,000 could be traced to the payment of business expenses, and nearly $20,000 was cash Secord withdrew from his profit account. The remaining $1.003 million in cash payments to Secord were for unknown purposes. Hakim in 1985 and 1986 received $550,000 in cash from the Enterprise. Hakim spent about $32,000 of this on business expenses, and about $39,000 were withdrawals from his profit account. Hakim received approximately $478,500 in cash for unknown purposes. In addition, the Enterprise transferred at least $696,000 in 1985 and 1986 from its foreign accounts into Secord and Hakim's domestic company, STTGI. Secord and Hakim went to great lengths to conceal this income -- using false loan documents and invoices -- to suggest that the transfer of cash to STTGI was a loan. Secord and Hakim took other steps to keep their profits hidden. As described earlier, in mid-1985 they created a receiving account -- Defex, S.A. -- with virtually the same name as a Portuguese weapons supplier to create the false impression that they were paying almost the same price for contra weapons as they were charging the contras. Also in mid-1985, Secord instructed Zucker to remove Secord's name from all Enterprise accounts and to transfer his profits into a code-named account. He closed the ``Richard V. Secord'' investment account and opened an investment account named ``Korel Assets.'' In December 1986, Secord attempted to get Zucker to agree to a false story that Secord had foresworn his profits.

Finally, Secord and Hakim did succeed to some extent in disguising their benefits. Hakim provided the Select Committees in 1987 a set of financial records that did not identify payments to himself, Clines and Secord. These financial records were recorded in what was known as the ``Hakim Ledger,'' pursuant to Hakim's instruction to Zucker in 1986 to collapse the individual profit accounts.

OIC reconstructed the profit accounts with the help of a former assistant to Zucker, Roland Farina, who had coded the receipts to show the profit account to which they would have been allocable had they not been collapsed. 

The CIA and the Cult of Intelligence

The "Enterprise" is not a cabal operating against the will of the president or the CIA, but is an illegal, secret government-sponsored operation established by CIA director William Casey and was coordinated by then White House aide Oliver North, with assistance from a network of ultra-right groups who are determined to circumvent the will of Congress. This "Enterprise" at times works closely with the Mossad (Israel's terrorist secret police) and carries out clandestine counterinsurgency missions. Some of these counterinsurgency missions are based on the same model of pacification used by U.S. Special Forces and clandestine CIA operations in Vietnam. It is just this emphasis on counterinsurgency and clandestine operations rather than direct military battles that forms the basis of the "Enterprise".  

The CIA promotes covert action techniques which can be traced to the influence of the British intelligence service MI5 on the Office of Strategic Services (OSS), precursor to the CIA.

FINANACING THE ENTERPRISE

Richard Secord and Albert Hakim in 1983 founded Stanford Technology Trading Group International (STTGI).1 Hakim was chairman of the board. Secord was president. STTGI was wholly controlled by them. In the fall of 1984, North introduced Secord to contra leader Adolfo Calero to assist Calero in the purchase of arms, using the proceeds of a contribution from Saudi Arabia.

