CHAPTER 5
SHADES OF GRAY
THE PR MAN
Today, the Koreagate scandal of the 1970s is largely forgotten, despite the lurid headlines it inspired at the time. Shadowy intelligence operatives, slush funds, kickbacks, complicated schemes to buy political loyalty, and rumors of sex and blackmail were just some of the themes that swirled around Koreagate and the man at its center, Tongsun Park.
As noted in the previous chapter, Park had studied at Georgetown University, where he developed close ties to certain groups of young conservative activists. While there, he was also recruited by the KCIA, the Korean intelligence apparatus. After graduating, Park became a well to-do businessman in the DC area as well as a social gadfly, forming connections with congressmen, senators, and staffers on both sides of the political aisle.
What became known as Koreagate was said to have begun when Chung Il Kwon, South Korea’s prime minister, tasked the head of the KCIA, Kim Hyong-uk, with devising an operation to influence political opinion in the United States. The resulting scheme entailed the services of Park, who was then brokering rice sales contracts from the US to South Korea under the auspices of the government’s Food for Peace program. Working with Congressman Richard T. Hanna – who represented California, one of America’s largest rice-producing states – Park utilized the commissions on these sales to peddle influence. He called upon his impressive network of contacts, who were interwoven throughout the offices of powerful Washington businesses and institutions, as well as the private clubs and backrooms of the capital, to carry out his series of kickbacks and bribes.
Appearing on the periphery of Koreagate – at least as far as the official investigation was concerned – was one of Park’s close associates, the powerful lobbyist and Public Relations executive Robert Keith Gray. Across the course of his lengthy and impressive career, Gray was adept at the art of influence peddling. The breadth of his associates ran from Korean CIA operatives such as Park to US CIA agents such as Edwin P. Wilson and soon-to-be CIA director William Casey. Among his other close associates and/or clients were Adnan Khashoggi, Robert Maxwell, the Teamsters, and BCCI (the Bank of Credit and Commerce International), among many others. It all added up to Gray acting as a key node in a shadowy network that was becoming increasingly aligned, and integrated, with the halls of power. Gray’s name would often bubble up alongside numerous scandals, with Koreagate being just one. Others would include Watergate, the largely forgotten pageboy scandal of 1982, and the Iran-Contra affair.
Gray hailed from Hastings, a moderately sized industrial town nestled in the Nebraskan countryside, about two and half hours west of Omaha. Early on, he showed an interest in politics and was an avid participant in his high school debate club. After his graduation in 1939, he and several members of his debate club attended Carleton College in Minnesota; his chosen area of study was political science. A year later, with World War II looming on the horizon, the US Navy launched its V-7 program, which was a rapid-training course for naval officers. V-7 worked closely with universities across the United States, and Gray quickly enlisted.
The next couple of years were a whirlwind for Gray. He attended the Navy Supply Corps Midshipmen Officer’s School in Newport, Rhode Island, and found time to take business management courses at Harvard. This threefold educational path – politics, business, and adjacency to the military – became defining characteristics of the rest of his long and storied career. Yet, it would be some time before he was able to make a name for himself.
After the war he bounced back to Hastings, where he worked at the naval depot that had been built there. He spent his free time building social capital: he taught business courses at Hastings College and joined many of the city’s organizations and social clubs (including the local Masonic lodge).1
During this second period in Hastings, Gray became acquainted with Fred Seaton, owner of the Hastings Tribune and a powerful figure in Nebraskan politics. Gray then served as a state senator before serving as President Eisenhower’s assistant secretary of state for legislative affairs. He brought few things with him to the capital – among them Seaton’s contact information. Seaton managed to find Gray a position in the vast complexes of the post-war bureaucracy. He went to work in the Pentagon, serving as a special assistant to Assistant Secretary of the Navy Albert Pratt.
Gray received a promotion in May 1956, which propelled him higher in the strata of power within the Eisenhower administration. He became a special assistant to the White House, acting as deputy to Seaton. Yet, as Susan Trento points outs in The Power House, there may have been more to this position than meets the eye. He had been designated as an “excepted appointment,” which means that, in lieu of a standard promotion, he had “been simply detailed to the White House from the Navy.”2
If Gray was still technically working for the Navy while at the White House, it is likely that his new position involved intelligence and security concerns. His primary task was to sift through reams of data in connection with Washington job seekers. “Gray,” Trento writes, “was controlling the flow of information about everyone looking for patronage, or political jobs, at a federal level.”3 A significant amount of this information was marked “highly confidential,” which gave Gray an inside track on government power.
Soon, he was working under Sherman Adams, Eisenhower’s chief of staff. Adams was an early Rockefeller Republican and a master bureaucrat. He was known for regulating access to the president: nobody, it was said, could speak to Eisenhower without Adams’ approval. He made up an inner core of Eisenhower cronies that included Floyd Odlum and George Allen – powerful, politically connected businessmen whose interests existed in immediate proximity to the emergent “military industrial complex,” as Eisenhower would later call it, as well as the increasingly brazen intersection of intelligence and business interests. This was the world that Gray was easing his way into under the tutelage of Adams.
After the untimely departure of Adams under the cloud of scandal, Gray gained a new mentor – Richard Nixon. This was Gray’s introduction into an expanded network of contacts that shaped the trajectory of the rest of his life. In 1960, he went to work on the ill-fated Nixon presidential campaign, perhaps encountering for the first time his future friend William Casey. He also became associated with Clark Clifford in this period; Clifford, a Democratic Party insider and archetypal cold warrior, was one of DC’s elite attorneys and had an extensive Rolodex.
