The CIA in Crisis: Part III

Jimmy Carter’s administration sought to curb the agency’s appetite for “cowboy” tactics and worse. Carter had campaigned against the “rogue C.I.A..” The Georgian sacked C.I.A. Director George H.W. Bush and replaced him with Admiral Stanford Turner, who eventually fired over 700 agents in the famous Halloween massacre, October 31, 1979. He had previously fired 200 in 1977. He was appalled about the agency’s use of hallucinogenic drugs, its abuse of a Russian defector, its stockpiling of venoms and poisons banned by executive orders, the spying on American critics of the Vietnam war including Jane Fonda, and its abuse of the US mails. The agency gave police departments special instruments to beat up peace groups, spied on reporter Jack Anderson and Brit Hume, and kept a Washington Post report on round the clock surveillance.

Turner also abolished the agency’s private air force, Air America. From the time of his arrival, Admiral Turner encountered the determined opposition of the covert wing and had great difficulty extraction information from those people. He had the firm impression that the people in O He had the firm impression that the people in Oations were reluctant to do anything that could be exposed later and that they were adverse to all of his suggestions for relatively clean operations. It is difficult to determine if he knew much or anything about covert operations underway in Latin America. He later wrote that “The covert operations cupboard was bare.”

Turner was stunned to learn that a former agent, Ed Wilson was possibly involved in murder for hire and in weapon running to Lybia. When the admiral learned that seniorofficials Ted Shackley and Thomas Clines were close to Wilson, he decided their career advancement had to be derailed. Turner also ruled that Mossad no longer had a special status within the C.I.A.. Before leaving the agency, Clines disregarded an order to avoid business relationships with Wilson and set up his own weapons and consulting business before resigning. Shackley also left but kept close ties with George W. Bush. The Wilson matter became public knowledge in 1981, and he eventually went to prison. Former agents as well as covert officers still in service saw the Carter administration as the enemy and did as little as possible to cooperate with it, Much of Carter’s own NSC staff thought him too idealistic and was disloyal to him. There is no way of knowing if the Carter realized that Operation X was still going on, the transplanting from Vietnam to Central America counterinsurgency torture techniques. The Carter policy was that covert action should only be used as last resort. With the accession of Ronald Reagan, that policy was exactly reversed. 1

It is difficult to assess the extent to which the C.I.A. has been under the control of the White House in various times in recent history. Almost certainly, an element within it began to conceal information from the president when Jimmy Carter became president. Later, when Bill Clinton was president, the agency spied on one of his ambassadors because she was concerned about human rights in Guatemala. The agency bugged the bedroom of Ambasador Marilyn McAfee and her her “cooing endearments to Murphy.” The spooks assumed that she was having an affair with her secretary Carol Murphy and it spread the word of a lesbian affair in Washington, hoping to get her removed and protect Guatemala’s brutal intelligence service. It turned out that “Murphy” her two-year old poodle. 2


Gene Wheaton, a military crime investigator with experience in three services, worked closely with C.I.A. agents and reported that C.I.A. officers he knew

decided way back when, ‘75-’76, during the Pike and Church Committee hearings, that the Congress was their enemy... Ted Shackley and Vernon Walters and Frank Carlucci and Ving West and a group of these guys used to have park-bench meetings in the late 70s in McClean, Virginia so nobody could overhear they conversations. They basically said, "With our expertise at placing dictators in power," I’m almost quoting verbatim one of their comments, "why don’t we treat the United States like the world’s biggest banana republic and take it over?" And the first thing they had to do was to get their man in the White House, and that was George Bush. Reagan never really was the president. He was the front man. They selected a guy that had charisma, who was popular, and just a good old boy, but they got George Bush in there to actually run the White House."

The former military criminal investigator added that his former friends had a low opinion of the American electorate. The average citizen was ignorant and needed to be guided by true patriots for his own good.