1 STTGI is distinct from Stanford Technology Corporation (``STC''), founded in 1974 by Hakim. Hakim and Secord subsequently formed a number of shell corporations in Switzerland with related names, including StanTech Services S.A.; Stanford Technology Corporation Services, S.A.; and Scitech, S.A.   In 1985 and 1986, weapons sales to the contras and Iran generated an increasing proportion of STTGI's income; by 1986, the business of STTGI was the Enterprise. Financial management of all Enterprise assets was done in Switzerland by Compagnie de Services Fiduciaire (CSF), controlled by Willard Zucker, an American tax lawyer living in Geneva.2 2 Zucker had provided Hakim with financial services since the mid-1970's, when Hakim still lived in Iran. Swiss fiduciaires combine functions that Americans associate with money managers, bankers and lawyers. The services CSF provided to the Enterprise included inter-bank and inter-account transfers, cash disbursements to individuals, expense payments, investments, currency deals, the establishment of financial accounts and shell corporations, and bookkeeping. Secord and Hakim decided very early -- by mid-1985 at the latest -- to conceal the sources of their income through a variety of schemes. One of their purposes was to avoid the payment of income taxes. In addition to the protection afforded by Switzerland's strict bank-secrecy laws, Zucker at the direction of Secord and Hakim erected a maze of dummy corporations and bank accounts to conceal the true sources and recipients of funds.3 3 The Enterprise's Swiss corporate accounts were: Energy Resources International, S.A.; Lake Resources Inc.; Hyde Park Square Corporation; Albon Values Corporation; Defex, S.A.; Dolmy Business, Inc.; Gulf Marketing Consultants, Ltd.; Stanford Technology Corporation Services, S.A.; Stantech Services, S.A.; Toyco, S.A.; and Udall Research Corporation. The investment accounts were: Richard V. Secord; C. Tea; Albert Hakim; Korel Assets; Scitech Trading Group, Inc.; Lake Resources Inc.; B. Button; and A.H. Sub-accounts #1, #2 and #3. More than $47.6 million flowed from the Iran and contra operations into the Swiss Enterprise accounts. The receiving accounts were: Energy Resources International, S.A. ($11.3 million); Lake Resources Inc. ($31.5 million); and Hyde Park Square Corporation ($4.8 million). From its receipts, the Enterprise transferred to a CIA Swiss account a total of $12.2 million to be paid to the Department of Defense for U.S. weapons sold to Iran. The Enterprise also disbursed $17.6 million for weapons purchases for the contras and contra-related expenses. Shortly after the Iran/contra matter became public in late November 1986, the Swiss government at the request of the United States froze the accounts of the Enterprise. At the time, 16 out of 21 corporate and investment accounts of the Enterprise contained a total of $7.8 million.

The direct U.S. weapons sales to Iran, which began early in 1986, generated by far the largest revenues for the Enterprise. Unlike the contra sales transactions, the Enterprise did not buy and sell the Iran arms as brokers or for its own account. It acted as agent, a front, for the true owner of the arms, the United States. The sales were incidental to a presidential direction and a presidential objective. Sales and delivery to the ultimate purchaser were at all times subject to the control of the President, acting through Poindexter and North. As agent, the Enterprise was a service organization collecting funds for the United States and delivering weapons for the United States. In 1986 the Enterprise received $30.3 million from the sale of this U.S. Government property to Iran and for replacement TOW missiles to Israel. Only $12.2 million was returned to the United States. Direct expenses of the Enterprise were approximately $2.1 million. Thus, the amount of U.S. Government funds illegally held by the Enterprise as its own was approximately $16 million. 4 The compensation of a proprietary or private ``cut-out'' for the CIA is usually set in advance. This was not done for Secord. Although technically an agent for the CIA, he operated under the direction of the national security adviser. Under these circumstances, a claim for compensation would have been limited to that which was agreed to by a properly authorized Government officer and which was reasonable for the services rendered -- not half the proceeds.