Decades later, Clifford was among the numerous US political and business figures implicated in the BCCI scandal, the subject of chapter 7. Beginning in the early 1980s, Clifford served as chairman of the board of First American Bankshares, a major DC-based bank that had fallen under the secret control of BCCI via their takeover of the bank’s parent company. As Edward Jay Epstein has pointed out, First American was a bank used by numerous congressmen and other political figures – control of the bank created possible blackmail opportunities.4 Shortly after Clifford took control of First American, Gray joined the bank’s board of directors.5
Following John F. Kennedy’s defeat of Nixon in 1960, Gray left government service for a position at Hill & Knowlton (H & K), a major public relations and lobbying firm that had been launched in the 1920s by John Hill and Donald Knowlton. While H & K would become synonymous with the inner conflicts and flashy affairs of the DC Beltway – with clients including everyone from presidential hopefuls to BCCI – in the early days, it was a Cleveland-based company with a particular focus on the local steel industry and the banks that financed it.6
In the aftermath of World War II, H & K became a major promoter of the aviation industries that were then benefitting from the fusion of American heavy industry and the US military. John Hill, for example, was a member of the Air Power League, a pressure group formed by a large coterie of businessmen and military officers with the goal of educating the public about aviation and raising support for the construction of “greater airport facilities and air training programs.”7 The league was closely aligned with the Aviation Industries Association (AIA), the major aviation trade association that H & K had taken on as a client. Such connections firmly ensconced H & K within the military-industrial complex, as the Encyclopedia of Public Relations makes clear:
“The [Aviation Industries Association] sought a steady diet of military appropriations for its member companies, and it promoted air safety, travel, and other aspects of civil aviation. After the war ended, military contracts took a nosedive, so the agency focused on convincing the federal government to audit the nation’s air policies and its readiness for another war. When both Congress and President Harry S. Truman set up commissions to review air policy, Hill & Knowlton helped industry officials prepare their testimony and publicize the board’s findings. Joining with the American Legion, the AIA sponsored a campaign, “Air Power is Peace Power,” beginning in 1947.”8
H & K was also linked, it seems, to the CIA. Robert Crowley, a longtime operator within the Agency’s Directorate of Operations, stated that the firm’s “overseas offices were perfect ‘cover’ for the ever-expanding CIA.”9 Crowley would have been in a position to know: he acted as the CIA’s “liaison” to the business world, which entailed the use of existing businesses as covers for agents abroad and the creation of proprietary firms to act as fronts.10 Crowley may even have helped bring a young George H.W.Bush into the CIA’s fold, as Bush’s Zapata Petroleum served as an Agency front for various Caribbean operations during Crowley’s time as an Agency liaison.11 Gray himself was likely tied directly to these efforts. When Edwin Wilson checked with the CIA’s Office of Security prior to adding Gray to the board of a CIA front called Consultants International, “he discovered that Gray had already been cleared by the spy agency – that Gray had previous clearances.”12
INSIDE THE GEORGE TOWN CLUB
During the 1960s Gray became aligned with a powerful bloc of interests known as the China Lobby. An early Cold War equivalent of today’s Israel Lobby, the China Lobby represented the Nationalist Chinese – the Kuomintang (KMT) – and their supporters in Washington. The China Lobby called for US support for Chiang Kai-Shek’s government in Taiwan against the Chinese Communists led by Mao Zedong. In its most extreme form, this support entailed militarized intervention in mainland China and elsewhere in Southeast Asia. As scholars such as Peter Dale Scott have shown, many of these activities set in motion a complex chain of events that later cascaded into the Vietnam War.13
One of the strongest actors in the China Lobby was Anna Chennault, who cultivated contacts with countless politicians, businessmen, military figures, and intelligence officers. She held positions on the boards of numerous companies and acted as an advisor to various US presidents. She also served as a diplomatic channel to the leaders not only in Taiwan but in South Korea, the Philippines, Japan, and elsewhere. Gray was particularly close to Chennault, though the exact details of how the two first met are unknown.
Anna Chennault’s husband had been Claire Chennault, the leader of the First American Volunteer Group – better known as the “Flying Tigers” – during World War II. With ranks drawn from the US military, the Flying Tigers trained at bases maintained in Burma before flying to China to fight Japanese forces alongside the KMT. From the late 1930s, Claire Chennault had served as a military advisor to Chiang Kai-Shek and his brother-in-law, the powerful T. V. Soong.
As previously detailed in Chapter 1, Claire Chennault was a very well-connected man and this included ties to the Roosevelt administration. After the war, the Chennaults became the core members of the China Lobby and, in those early years, managed an impressive airlift of “American relief supplies in China.”14 Central to this effort had been the creation of a new airline called Civil Air Transport (CAT). As previously noted, CAT would later morph into the CIA airline Air America, which would subsequently become the infamous Southern Air Transport.
There were also other airline companies in this mix. As was also noted in Chapter 1, an air freighter called Flying Tiger Lines was set up by a coterie of Claire Chennault’s former pilots, and Anna Chennault joined the company as its vice president of international affairs. Evidence suggests that Flying Tiger Lines was also utilized by the CIA, and its board of directors included individuals linked to organized crime.15 At the same time, Anna acted as a consultant to numerous large aviation concerns, including Pan American, whose interests directly intermingled with those of the CIA’s CAT/Air America complex.16 At any rate, Flying Tiger Lines remained squarely in the fold of the China Lobby and its numerous allies. “Over the years,” writes Susan Trento, “Flying Tiger … would evolve into World Airways, and Gray would become a board member.”17
Gray’s early political mentor, the future president Richard Nixon, was also an ally of the China Lobby. Many journalists and academics have identified Nixon as being a “member” of the lobby, but a 1992 academic paper suggests that his involvement with them was more pragmatic than ideological.18 He fostered good relations with Chiang Kai-Shek and T. V. Soong, which spilled over into business arrangements during the 1960s, when Nixon temporarily left politics for private law. One of his biggest clients was Pepsi, the Taiwanese interests of which were firmly held by members of Soong’s family.19
All of this provides a backdrop to the creation of the George Town Club in March 1966. Its main organizers included Gray, Park, and Chennault, along with Henry Preston Pitts, Lawrence Merthan, and General Graves B. Erskine. The Club was officially established “for the purpose of bringing together leaders who had an impact on the United States, and the world, through their work in various business, professional, civic, social and political milieus.”20 Pitts and Merthan, according to the Washington Post, worked alongside Gray at H & K at the time of the club’s founding.21 By the time the Koreagate hearings began in the late 1970s, Pitts had left H & K and gone to work for the US Information Agency, the once covert body set up during the Eisenhower administration to direct “public diplomacy” and Cold War propaganda.22
Erskine had a lengthy career in the world of intelligence and covert operations. In 1950, he ran the military wing of the Survey Mission to Southeast Asia, which brought him into close contact with the anti-Communist interests that were aligned with the domestic China Lobby. Working closely with representatives of Nationalist China, he developed a military strategy to support KMT fighters in Burma and their allies in Thailand. This was the birth of Operation Paper, which marshaled the resources of CIA operatives such as the mob-linked banker and OSS veteran Paul Helliwell.23 Arms flowed to Thailand and Burma aboard ships chartered by Sea Supply, a front company organized by Helliwell, while others were procured through the shadowy World Commerce Corporation. Peter Dale Scott has argued that Operation Paper was a key point in the development of US intelligence complicity in the global drug trade – at the very least, it marked a major instance of intelligence’s indirect support for drug traffickers.24
In 1953, Erskine became the director of Special Operations at the Department of Defense. This put him in charge of an obscure office within the Pentagon that served as the liaison between the armed forces and the CIA. Here, Erskine oversaw an ever-increasing number of covert operations and special wars dotting the globe. Operating under Erskine was the infamous Edward Lansdale, America’s architect of guerrilla warfare and psychological operations in the post-war era. When Erskine suffered a heart attack in 1957 and took a protracted leave from the Special Operations office, Lansdale stepped in and ran it in his stead.
The intersection of the George Town Club’s membership with China Lobby interests and skilled operators in the world of covert intelligence was apparently unending. The manager of the club, for example, was Norman Larsen. Larsen had previously worked in the Washington offices of the Life Line Foundation, one of the charitable bodies owned by Texas oilman and financier of right-wing causes, H. L. Hunt.25 Other recipients of Hunt’s largess included Foreign Intelligence Digest, a private intelligence magazine organized and edited by Douglas MacArthur’s former intelligence chief, Charles Willoughby.