Wheaton believed that the network that Oliver North and George H.W. Bush deployed in the eighties was created among these angry agents. Another term for this network was Ted Shackley’s’secret Team,” in the words of Joe Trento. Shackley thought the best way to procede was to privatize some covert operations. Of course some privatizing had gone on since the early 196os. This renewed privatgization was funded by the ‘safari Club, which was created when Bush was director . It was like the Pinay Circle in Europe, politicians, businessmen, and agents. In February, 2002, speaking at a Georgetown Alumni affair, Prince Turki described it.


In 1976, after the Watergate matters took place here (in the US), your intelligence community was literally tied up by Congress. It could not do anything… In order to compensate for that, a group of countries got together in the hope of fighting Communism and established what was called the Safari Club. The Safari Club included France, Egypt, Saudi Arabia, Morocco, and Iran. The principal aim of this club was that we would share information with each other and help each other in countering Soviet influence worldwide, and especially in Africa.

The head of Saudi intelligence then was Sheikh Kamal Adham, who was a great friend of DCI Bush. Later his nephew HRH Prince Turki bin Faisal Al Sa’ud held the post.
At that time, the Saudis opened a number of covert accounts at the Riggs Bank, where Jonathan Bush was a director. The Saudis financed some covert operations for renegades in the C.I.A. and its General Intelligence Department worked closely with the C.I.A., sometimes taking the lead in delicate operations. In this way, the Saudis gradually developed a deep knowledge of US intelligence operations and placed plants within the US agencies. In the late 70s, the small Pakistani bank, Bank of Credit and Commerce International (BCCI), became a big money lauindering machine for covert operations of all sorts throughout the world. Shackley used some of the money in operations he made sure would not be followed back to Langley. Poppy Bush had an account in the Paris BCCI branch. Time was to report that the bank had its own spies and hitmen, but it is likely that it contracted out the work to existing intelligence services. 3

The activities of the Safari Club were directed by ranking agency retirees and military men from their posts overseas. Richard Helms played an important role when he was ambassador to India. Indeed, the station chief in Tehran complained that Ambassador Helms seemed to be operating an laternative C.I.A. out of the embassy. Others have reported that the Safari Club was using some money that came from the shah or Iran. He added that Theodore Shackley had "formed the cadre of a private, shadow spy organization within America’s official intelligence service."4
In 1966, Shackley was sent to Laos, and he took many of his people with him. Before this Anthony Poshepny (Tony Poe) was having his operators turn in the ears of people they killed in the local war against Communismh. Ted Shackley was to increase the number of operatives from 30 to 250. 5 There is some question about which of their activities in southeast Asia were official ly sanctioned and which were rogue initiatives of Shackley and Clines. Shackley worked with Laotian drug king General Vang Pao and he put the general in contact with Santo Trafficante so that they could cooperate bringing drugs into the United States. Apparently, their assassination program, Operation Phoenix, was sanctioned and funded by drug money administered by a naval officer in Siagon named Richard Armitage until sometime in 1973. After that, its sanction may have been lifted and they found another mechanism to go on, while still using Armitage. By then they had far more money than they required for Operation Phoenix and deposited the rest in Australia. They also established a massive secret arms cache in Thailand. In those years, 1973-1975, Operation Phoenix still had the blessing of the State Department, and Assistant Secretary of State for Far Eastern Affairs acted as Kissinger’s liason officer with Phoenix. However, it appears that C.I.A. Direector James Schlesinger moved on May 9, 1973 to shut down all of the agency’s illegal operations. On t hat date he asked active agents to report on illegal activities and invited former agents to do the same.

When Saigon fell, Armitage was sent to Tehran. He was to reroute the flow of money and drugs from Vang Pao drug money so that the secret team could set up an assassination program to wipe out s and communists in Iran. Edwin Wilson was sent to Iran to handle the murders. Daniel Sheehan, who first discovered the operations of the secret team, thought this was a a private, non-sanctioned operation. Armitage was soon posted in Bangkog as a special consultant to deal with missiong prisoners. He was perfectly positioned to handle the finances for Wilson through the Nugen-Hand Bank in Australia. He also organized the escape of Meo tribesmen who had worked for Phoenix from Cambodia, Laos, and Thailand. Jerry O. Daniels, another diplomat, was Armitage’s bag man.