The Enterprise and the Contra Arms Sales  In late 1984, Secord and Hakim, at North's request, began selling weapons and other lethal supplies to the contras. They acted as brokers, buying weapons from other arms dealers and paying for them with money provided by Calero, whose funds primarily came from secret donations by Saudi Arabia.5 Beginning in mid-1985, private and foreign-country donations to the contras were deposited directly into the accounts of the Enterprise to supply the contras, effectively eliminating Calero as a money-handler, with the exception of what remained in the contra account from the Saudi donations. 5 The Saudis in mid-1984 began donating $1 million a month to the contras; in 1985, they doubled that amount. In all, the Saudis gave $32 million for the purpose of resupplying the contras during the period in which U.S. aid was prohibited by the Boland Amendment. In 1985 and 1986, there were ten pro-rated profit distributions among members of the Enterprise for the contra weapons sales. The draws from these sales between April 1985 and September 1986 amounted to $4.579 million. The distributions occurred in seven numbered phases, and three that were unnumbered. Secord late in 1984 arranged an initial sale of weapons to the contras through a Canadian firm, TransWorld Arms (TWA), headed by Emanuel Weigensberg. TWA's supplier was a Portuguese weapons firm known as Defex, which arranged for the purchase of a shipload of weapons from the People's Republic of China. Due to unexpected delays, the weapons did not arrive in Central America until April 1985. The contras paid $2.3 million for the weapons. According to Enterprise books, total profits on the ``Phase I'' contra weapons sale amounted to $720,400. Weigensberg at TWA received one-third of this amount ($240,133), as did Thomas Green, the Washington, D.C., lawyer who had introduced Secord to TWA. Secord and Hakim split the remaining amount equally, each receiving $120,066. Due to delays in delivery of the Phase I shipload of weapons and in order to eliminate Weigensberg and Green from the profit shares, Secord recruited two former colleagues, Clines and Rafael Quintero, to arrange a second purchase of arms. Clines' acquaintance with the owner of Defex (Portugal) enabled Secord to work directly with that company. All profits from this and later arms sales were allocated to Secord, Hakim and Clines. Quintero was paid a monthly salary plus bonuses for successful arms deliveries.

Phase II of the Contra Arms Sales (January-March 1985) A second order, Phase II, was filled in two plane loads of arms purchased from Defex Portugal: one delivered in January and the second in March 1985. Secord arranged for air transport with the help of Richard Gadd, an Enterprise sub-contractor who had served under Secord in the Air Force. Gadd in turn enlisted a Miami air charter company, Southern Air Transport (SAT), which then subcontracted these flights to a second carrier. CSF's books show that the contras paid $1.235 million for the weapons in these two shipments. Total profits were $310,840. Secord and Hakim each received 40 percent of the profits (or $124,336 each), and Clines 20 percent ($62,168).

Phase III of the Contra Arms Sales (March-May 1985) Secord made plans for a third shipment of arms to the contras in the spring of 1985. The weapons arrived in Honduras from Portugal in June 1985 on a leased Danish freighter, the Erria, which the Enterprise purchased a year later. CSF's books show that the contras paid $6.407 million for the arms. Total profits were $1.5 million; Secord and Hakim got 40 percent each ($621,936 each), and Clines 20 percent ($310,966). Summer 1985: Calero's Purchasing Power Is Removed, the Creation of the ``Defex'' Account to Disguise Profits, and the Lake Account In late June 1985, North and Secord met in Miami with Calero and contra military commander Enrique Bermudez to inform them that private contributors would begin paying the suppliers -- the Enterprise -- directly for weapons, rather than giving money to the contras to buy the weapons themselves. In the future, funds raised from private donors and from third countries were to be deposited into the accounts of the Enterprise, effectively allowing it to corner the contra-arms market. Shortly after the Miami meeting, Secord and Hakim devised a new system for distribution of the profits. They had the Enterprise's Swiss fiduciaire CSF in July 1985 create a Liberian shell corporation named ``Defex S.A.'' The new corporation was intentionally given a name similar to that of the Portuguese arms company, Defex, to enable Secord and Hakim to conceal from the contras the high mark-ups of the Enterprise, by having their financial records suggest that the marked-up prices they charged for arms were being paid to Defex, the supplier. CSF opened the Defex S.A. bank account at Union de Banques Suisse (UBS) in Fribourg, Switzerland, on July 23, 1985. More than $3 million went through the Defex S.A. bank account between July 1985 and August 1986. Zucker described the purpose of creating the Defex S.A. account -- to hide the profits -- in a memo to his assistant Roland Farina on July 8, 1985. Zucker told Farina that Defex Portugal, the Lisbon-based arms supplier from which the Enterprise (under the name Energy Resources) purchased the contra weapons, may . . . seek to approach Energy's customer [the contras] directly, thereby seeking to cut out Energy, and offer similar merchandise at significantly lower prices, explaining to the ultimate customer that Energy has kept for itself a large commission. To counter this possibility, we have created a LIberian [sic] company with the name DEFEX. S.A. Energy would like us to pay to the account of this Liberian Company ``DEFEX'' the spread or commission earned on the transactions . . . In this manner, we can show debit advices on the Credit Suisse account of Energy for transfers made to DEFEX, and those together with all of the other disbursements made, will more or less equal the amounts received by Energy. . . . The objective, I repeat, is to have in hand sufficient debit advices in Energy so that if any questions are asked whether the entire amount received was expended, we can show payments approximating the amounts received to DEFEX or for expenses relating to the shipments.6   6 Memorandum from Zucker to Farina, 7/8/85, AMU 005189. A further change in the financial structure of the Enterprise in the summer of 1985 helped disguise the money trail further. Payments from the contras for the first series of arms sales went into the Enterprise account named Energy Resources International. In the summer of 1985, after taking control of all contra supply, Secord and Hakim created a new receiving account, Lake Resources. In July and August 1985, they had CSF transfer all funds out of Energy and into Lake, through the Defex S.A. account and an account of a Zucker-controlled company named Audifi S.A. After Lake was formed, all Enterprise receipts were effectively commingled in that account, regardless of their origin.