While Willoughby operated far from the environs of the George Town Club, numerous authors have highlighted his linkages to the wider China Lobby network. David Clayton, for example, writes that the lobby “was intrinsically tied to advocates of [a foreign policy of] rollback … and to MacArthur, through his intelligence chief General Charles Willoughby,” while Harvey Klehr writes that Willoughby was a “China Lobby ally.”26 And Peter Dale Scott writes that “others who used [Joseph] McCarthy to settle old scores included the Chinese Nationalists of the China Lobby, their spokesman Alfred Kohlberg, and General MacArthur’s Prussian-born intelligence chief in Japan, General Charles Willoughby.”27 The expansive nature of this network can also be illustrated by Norman Larsen’s membership in the International Youth Federation for Freedom, a “non-profit anti-Communist group” that appears to have had some working relationship with the CIA.28 The International Youth Federation for Freedom was founded by none other than Tongsun Park, along with his close friend and college roommate Douglas Caddy.
Park, in his Koreagate testimony, makes passing reference to Caddy, noting that Caddy – who would appear later in the course of the Watergate scandal by serving briefly as E. Howard Hunt’s attorney – had been the executive director of the Young Americans for Freedom. As noted in the previous chapter, Young Americans for Freedom had been organized by former CIA officer, close friend of Roy Cohn, and National Review founder William F. Buckley and counted Charles Willoughby on its advisory board.
When Park mentioned Caddy in his testimony, it was during a line of questioning concerning a man who later figured heavily in the clandestine espionage activities of Robert Maxwell: Senator John Tower. Tower, who was also a member of the George Town Club, had been particularly close to Park. “I was a friend of the [Tower] family,” Park stated, before noting Tower’s involvement in “helping Young Americans for Freedom, which was founded by one of my closest friends.”29 The “closest friend” alluded to here was Caddy.
A State Department telegram concerning the George Town Club reports that, for the first six years of its existence, the club had operated in the red. Nevertheless, it managed to stay afloat, apparently through the intercession of its owners. The governing board was “divided … equally between the Democratic and Republican parties.” The telegram goes on to state that, at the time, Clark W. Thompson had been serving as chairman of the club’s board. Thompson was the quintessential moderate Texas Democrat, having served for some three decades as one of the state’s representatives. Working both sides was Thompson’s forte. For instance, when it came to the issue of school desegregation, he broke with most of his colleagues who opposed it, while he also voted against the Civil Rights Acts of 1957 and 1960.
A careful examination of Thompson’s affiliations reveals links to the worlds of organized crime and intelligence. Thompson was married to the daughter of William Lewis Moody Jr., a key player in the world of Texas finance and insurance. Moody’s flagship firm was American National Insurance Company (ANICO), founded in Galveston, Texas, in 1905. The Moodys were briefly mentioned in the last chapter as Moody’s grandson, Shearn Moody Jr., was a close friend and client of Roy Cohn. According to a mutual friend of Cohn’s and Moody’s, the “eccentric” Moody supplied Cohn with “many little boys of the night,” which he also he did for other specific guests who visited his Texas ranch.30
Thompson had served on the board and as ANICO’s treasurer during the 1920s but departed when he entered politics. At the same time that he was serving as chairman of the George Town Club, he had rekindled ties to the conglomerate and was listed as its official lobbyist.31 Morris Shenker, best known as Jimmy Hoffa’s attorney, was also ANICO’s attorney for a time and he helped bring the insurance firm into the mob-dominated world of Las Vegas hotels and casinos. As Sally Denton and Roger Morris write, “ANICO … funneled untold millions into Las Vegas gambling interests, including $13 million to Shenker himself … and, most significantly, to Parvin-Dohrmann – the company that owned the Stardust, Aladdin, and Fremont.”32 It certainly helped that E. Parry Thomas, the man credited with establishing the Las Vegas strip, was closely aligned with Marriner and George Eccles, the offspring of a prominent Mormon banking and construction family (e. g., Marriner served as President Roosevelt’s Federal Reserve chief). George Eccles maintained a spot on the board of ANICO and nurtured ties to a number of ventures that were, at the very least, adjacent to organized crime.33
George Eccles was also affiliated with American Bankers Life Assurance Company, located in Miami, Florida, where the CIA’s Paul Helliwell served as its general counsel. Furthermore, the offices of American Bankers Life were used by Helliwell as headquarters for the Agency’s SEA Supply operation.34 In addition to this important CIA linkage, American Bankers Life also connected to Miami National Bank. As discussed in Chapter 1, Miami National “was identified in 1969 as having served between 1963 and 1967 as a conduit through which ‘hot’ syndicate money was exported by Meyer Lansky’s couriers and ‘laundered’ through the interlocking Exchange and Investment Bank in Geneva.”35
Clearly, the George Town Club was nestled within a wider network of entities and institutions that were very sensitive to Washington backroom politics, organized crime, and the CIA. Perhaps that is why, as reported in numerous accounts, the CIA became concerned that one of the main figures behind the club was Tongsun Park, a known asset of the Korean CIA. While the KCIA and the CIA were cooperating entities, the KCIA did engage in activities – such as those that later blossomed into the Koreagate scandal – that were seen as compromising US political figures and also seen as potentially disruptive for US geopolitical interests. As a result, the CIA dispatched an agent to monitor the club’s comings and goings. That individual was Edwin P. Wilson, a man who would become known as a “rogue” agent roughly a decade later, after he was linked to various terrorist and assassination plots.
A sizable portion of Wilson’s early career in the CIA entailed operating undercover as a staffer for the American Federation of Labor and the Congress of Industrial Organizations (AFL-CIO), the large union combine known as a proponent of “business unionism.” Since the Agency’s inception, the Agency and the AFL-CIO had worked closely together, with the union providing cover for agents and operations, while the CIA often subsidized the activities of the AFL-CIO’s foreign wings.36 Wilson worked in the office of Paul Hall, the head of the AFL-CIO’s Maritime Trades Department, which covered unions involved in shipping-related trades and industries. This was the beginning of Wilson’s long-running involvement in maritime activities.
After leaving the AFL-CIO, his work for the CIA involved the management of proprietary firms, many of which operated in the world of shipping, freight forwarding, and logistics. One of the first of these was Maritime Consultants, which had been set up in Washington, DC with CIA funds. According to Joseph Trento, “within months he was chartering barges to Vietnam, arranging cover in commercial businesses for CIA agents, and setting up businesses around the world. Using his maritime cover, Wilson did detailed surveys of nearly every port in Africa and the Pacific.”37 One wonders if Wilson’s involvement with the George Town Club had less to do with monitoring the activities of Gray, Park, and Chennault and more to do with managing the complexities of these covert maritime operations. It is certainly possible, given Gray’s own past with the Navy. In addition, Wilson’s business in Vietnam would have gained considerably from contacts with Anna Chennault, who was closely connected to the government and elsewhere in Southeast Asia. At any rate, the arrival of Wilson at the George Town Club marked the beginning of a long association between him and Gray.
There were, for example, their trips to Taiwan, where each had business interests – interests that, in all likelihood, were interrelated. Wilson gained lucrative contracts from the Nationalist Chinese military, while Gray signed on the Taiwanese government as a client. The account was entrusted to George Murphy, an actor who became a US Senator representing California, but, at the time, was an H & K employee. Curiously, Gray routed the work through a separate company that he set up specifically for these purposes, called GM (presumably for Gray-Murphy). Susan Trento writes that “according to Wilson, Gray set up … GM to handle the Taiwanese account. Since Anna Chennault trusted Murphy, Gray put the senator in charge of GM.”38 Murphy, unsurprisingly, was a member of the George Town Club.