They also saw that some arms were removed from the secret cache to Iran. The State Department learned of Armitage’s activities and his failure to do anything for the MIAs, and he was forced to resign near the end of 1977. For the next two years, he operated the Far East Trading Company in Bangkog. He was living in a home owned by a friend of Major General Richard Secord, who had become linked to the Shackley team. He then became an advisor to Senator Bob Dole and eventually occupied high positions in the State Department. If the Iranian venture were a rogue operation, it is difficult to believe he could have reached such heights.

Secord was then Deputy Assistant Defense Secretary. In that capacity, he was able to purchase at bargain prices surplus equipment which he would route to Middle Eastern countries through middleman Albert Hakim. The goods were sold at a higher replacement cost. The difference was deposited in the Nugen Hand bank for covert, non-sanctioned operations. A number of front companies existed to serve the needs of these black operations. 6

In those trying years for the “cowboys,” many quit rather than be moved to remote outposts. Former agents frequently created private intelligence organization ( PIOs) and private military or mercenary forces (PMFs). Together with colleagues still with the agency, they created a’shadow C.I.A.” or what they called “the Enterprise.” Later, some called it the “K-Team.” Although The Enterprise worked through existing agents, allies in the military, and friends in the agency, people at the top in Langley, Virginia C.I.A. headquarters often had no clear idea of what was going on. These people were right-wingers and were convinced that Carter and Turner were destroying the agency. Two of the key players were Ted Shackley, General John Singlaub and General Edward Lansdale. Lansdale won a leading position in the Enterprise through his access dormant C.I.A. accounts originally created with Japanese war loot Lansdale fell out of favor with the Kennedy administration, was promoted to lieutenant general, and forced to retire. Lansdale played an important role in financing, and in the late 1970s, he sent Taiwanese officers to train Salvadoran right wing soldiers. Lansdale was also famous for his ring of assassins. A third founder of The Enterprise was former C.I.A. deputy director Ray Cline, whose expertise was in finance, keeping track of C.I.A. proprietary companies, and counterinsurgency. Cline later worked on Reagan’s political campaigns and was a special security advisor. They worked through many organizations including the Council for World Freedom.

Eliot Abrams, a late arrival, is at the hub of the Enterprise today. These people worked with well-known right wingers such as the Hunt brothers, the Unification Church, and the John Birch Society. Later, through its CAUSA and Linda Guells, the church helped Oliver North fund the Contras. Hundreds former C.I.A. agents of them worked hard in the primary campaign of George H.W. Bush. When Ronald Reagan was nominated, C.I.A.-tied Bill Casey became his second campaign manager, and evangelical Christians, often tied through foreign business interests and missions to the C.I.A., proved top be very useful political allies.

In 1979 “retired” C.I.A. officers Richard Helms, Ted Shackley, and and Ray Cline worked actively to oust Carter from the White House. Miles Copeland, organized’spooks for Bush.” Copeland liked Carter personally and praised his intelligence but believed that Carter’s genuine idealism was a threat to national security. He said there was a “ C.I.A. within the C.I.A.” which was the true protector of the nation’s security.

7These C.I.A. people were joined by Major General John Singlaub. In December, Singlaub and another military retiree, Lt. General Daniel Graham led an American Defense Council delegation to Guatemala where they assured right-wing leaders that Ronald Reagan would not be critical of death squads. Their efforts and those of Michael Deever would result in $10,000,000 from Guatemala and Argentina being funneled into the Reagan campaign. Singlaub became a key figure in the World Anti-Communist League, whose chapters in three European countries were controlled by former Nazis., The WACL would later send arms to the Contras in Nicarauga. 8 It was founded by Chaing Kai-Shek, Reverend Moon, people in the Nisson Corporation, and some figures who had been tied to the Third Reich. Nixon deployed it against as a counterinsurgency took in Latin America and South East Asia. In the Reagan era, it was used for assassinations and operated in many places, including Afghanistan. 9