Phase IV of the Contra Arms Sales (December 1985) Secord and Hakim arranged a fourth shipment of arms to the contras in December 1985. The weapons were purchased by Calero with funds remaining in his account; transportation and other expenses were covered by funds from Calero and other sources commingled in the Lake account. The weapons were delivered to El Salvador on December 15, 1985. On December 17, CSF credited Secord's personal account, known as ``Korel Assets,'' with $100,800 in profits. The same day, Hakim received $100,800, and Clines received $50,400 in cash.

The February 1986 Distribution On February 6 and 7, 1986, CSF distributed $165,000 to both Secord's Korel account and the Hakim account.7 This distribution was distinctive for several reasons: It did not follow any arms shipment to Central America, Clines did not share in the distribution, and it was not assigned a phase number.  Most importantly, the distribution was made literally hours before the Enterprise received the first payment for a $10 million U.S. weapons shipment to Iran. 7 The financial records provided by Hakim to Congress in 1987 inaccurately showed distributions one year apart (one in February 1985 and a second in February 1986), thus concealing the apparent 50-50 split between Secord and Hakim. Secord and Hakim drew out their Lake Resources account apparently in anticipation of the payment for the Iran shipment, which represented the start of a lucrative new venture for the Enterprise.

Phases V-VII of the Contra Arms Sales (March-June 1986) Between February 27 and May 23, 1986, the Enterprise paid Defex Portugal about $860,000 for contra weapons. Weapons were delivered to Central America in March, April and May in three shipments. CSF books show profit distributions between April and June, numbered Phases V through VII, totaling $550,471. In addition, there was an unnumbered distribution of $37,277 on June 20, 1986, resulting from the Phase VII shipment.