Some of Wilson and Gray’s joint activities dovetailed with those of the CIA. Gray was a board member of Consultants International, a firm that Wilson managed from offices adjacent to those of H & K on K Street in the capital. Gray later disavowed knowing Wilson and stated that he had been added to the board of Consultants International without Gray’s knowledge. Gray’s account is hard to believe and many of those embedded in this network, including H & K employees and Wilson himself, have pushed back against Gray’s interpretation of events. At any rate, Consultants International was not simply a consultancy firm. It was also an Agency proprietary firm, set up as a successor to Wilson’s earlier CIA front company, Maritime Consulting.39
There are plenty of hints and suggestions that Gray, Wilson, Park, and the byzantine web of China Lobby activists and intelligence operatives that circulated around the George Town Club were involved in more than just social networking and the creation of lobbying groups. Eavesdropping and blackmail seem to have been part of the club’s covert mandate. Future Reagan national security advisor Richard Allen – who would have known Gray through the involvement of each in the Heritage Foundation – suggested when interviewed by Susan Trento that the club was bugged.40 Jim Hougan, in his classic Secret Agenda, points to even darker possibilities. He writes that he was informed in a letter from Frank Terpil, Wilson’s longtime partner, that Wilson had used the club to collect dirt on prominent Washington politicians and businessmen by using it as a place to “arrange trysts for the politically powerful.”41 He quotes from the letter:
Historically, one of Wilson’s Agency jobs was to subvert members of both houses [of Congress] by any means necessary.… Certain people could be easily coerced by living out their sexual fantasies in the flesh.… A remembrance of these occasions [was] permanently recorded via selected cameras, I’m sure for historical purposes only. The technicians in charge of filming [were] TSD personnel. The unwitting porno stars advanced in their political careers, some of [whom] may still be in office. You may now realize the total ineffectiveness of the “Watchdog Committees” assigned to oversee clandestine operations.42
Former Nebraska state senator John DeCamp, in his work on the Franklin scandal (the subject of chapter 10), alleges that Gray was the “closest friend in Washington” of Harold Andersen, the publisher of the Omaha World Herald who was alleged to have played a role in that scandal, which dealt with a politically-connected, nationwide pedophile ring.43 DeCamp also notes that Andersen was one of the key Nebraskans who was closely tied to the man at the center of Franklin scandal, Larry King, who was also actively aided by George H.W.Bush in rehabilitating his post-scandal image.44
DeCamp, who attempted to expose government efforts to sweep the scandal under the rug in The Franklin Cover-Up, also asserted that Gray himself was “reportedly a specialist in homosexual blackmail operations for the CIA.” DeCamp also wrote that the sexual-blackmail operations in which Gray’s associate Edwin Wilson was intimately involved were “apparently continuing the work of a reported collaborator of Gray from the 1950s – McCarthy committee counsel Roy Cohn.”45 Cohn and Gray reportedly knew each other, but the exact nature of their relationship is difficult to discern. They were, however, most certainly intimately acquainted during Ronald Reagan’s 1980 presidential campaign, when both men worked closely with William Casey, who was the campaign’s manager and subsequently Reagan’s CIA director. Shortly after the campaign, Cohn, Gray and Jeffrey Epstein would all take on arms dealer Adnan Khashoggi as a client at the dawn of the Iran-Contra affair.
THE CIA’S BLONDE GHOST
Edwin Wilson ostensibly left the CIA in 1971 under incredibly murky circumstances, though the most common story involves his commercial cover being blown by a Soviet asset. Per the media narrative that was spun during the course of the manhunt for Wilson and his subsequent imprisonment, Wilson is said to have cut ties with the Agency and become a covert private operator for hire – a “rogue.” Yet, evidence released not only during his trial but well after its conclusion shows that Wilson remained in close contact with a cadre of CIA officers and officials whose activities, as the 1970s wore on and the Agency was battered by reformists’ efforts, took on increasingly strange and frightening forms. This circle was centered around the man known as the “blonde ghost,” Theodore “Ted” Shackley.46
Shackley, like Wilson, came from a background somewhat different from the usual CIA leadership, which tended to cultivate its upper ranks from the posh world of white-shoe law firms and high finance. He instead hailed from Florida and began his career in the Army; his recruitment into the CIA came after a stint in the Army Counterintelligence Corps. By 1953, he was working under William Harvey at the West Berlin CIA station. Here, Shackley operated at the very frontier of the Cold War: the West Berlin station’s activities were carried out under the shadow of the Berlin Wall, and the city was a veritable melting pot of espionage intrigue. While working under Harvey, Shackley may have gotten a taste for the more “exotic” aspects of CIA work. After he returned to the States, Harvey managed a CIA assassination team – with many of its members having been mob hitmen recruited into Agency service under the auspices of the ZR/RIFLE program.
Harvey’s assassination activities were woven into Operation Mongoose, the joint CIA-Army covert war against Castro’s Cuba. The central hub of the CIA’s side of the anti-Castro operations was the Miami station, code-named JM/WAVE. Tucked away in an unassuming building on the extended campus of the University of Miami, the station “employed from 300 to 700 agents and 2,000 to as many as 6,000 Cubans.”47 In 1962 – right as the CIA’s Cuban project was spiraling toward its violent apex – Shackley became JM/WAVE’s station chief. Joseph Trento asserts that, in this period, Shackley was mentored in the fine of art of covert financial activities by Paul Helliwell: “Helliwell showed Shackley … the importance of income from Agency fronts. According to numerous case offices who worked at JM/WAVE, Helliwell helped Shackley make certain that fronts like Zenith Technical Enterprises were the perfect cover for JM/WAVE.”48
These allegations are partially corroborated by other sources. The Washington Post, for instance, reported in 1980 that Helliwell “was instrumental in helping to direct a network of CIA undercover operations and ‘proprietaries.’”49 Curiously, one of the only declassified CIA documents to mention Helliwell is a list of files removed from internal circulation in order to avoid turning them over to Watergate investigators.50 Almost all of the other files in the list deal directly with the CIA’s support of anti-Castro Cuban exiles.
JM/WAVE was where Shackley formed close relationships that would shape the rest of his long career, both inside the Agency and out. Chief among Shackley’s alliances that were forged via JM/WAVE was with Thomas Clines, who later emerged as a key player in the Iran-Contra conspiracy. Clines served as Shackley’s deputy, even after both men stepped beyond the confines of the CIA itself. There was also a score of Cuban exiles: the notorious Felix Rodriguez (known for his involvement in the death of Marxist revolutionary Che Guevara and his own role in Iran-Contra), Rafael Quintero, and Ricardo Chavez. Many of these individuals followed Shackley overseas in 1966, when the “blonde ghost” was made the CIA station head in Vientiane, Laos. It was a perfect spot for a crew that was increasingly adept at “wetworks” (i.e. assassinations) and black operations. This particular station oversaw the Agency’s participation in the secret war being waged within Laos and Cambodia.