During the Republican primaries of 1980 retired and active C.I.A. agents worked for the former director, George H.W. Bush. A House committee report later affirmed this. 10 In the 1980s, Robert M. Sensi, sometimes an agent and sometimes a contractor, collected funds abroad for the Republican party. He was so slick that it was said he “could go into a revolving door behind you and come out ahead of you." Sensi was also involved in the October Surprise, a deal that prevented Carter from recovering the hostages held by Iran. Sensi made financier Richard Hirshfeld ( aka Richard Marshall) an asset, and in 2004 they developed an elaborate scheme to financially link Democratic nominee John Kerry to Al Qaeda through his campaign treasurer, Robert Farmer. The scheme failed, but only barely ass this writer recalls when the first accusations hit the press. Hirshfeld was close to Senator Orrin Hatch. Representatives Henry Hyde, Bill McCullom and James Sensenbrenner.

Sensi and Hirshfeld were profiting from the sale of unspecified services to the Department of Homeland Security. Hirshfield was enjoying federal contracts while facing federal fraud charges. He tried to scam Habitat for Humanity and markeded "the world's only known cure for herpes," He killed himself January 11, 2005. Sensi twice served time for embezzlement while serving as a C.I.A. agent. He worked closely with the Kuwaiti royal family and was accused of defrauding the firm. Both men, coincidentally, were represented by an attorney who had represented the RNC and George H. W. Bush. 11

When Ronald Reagan became president, he permitted the intelligence agencies to work closely with the PIOs and the PFMs and authorized total secrecy about these arrangements. This meant that the private operations were not burdened with any public accountability.12

In the 1990s, there was a growth of the private intelligence community that paralleled the growth of the PIOs in the late seventies and early 1980s. In the 1990s, President Clinton somewhat accelerated the outsourcing of intelligence work and in 2001 and 2002 George W. Bush greatly accelerated the letting of contracts to the private spy industry. It should be noted, that the NSA has long been operated by private firms. Some of the firms involved were Lockheed Martin, Raytheon, Abraxas, and Booz Allen Thompson. One great advantage of using private intelligence officers is that they are less restrained by the rules of government agencies and more difficult for Congress to monitor.

In October, 2006, the

Los Angeles Times

reported that more than half the worlers in the Baghdad and Islamabad stations were industrial contractors or “greedbadgers,” as they are called. The private spy companies send case and watch officers to crisis centers, and their people serve as regional desk officers who are in charge of black operations. The various intelligence agencies are still run by “blue badges” or government employees but the supervisory structure below them is increasingly filled by contract employees.

Many of the contract spies are former C.I.A. employees, and there is little question that they perform well. Director of National Intelligence John Negroponte ordered a study of the effects of outsourcing intelligence, but the report never made public and was classified as secret. 13 Now in charge of counter-terrorism, he played a major role coordinating UA-inspired terrorism against progressives in Hondouras and Central America in the Reagan Era.

It seems that the felt much more comfortable with Republicans. Yet, it was known to undermine Republican cabinet officers. The Miami Herald found that a “ secret government” was in operation and that it ultimately reported to Bush. Reagan did not always know what this government was doing, and in 1985 it sent William Wilson, Ambassador to the Vatican, to Libya to meet with Colonel Moammar Qadhafi. Secretary of State George Schultz tried to discipline Wilson but was told Reagan knew of this in advance.

People placed in various departments ignored their superiors and reported to intelligence people who, in turn, reported to people in the NSC or tied to the NSC. Arthur Lyman, lead lawyer for the Senate committee that investigated Iran/Contra, referred to a ‘secret government-within-a-government." A key figure in this operation was Reagan intimate and the president’s second national security advisor, Judge William Clark, Reagan’s second National Security Advisor, who saw to it that Oliver North’s power increased.

Under George W. Bush, not all elements in the agency agreed to help fabricate a case that there were weapons of mass destruction in Iraq, and it was subsequently necessary to purge some of those who disagreed.