The Undelivered Shipment and Distribution (July-September 1986) In July 1986, the Enterprise paid Defex (Portugal) $2.6 million and $500,000 to another dealer, Monzer Al Kassar, for contra weapons. In late July, a shipment of arms left Portugal for Central America aboard the recently acquired Enterprise freighter, the Erria.8 According to Thomas Parlow, the Erria's Danish shipping agent, the freighter was carrying arms picked up in Poland and Portugal.9 8 Clines, Hakim and William Haskell, an associate of North, traveled to Copenhagen in April 1986 to purchase for approximately $320,000 the Erria, which the Enterprise had leased a year earlier for a weapons shipment to the contras. The ship was purchased by the Enterprise in the name of Dolmy Business Inc., a Panamanian shell company. Thomas Parlow became the Erria's Danish shipping agent. According to Parlow, Hakim would telephone Parlow to direct movement of the ship, and Parlow would communicate those directions to the ship's captain. (Parlow, FBI 302, 3/5/87, pp. 2-3.)  9 Ibid., p. 3. As the Erria was nearing Bermuda, Parlow, acting on instructions from Hakim, ordered it to slow its speed and await further instructions. Clines then directed the ship to work its way slowly back to Portugal.10 When it arrived in Portugal it could not obtain permission to enter the port. In this mid- to late-August 1986 period, Secord ordered Clines to try to sell the cargo or dump it at sea, according to Parlow. The vessel headed for Spain, where it remained anchored for two weeks. 10 The ship apparently was ordered back to Europe because it was to be used in an impending U.S.-Israeli venture involving Iran. As the Erria made its circuitous journey, the CIA through a series of commercial entities arranged to buy the weapons aboard. According to CIA officials, they did not learn the identity of either the owner of the ship or its cargo until January 1987, when a newspaper article named the Secord-Hakim Enterprise as the owner of the ship and the weapons. The CIA paid $2.1 million for the arms shipment, including shipping and handling costs.11 According to the private arms dealer who bought the arms for the CIA, he paid $1.6 million for the weapons. Of that, the Enterprise received $1.2 million, and the remainder went to Parlow or Defex, who worked together to re-sell the weapons. 11 CIA Inspector General's Report, July 1987, p. 38. The Enterprise paid $3.1 million to arms suppliers for this shipment, but sold it to the CIA for only $1.2 million. In a conventional business, this would have represented an enormous loss. The Enterprise partners, however, split more than $861,000 in claimed profits on the transaction. Because the money originally used to purchase the weapons came from commingled funds in Enterprise accounts -- including U.S. funds generated by the sale of arms to Iran and funds donated to the contras -- Secord, Hakim and Clines, in effect, allocated to themselves funds that either rightfully belonged to the United States or the contras. In addition, the CIA helped cushion the blow of any loss the Enterprise might have felt by paying for the arms at a reduced price. Independent Counsel obtained no evidence that these arms ever reached the contras.

The Finances of the Contra-Resupply Operation In addition to selling arms to the contras, the Enterprise in the late summer of 1985 began assembling a full-service resupply operation in Central America that would air-drop weapons and other goods to contra forces in the field. In December 1985, North instructed Secord to establish an operating fund of $150,000 for Richard Gadd, whom Secord had hired to manage the resupply operation.12 In response, the Enterprise wire-transferred $100,000 to Gadd for start-up costs.13   12 Gadd, FBI 302, 7/14/87-7/15/87, p. 13.   13 Ibid. The resupply operation, known as ``Project Democracy,'' was organized and fully running by the spring of 1986. Enterprise expenditures on this effort flowed principally to four commercial entities:   1. Eagle Aviation Service and Technology (EAST). This company was run by Gadd, who was experienced in Government contracts involving covert activity. EAST received $550,007 from the Enterprise for contra-related expenses, including work on the construction of a secret airstrip in Costa Rica, payments for communications specialists, a demolitions expert and some pilots and crews. 2. Amalgamated Commercial Enterprises, Inc. (ACE). This Panamanian corporation was set up by Southern Air Transport at Gadd's request to serve as a financial ``cut-out'' -- or extra layer of concealment for the true owners of the contra-resupply operation -- for billing purposes. After its creation in late 1985, ACE received and disbursed $1,540,956 in Enterprise funds for the operation.