Vientiane, during this period, was the epicenter of a major illicit trade in contraband, gold, and raw opium, most of it destined for Saigon.51 Laos boasted a handful of prominent opium merchants with deep ties to the country’s political and military establishment. One of these merchants, Ouane Rattikone, had previously commanded the Laotian army, and his drug trafficking operations saw extensive collaboration with Nguyen Cao Ky, the high-ranking commander of the South Vietnamese Air Force. Not only were Ky and his men moving raw opium from Laos on their planes, but Ky was also working closely with the CIA in their secret war efforts such as Operation Haylift, which dropped saboteurs deep into the jungles of North Vietnam.52 The raw opium was refined into heroin and then moved into Hong Kong, where it was readied for global export.
This circuit was of immense interest to American organized crime figures. In 1965, Meyer Lansky’s financial agent John Pullman flew to Hong Kong, reportedly to investigate the burgeoning wartime trade. Several years later, Florida mob boss Santo Trafficante arrived in Hong Kong and soon made his way to Saigon. “Soon after Trafficante’s visit to Hong Kong,” writes Alfred McCoy, “a Filipino courier ring started delivering Hong Kong heroin to Mafia distributors in the United States. US Bureau of Narcotics intelligence reports in the early 1970s indicated that another courier ring was bringing Hong Kong heroin into the United States through the Caribbean, Trafficante’s territory.”53
The presence of Trafficante is telling. He had been an active supporter of the anti-Castro operations, and after the Agency wound down its JM/WAVE activities, many Cuban exiles trained by the CIA as part of that program went to work trafficking drugs for Trafficante. Was Shackley involved in some way with Trafficante’s arrival in Southeast Asia? It is possible, as there are plenty of apocryphal stories about Shackley personally introducing Trafficante to Vang Pao, a Laotian heroin warlord, during a 1968 trip to Saigon. While the details of those stories cannot be confirmed, Vang Pao would have had to have known of Shackley, as he commanded the Hmong troops that were being backed and trained by the CIA in Laos.
According to McCoy, the CIA’s logistical networks allowed Vang Pao to increase the efficacy of the Laos-South Vietnam opium trade:
Air logistics for the opium trade were further improved in 1967 when the CIA and USAID … gave Vang Pao financial assistance in forming his own private airline, Xieng Khouang Air Transport. The company’s president, Lo Kham Thy, said the airline was formed in late 1967 when two C-47s were acquired from Air America and Continental Air Services. The company’s schedule was limited to shuttle flights between Long Tieng and Vientiane that carried relief supplies and an occasional handful of passengers. Financial control was shared by Vang Pao, his brother, his cousin, and his father-in-law.… Reliable Hmong sources reported that Xieng Khouang Air Transport was the airline used to carry opium and heroin between Long Tieng and Vientiane.54
This was the crucial context for the formation of a group that would later be known as Shackley’s “private CIA.” On hand in Laos was Thomas Clines, and there they soon became acquainted with another future Iran-Contra co-conspirator – Richard Secord. An Air Force pilot, Secord had been detailed to the CIA’s Laotian station and he personally knew many of those involved in the traffic of opium via the airways, including the aforementioned Air Marshal Ky.55 Another figure, who would also later play a key role in the Iran-Contra affair and who also worked with Shackley in Laos was Major John K. Singlaub. Singlaub had served alongside Paul Helliwell in the OSS.
Playing an active role in logistical support for the Agency’s secret war was Edwin Wilson. Much of this involved a close working relationship with the head of the Southeast Asian division of the CIA’s Air America, James Cunningham, who also ultimately answered to Shackley.56 Though Wilson was not stationed in Southeast Asia, he frequently made trips between Washington and Vientiane. There can be little doubt that these jaunts of his were of immense interest to Gray, Park, Chennault, and other members of the China Lobby who populated Wilson’s inner stateside circle. The China Lobby, after all, was wired into the world of intelligence and had stumped for the escalation of conflict in Southeast Asia, an escalation that finally erupted into the Vietnam War.
In 1968, Shackley took over the Saigon CIA station, which gave him operational oversight of a vast gamut of operations – including, for a period, the infamous Phoenix Program. The Phoenix Program, while financed by the CIA, operated under the auspices of CORDS (Civil Operations and Revolutionary Development Support). Overseeing CORDS was the CIA’s old Southeast Asian hand and bureaucratic mastermind, William Colby. Rumors among the military’s in-country brass abounded that Shackley exerted influence over Colby through sexual blackmail. Clearly, Shackley and Wilson, alleged to have been carrying out similar activities at the George Town Club, were quite similar in this regard:
Colby, then married to his first wife, returned to Vietnam without his family from a stint back in Langley. According to retired US Army Colonel Tullius Accompura, who served in Vietnam, Colby had a girlfriend, a Vietnamese senator’s wife. Shackley’s colleagues soon realized that Shackley was keeping a book on the private lives of all of his superiors in Vietnam, including Colby and military officers such as General Creighton Abrams, who, according to Accompura, was involved with a Vietnamese woman. If pressed upon an undesirable topic by a colleague, Shackley would warn him off by mentioning any personal entanglements. As John Sherwood put it: “He was good at letting you know he knew, that he had something on you, that he had an edge.”57
Shackley remained in Saigon until May 1972, when he took over as head of the CIA’s Western Hemisphere Division. Since Cuba fell under the rubric of this division, it was something of a return for Shackley to his earlier haunts. Yet, by this point, the anti-Castro operations had largely fallen by the wayside. There was still operational support for Cuban exile groups, many of which were factionalizing into militant terrorist groups such as Coordination of United Revolutionary Organizations (CORU). The Agency’s eyes were darting farther south, toward Southern Cone countries like Chile, where socialist leader Salvador Allende had come to power. From his perch at the top of the Western Hemisphere Division, Shackley was on the bureaucratic frontline for the 1973 coup that brought Augusto Pinochet to power in Chile and the parade of dirty wars that ripped across South America.
Even before Shackley left Saigon, his network of contacts was busy making arrangements. Thomas Clines – who would soon be embroiled in the Agency’s ventures in Chile – had left Saigon in 1970 and rotated back stateside to spend time at the Naval War College. Joining him there was Richard Secord. Secord, in this period, completed his War College thesis, which had been directed by the “CIA advisor to the president,” Clarence Huntley. The prescient title of his thesis was “Unconventional Warfare/Covert Operations as an Instrument of US Foreign Policy.”
Throughout 1971, Clines kept in touch with Edwin Wilson, who was now allegedly operating outside of the CIA’s purview. It was at that point that Clines brought Wilson into the realm of naval intelligence by way of a secretive unit known as Task Force 157.
TASK FORCE 157
The groundwork for what became Task Force 157 (TF-157) was laid in 1965 by a memo drafted by President Johnson’s secretary of the navy, Paul Nitze. Titled “Instructions for the coordination and control of the Navy’s clandestine intelligence collection program,” Nitze’s program for a naval human intelligence (HUMINT) gathering apparatus had originated with plans made by Admiral Rufus Taylor.58 Taylor had served in the Office of Naval Intelligence (ONI) as well as the National Security Agency (NSA). In 1966, as this new Navy unit was being prepared for action, he took up a post as deputy director of the Defense Intelligence Agency (DIA). Later that same year, he became deputy of director of the CIA, serving under Richard Helms.
The first iteration of the Navy’s HUMINT unit, established in 1966, was the Naval Field Operations Support Group. Author Michael McClintock suggests that the original template for the unit was Task Force 98, a Navy program that supported the Southeast Asian paramilitary activities carried out by Ed Lansdale and Lucien Conein.59 By July 1966, the Support Group was given the mandate to establish “a worldwide intelligence collection organization while preserving non-intelligence attributability of collection operations.”60 Internal Navy communiqués and information sharing identified the Support Group by name; soon, to help obscure the organization’s activities, it was granted the code-name “Task Force 157.”
TF-157’s primary focus was “intelligence information on Communist Bloc Naval and shipping information.”61 Subunits were devised and located across the world; many of these were located in ports, adjacent to shipping channels and choke points for maritime traffic, and even out at sea. Just as the CIA deployed commercial covers for their operations, TF-157 set up front companies to charter ships and maintain offices. Listening posts were established, and TF-157 worked closely with the military and the CIA in developing improved navigational maps for the support of military activities. TF-157 even maintained its own international communication system based on encryption technology inherited from the NSA, which was code-named the “Weather Channel.”62
TF-157’s operational autonomy was only partial. It answered to both the Office of Naval Intelligence and the CIA. Though, between the two, the Agency apparently had an edge for nabbing the various projects that TF-157 developed. When it came to organizing the networks of proprietary companies, it was again to the CIA that TF-157 turned. “Ed Wilson is the man you need,” the CIA told the task force.63 Wilson, meanwhile, learned of TF-157 from Thomas Clines, presumably with Ted Shackley lurking not far in the background.64 Soon enough Wilson was on the TF-157 payroll, making an annual salary of $32,000. Despite his official salary, Wilson quickly became a multimillionaire.
This was because TF-157 allowed him to keep earnings from the commercial fronts he set up, which he operated as legitimate businesses. Two of the new front companies were World Marine Inc. and Maryland Maritime Co. They were registered in DC and were run from the same offices as Consultants International – the same company where Robert Keith Gray sat on the board of directors.65 There was also Aroundworld Shipping & Charting, based in Houston, Texas, where Wilson spent a considerable amount of time. Whether Aroundworld was tied to TF-157 like World Marine and Maryland Maritime or a CIA-adjacent firm like Consultants International is unknown, but it later played a key role in the activities of Shackley’s “private CIA.” As Wilson was settling into his new position, TF-157 was becoming embroiled in one of the major foreign policy shifts of the Cold War era. Nixon and Kissinger, as part of a broader geopolitical push for detente – a relaxing of tensions with the Soviet Union and China, alongside curbing the nuclear arms race – were pushing for an opening with China. The initiative was treated with the utmost secrecy: while Alexander Haig was involved in the efforts, the Joint Chiefs of Staff and the CIA were largely boxed out. For Kissinger, the success of these China-focused efforts would require the diplomatic channels and corridors of information to be airtight.
Kissinger appealed to Admiral Thomas H. Moorer, then serving as chairman of the Joint Chiefs of Staff. Moorer had previously been the chief of Naval Operations and thus had had operational involvement with TF-157. Moorer arranged for Kissinger to use the Weather Channel to send encrypted messages and arrange the necessary diplomatic back channels for this impending geopolitical shift. What Kissinger did not seem to realize was that Moorer opposed Kissinger’s bureaucratic wrangling and Nixon’s overarching imperative of circumventing the usual bastions of political power. Moorer also strongly opposed the initiative itself and was allied with elements of the pro-KMT China Lobby.
THE RADFORD-MOORER AFFAIR
Yeoman Charles Radford barely knew Jack Anderson, the famed muckraking journalist. He was actually more familiar with Anderson’s parents, whom he had met during a posting in India in 1970. Radford had been raised Mormon, a faith he shared with the Andersons, and this seems to have kindled a casual friendship between the young naval officer and the older couple. In 1970, Radford briefly crossed paths with Jack Anderson himself, having been invited by his parents to a family reunion. It seemed innocuous enough.
The second time Radford met Anderson was over a year later, in December 1971. Anderson, out of the blue, had contacted Radford and invited him to dinner at the Empress, a Chinese restaurant in which he owned a stake. Radford later told Jim Hougan that the reason he took Anderson up on his offer was “because he was Jack Anderson. He was famous.”66 The dinner took place on a Sunday evening. The following day, Anderson ran in his newspaper column – renowned for the journalist’s intrepid pursuit of insider sources in the fast-paced world of DC – an article that contained explosive revelations.
Anderson’s column brushed right up against the most sensitive undertaking then being carried out by President Nixon – Henry Kissinger’s secret diplomatic negotiations with China. One primary channel being used by Kissinger was Pakistan, which had historically maintained close geopolitical relations with China. Pakistan’s president Yahya Khan was especially close to Beijing and had garnered extensive military aid from China in the face of Pakistan’s rising hostilities with India. China, likewise, had reason to oppose India. Tensions with the Soviet Union had been escalating steadily since the Sino-Soviet split, and Moscow had thrown its weight behind India. The chessboard was full, and Nixon and Kissinger were stepping carefully into a complex and potentially dangerous position.
Pakistan’s conflict with India greatly complicated matters for the administration: outwardly, it took a position of neutrality. In 1971, when martial law was imposed in East Pakistan by President Khan, the White House made an announcement: “The United States does not support or condone this military action.” Behind closed doors, however, it was a very different story. Nixon and Kissinger had embarked on a covert path of “tilting” toward Pakistan. President Khan was assured that the administration would “not do anything to complicate the situation … or embarrass him.”67
What was unfolding was a truly remarkable series of events. Nixon’s rise to the Oval Office had been dependent on the support of the domestic China Lobby, and he personally maintained close relations with the KMT’s top leadership. The Kissinger-led initiative toward China undermined all of that. In the course of his ongoing negotiations with China, Kissinger was tacitly abandoning the hawkish iterations of a pro-Taiwanese foreign policy. The administration, he said, wasn’t looking for a “two Chinas” solution or a “one China, one Taiwan” solution.”68 There was also talk of committing the US military to an exit strategy from Vietnam and a reduction of the US troop presence in the Middle East.
The diplomatic channels of these negotiations were fragile, complex, and, most of all, secret. Nixon and Kissinger strove to keep the agenda hidden. The CIA, the State Department, the Joint Chiefs, the China Lobby itself – and even Soviet interests – were recognized as threats to the long-term plan. But Anderson, in his column, nearly scuttled it all. In a single article, he revealed that, despite the carefully calculated public position of neutrality, the “tilt” toward Pakistan was well underway. It threatened to reveal the diplomatic back channel while also putting a question into people’s minds: Why, exactly, was the US tilting toward Pakistan?
Journalist Clark Mollenhoff – who served as special counsel to Nixon in 1969 – summed up the implications of Anderson’s reporting in a column published on January 22, 1972. “Kissinger’s role in the India-Pakistan policy seems to be faulty,” he wrote, before adding that “there is a question of why the administration was secretly advocating a ‘tilt for Pakistan’ when India was able to prove far quicker its overwhelming military superiority.”69 Mollenhoff then sketched out what he saw as the “bigger picture,” implicating Nixon and Kissinger’s drive toward extreme bureaucratic compartmentalization:
At both the State and Defense departments, there is hope that President Nixon will view these errors as evidence that some changes are needed in the National Security Council’s method of operations. Both departments point out that this isn’t the first time the National Security Council decisions haven’t been supported by a realistic appraisal of the facts.”70
Within the corridors of power, Anderson’s revelations of the “tilt” strategy set off a firestorm. It was quickly determined that the journalist must have had access to at least three memos – memos that were highly secret and had only been issued to a handful of people. Those people were Kissinger himself, Alexander Haig, Admiral Robert O. Welander (the military assistant for national security affairs to the chairman of the Joint Chiefs of Staff, Admiral Moorer), and Welander’s assistant, Yeoman Charles Radford. Welander eliminated himself from suspicion for the leak, as well as Kissinger and Haig. The culprit had to have been Radford; yet, what happened next only increased the strangeness of the case.