This included payments for two C-7 and one C-123 airplanes, for services provided by Corporate Air Services (see below); and for Southern Air Transport expenses not directly reimbursed by the Swiss Enterprise accounts. 3. Southern Air Transport (SAT). This Miami air-charter company was used by the Enterprise in both the contra and Iran operations. In 1985 and 1986, it received $1,935,596 for contra-related services, including the purchase of a C-123 cargo plane, repair and maintenance of aircraft, sale of spare parts and the supply of cash advances to the resupply operation in Central America. In addition, the Enterprise paid SAT $200,000 for a Jetstar aircraft used by Secord and others for contra-related travel. 4. Corporate Air Services (CAS). Gadd employed this Pennsylvania company owned by Edward T. de Garay as the on-site manager of the resupply operation. CAS received from the Enterprise Swiss accounts and through ACE $457,769 for salaries and other expenses. Summer-Fall 1986: The Enterprise Tries to Sell Its Contra-Resupply Operation to the CIA As Congress in the summer of 1986 moved toward lifting the ban on U.S. military aid to the contras and toward final approval of a $100 million funding bill, the Enterprise envisioned another possible business opportunity: CIA assumption of its resupply operation in Central America. As a result, North, Secord and other members of the Enterprise readied the resupply network for possible sale to the CIA. Secord in the spring of 1986 asked Robert Dutton, who had replaced Gadd as manager of the resupply operation, to prepare a description of Enterprise assets; North later asked Dutton to add a price list.14 Dutton's memo describes how extensive the operation had grown by mid-1986. 14 Undated Dutton outline of the resupply operation; attached list of assets and expenditures dated 7/21/86, 00001-15. In describing the organizational structure, Dutton stated that ``Benefactor Company,'' or ``B.C. Washington'' had operational control of all assets in support of the resupply operation, or ``Project Democracy.'' He stated that all contracts and payments went through Amalgamated Commercial Enterprises (ACE), which acted as the broker for SAT in Miami, which provided aircraft and maintenance and other support. Dutton valued the resupply operation's assets at $4.089 million, which included, among other items, two C-123 cargo jets; two C-7 planes; a Maule aircraft; 15 a secret Santa Elena, Costa Rica, airstrip; the Santa Elena property; spare parts; and munitions and supplies. 15 In 1985 and 1986, the Enterprise purchased four Maule aircraft, but apparently was offering only one as part of its resupply-operation package. Dutton described Project Democracy's operating locations: Washington, ``the hub for all operational project information;'' ``Cincinnati,'' the code name for Ilopango air base in El Salvador, where aircraft were based and four houses maintained in the city for about 18 employees; ``The Farm,'' the air base at Aguacate, Honduras, used as a ``launch and recovery site for support missions;'' ``The Plantation,'' the secret Santa Elena, Costa Rica, airstrip for refueling and emergency landing; and ``Maintenance Support Miami,'' where a support crew worked closely with SAT for procurement and delivery of required items. Dutton listed 25 salaried employees of the resupply operation, including managers, flight crews and others. Dutton proposed two options for transferring the assets of the resupply operation to the CIA: (1) sale of the assets for less than the estimated value of $4 million; or (2) leasing the assets to the CIA for $311,500 per month plus add-ons. Dutton stated that the first option was preferable. But the CIA was not eager to associate itself with the Enterprise resupply network, whose illicit operation had been concealed from Congress despite repeated inquiries. North in a computer message to Poindexter on July 15, 1986, complained about the CIA's reluctance to purchase the resupply network's assets: ``It would simply be ludicrous for this to simply disappear just because CIA does not want to be `tainted' with picking up the assets and then have them spend $8-10M of the $100M to replace it -- weeks or months later.'' 16 In July 1986, North, at a meeting with Abrams and Fiers, described the Enterprise assets in Central America. 16 PROFs Note from North to Poindexter, 7/15/86, AKW 018917. North asked Poindexter to speak to Casey about the matter; Poindexter agreed to talk to Casey, adding that he (Poindexter) had told CIA Deputy Director Robert M. Gates that ``the private effort should be phased out.'' 17 According to Alan Fiers, chief of the CIA's Central American task force in 1986, Fiers advised against CIA assumption of the operation's assets.18 17 PROFs Note from Poindexter to North, 7/26/86, AKW 021732. Poindexter told Congress he believes he told Gates ``that these assets are available and you ought to look at them, or something to that effect.'' (Poindexter, Select Committees Deposition, 5/2/87, pp. 208-9.)   18 Fiers, Grand Jury, 8/14/91, p. 77. 

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