Radford, who had acted as a document courier and aide to members of the Joint Chiefs of Staff and the National Security Council, was subjected to a polygraph test by a Pentagon interrogation specialist.71 When it came to questions concerning the theft of confidential memoranda from diplomatic pouches and burn bags, the yeoman became agitated. “The cause of his concern was a very sensitive operation,” writes Colodny, which Radford “could not discuss without the direct approval of Admiral Welander.”72 Welander had initially kicked off the investigation into Radford. With allegations of a secret operation surfacing, however, he moved quickly to try to squash the investigation before it went any further. The attempt did not succeed, and Radford ended up revealing his role in a military-led espionage ring.
The yeoman had pilfered confidential files and made copies of “uncounted documents – just thousands, thousands of documents.”73 He made notes on reports of Kissinger’s meeting with Chinese premier Zhou Enlai and other sensitive documents related to the “China initiative.” These were then turned over to people working for the Joint Chiefs of Staff, who used them to learn the inner workings of the Nixon-Kissinger strategy, bypassing the carefully constructed blockages on the flow of information within the top tiers of the US government.
Radford would turn the documents over to Admiral Welander who, in turn, gave them to Admiral Moorer. According to Radford, his contribution “put Admiral Moorer in a very powerful position [to] anticipate what Kissinger was going to do and say” in National Security Council meetings.74 Welander later hinted that Alexander Haig was involved in the ring as well. There was little doubt, he suggested, that Haig had known of Radford’s meddling with the diplomatic pouches – and Haig himself had, at times, assigned Radford to accompany Kissinger on diplomatic trips.
According to Radford, the whole operation was designed to thwart a wide-ranging conspiracy that was taking root at the highest levels of the foreign policy establishment. At the center of the conspiracy was Kissinger himself, here appearing as an alleged agent of the Rockefeller family and the institution where the Rockefellers carried so much weight, the Council on Foreign Relations. “The purpose of this alleged conspiracy,” writes Jim Hougan, “was to win the Soviets’ cooperation in guaranteeing the Rockefellers’ ‘continued domination’ over the world’s currencies – in exchange for which, Radford insists, Kissinger was to construct a foreign policy that would ensure eventual Soviet hegemony and a one-world government.”75 The source of his knowledge about this conspiracy, Radford said, was Welander and Moorer.
The accusations being made by Radford echo those being made by the John Birch Society and other groups and actors operating in that same milieu – many of which were also intimately connected to the KMT–China Lobby. (The aforementioned Charles Willoughby, for example, made this world his primary haunt.) Many of the accusations made by John Birch Society affiliates – that Kissinger himself was a Soviet mole – appeared later in the 1970s, with Frank Capell’s Henry Kissinger: Soviet Agent and Gary Allen’s Kissinger: The Secret Side of the Secretary of State. (Capell, in the 1960s, had worked for Willoughby’s Foreign Intelligence Digest.) What makes this important is that Moorer himself had maintained extensive ties to the John Birch Society and related groups. These ideas intensified in the later part of the 1970s and the 1980s, when he became affiliated with the American Security Council, the preferred outpost of military hawks who laid the intellectual groundwork for the so-called Reagan revolution.
There are two puzzling loose threads that are evident when considering the Radford-Moorer affair. The first is that, due to Kissinger’s use of the TF-157 Weather Channel, Moorer and the Joint Chiefs were already privy to much of the information concerning the China initiative. Likewise, through Edwin Wilson’s arrival at TF-157, there is the distinct possibility that the CIA was also listening in and perhaps, as well, Wilson’s KMT–China Lobby friends. It is through the China Lobby, and the incestuous networks of defense hawks, military operatives, and Washington fixers that these two sides met. Was this network the original source of Moorer and Welander’s manipulation of Radford?
The second loose thread is that Radford, while admitting to pilfering thousands of pages of sensitive documentation, fervently denied having leaked the documents to Jack Anderson. He disavowed a close association with the journalist, noting that they had only met a handful of times and were distant acquaintances at best. If it is true that Radford had not leaked the documents, who did and for what ends?
A likely answer is that Welander or Moorer or somebody working on behalf of them was responsible for the leak. With the information gained from both the access to the TF-157 channels and through Radford’s pilfering, they had an inside look at the “tilt’” strategy and its position within a wide-ranging geopolitical calculus that threatened to shift the entire thrust of the Cold War. Perhaps by hanging their asset Radford out to dry they had hoped to derail Kissinger’s process through a calculated leak to Anderson. But what about Anderson himself? His appearance with Radford at the Empress would then suggest that he was at least partially complicit in this plot.
Surprisingly, Anderson boasted longstanding ties to the China Lobby. He seemed particularly close to Anna Chennault: the two had been cofounders of the Chinese Refugee Relief Organization, a pro-KMT humanitarian agency that maintained offices at 1612 K Street. This office was just down the street from Robert Keith Gray’s H & K and the offices of Wilson’s TF-157 fronts. When the organization was operational, Chennault played the role of president and Anderson served as its secretary.
There is also the fact that a column of Anderson’s had been used to hint at John F. Kennedy’s connection to the Stephen Ward-connected sex ring that sparked the Profumo Affair. As mentioned in the last chapter, Anderson had co-written in the column “Britishers who read American criticisms of Profumo throw back the question ‘What high American official was involved with Marilyn Monroe?’” Which was apparently part of a Hoover-connected effort to use sex blackmail obtained from the broader networks woven throughout the Profumo Affair against Kennedy. This suggests that Anderson’s column had, on certain occasions, been weaponized by powerful political factions well before this particular column in the early 1970s.
It is also worth noting that, in the post-Watergate era, Anderson held accounts at – and stock in – Diplomat National Bank in DC, where Anna Chennault sat on the board of directors. The bank was used as a conduit for the Korean CIA and the closely related Unification Church, which – like Anderson – held bank stock.76 Never one to be far from the action, Tongsun Park “told American friends that he was behind the bank and that [bank chairman Charles] Kim was his agent.”77 This wasn’t the only suspect bank that Anderson was connected to. During the 1960s, he owned “complimentary shares” of the District of Colombia National Bank, which had been organized by Democratic Party fixer Bobby Baker and Ed Levinson, a notorious organized crime insider.78 Joining Anderson at this bank was Arthur Arundel. Arundel – who had served under Edward Lansdale in Southeast Asia – was the son of Pepsi lobbyist Russell Arundel. As mentioned earlier, Pepsi itself was closely tied to the China Lobby and to the KMT itself.
Even the restaurant used to implicate Radford can be found within this matrix. Anderson, as mentioned, had a stake in the establishment – yet so did Anna Chennault. These connections between Anderson and the China Lobby, curiously enough, are known thanks to a dossier on the journalist compiled by the White House “plumbers.” Soon enough the “plumbers” would be making history, and Anderson would be there too. There is every indication that he, like so many others in this bizarre world, had foreknowledge of the events that were about to take place, which would later be remembered simply as “Watergate.”
BLACK BAGS AND INSIDE JOBS
In April 1972, Jack Anderson received a dossier from William Haddad with information on plans being concocted by the “November group” – “President Nixon’s personal advertising agency” – to burglarize the Democratic National Committee (DNC) headquarters at the Watergate and other schemes: surveillance, dirty tricks, and the like.79 Anderson, for reasons that still remain vague, appears to have effectively suppressed this information, and he later mischaracterized the information that Haddad had provided to him.
Others who were provided information by Haddad took it a little more seriously. A month before Anderson was brought into the fold, Haddad had alerted the DNC’s head, Larry O’Brien, who in turn put Haddad in touch with the DNC director of communications John Stewart.80 In late April, Stewart, Haddad, and Haddad’s source, a private investigator named A. J. Woolston-Smith, met in New York City to discuss the accusations. This was roughly a month prior to the first of the break-ins at the Watergate complex.
William Haddad and A. J. Woolston-Smith were by no means strangers to intrigue. Haddad was a longtime political insider within the Democratic establishment and had been particularly close to the Kennedy family. He held various bureaucratic positions, married a Roosevelt daughter, and made a name for himself as a muckraker. It was through the latter role that he became close to Woolston-Smith, whom he employed from time to time. Woolston-Smith had previously worked for Robert Maheu’s private detective firm and worked with the CIA on its resettlement programs for Cuban exiles. Maheu himself was no stranger to the CIA’s secret wars on Cuba – a background shared by countless individuals interwoven in the Watergate saga – and some investigators have compiled considerable evidence implicating him in the 1968 assassination of Robert F. Kennedy.81
Woolston-Smith likely came upon the information concerning the DNC via convoluted networks that snaked across the often incestuous world of private investigators and security firms. As Jim Hougan details, “Woolston-Smith’s secretary, Toni Shimon, was the daughter of a Runyonesque former Washington police detective named Joseph Shimon. A convicted wiretapper in his own right, Shimon was the partner of one John Lenn in a detective agency named Allied Investigators Inc. One of the investigators with whom Shimon and Lenn were allied on a part-time basis was Louis James Russell.”82
Russell supplied tips to Jack Anderson and, in late 1971, was employed by General Security Services. This was the company hired by the DNC to run security at their Watergate offices, and they would have been the ones tasked with handling the information Haddad had provided. Shortly after Haddad notified the DNC of Woolston-Smith’s information, Russell resigned from General Security Services and went to work for McCord Associates, the security consulting firm owned by “former” CIA operative James McCord. At that time, McCord was serving as the head of security for the Committee for the Reelection of the President (CRP), the fundraising body for President Nixon’s re-election campaign. Russell, too, worked part-time for CRP.
McCord was one of the White House “plumbers,” the team put together to plug, prevent, and investigate information leaks, which were endemic in the highly paranoid world of 1970s Washington, DC. Operating alongside him was former FBI agent G. Gordon Liddy and E. Howard Hunt, another CIA veteran. Yet another CIA man in “the plumbers” was Frank Sturgis, who had served alongside Hunt in the Agency’s anti-Castro operations. When McCord and Sturgis were arrested in the Watergate DNC offices in July 1972, they were accompanied by a group of CIA-trained Cuban exiles: Virgilio Gonzales, Bernard Baker, and Eugenio Martinez.
There are a few things about McCord’s background that are worth mentioning. After a time in the FBI, he joined the CIA, taking a position within the CIA’s Office of Security – the in-house body that monitored the internal security of the Agency, ran counterintelligence operations, and provided cover or support for some of the CIA’s most sensitive operations. Specifically, McCord was assigned to the Security Research Staff within the Office of Security. There, he honed the craft of electronic eavesdropping, surveillance, and “audio countermeasure programs” to protect sensitive CIA stations and outposts in Europe.83 These were all of the sorts of techniques that were brought to bear in the course of the Watergate burglary. They also raise some important questions – for example, if McCord was an adept at these sorts of affairs, why were the burglaries so remarkably sloppy?
McCord had also served as deputy to Paul Gaynor, the longtime head of the Security Research Staff and a powerful figure within the CIA as a whole. From his commanding place within the Office of Security, Gaynor played an essential role in some of the CIA’s darkest projects, such as Project ARTICHOKE – a “special interrogation” program that, with its focus on hypnosis, sensory deprivation, chemical substances, and “psychological harassment” that was the immediate forerunner of the notorious MK-ULTRA program.84 The groundwork for ARTICHOKE had been laid by an earlier project, BLUEBIRD, described in CIA files as experiments involving “drugs and hypnosis.”85 Jim Hougan writes that Gaynor was reputed to have maintained an extensive array of files on US citizens, with a particular focus on sexual proclivities; these files were known around the Agency as the “fag files.”86 These allegations can be found among the statements made in the 1975 official report of the Rockefeller Commission, an entire section of which is dedicated to the file systems maintained by the CIA’s Directorate of Operations. One telling passage of the report reads:
Miscellaneous files maintained by the Office of Security includes lists of individuals with known or suspected foreign intelligence connections, files associated with handling defectors (some of whom may now be US citizens), lists of individuals from whom crank calls have been received by the Agency, and lists of persons previously charged with security violations. The Office of Security formerly maintained extensive computer lists of approximately 300,000 persons who had been arrested for offenses related to homosexuality, but these lists were destroyed in 1973.87
Gaynor’s proclivity for dirt collecting – particularly of the sexual variety – brought him into contact with Roy Blick, the head of the Washington Metropolitan Police’s so-called morals squad until he was forced into retirement in the mid-1960s. The morals squad, which today would be called the vice squad, conducted a series of anti-homosexual campaigns under Blick’s leadership. According to author Anna Lvovsky, Blick had a penchant for targeting politicians and other people of influence across the Beltway.88
His crusading zeal to target homosexuals in the area frequently became the butt of jokes for those in the know. E. Bennett Williams, a DC attorney who appeared in the periphery of the Watergate affair, liked to perform a short routine for the denizens of the after-hours Atlas Club. He would “imitate Blick standing at the urinal for hours, hoping, praying that a ‘queer’ [Blick’s preferred terminology] would come along and grab his penis – so he could make a morals arrest, of course.”89
Like Gaynor, Blick kept rigorous logs on numerous private citizens. These were recorded on index cards that were stacked high in a safe in Blick’s office. According to Lvovsky, “when he left the department, he threatened to keep the key.”90 During the CIA’s own information-collection program on homosexuals and other “deviants,” police forces across the country were marshaled into the effort, freely turning over their files and working hand in glove with the Agency. Yet, when it came to Roy Blick, who was stationed in the nation’s capital, cooperation with the CIA went beyond just file sharing. Numerous declassified files show Blick working closely with the CIA. For example, he made his own contacts at the British embassy available to William Harvey as part of the counterintelligence operation against the Kim Philby spy ring.
The CIA’s largest domestic espionage operation, which saw the full co-operation of various police departments and other law enforcement agencies with the Agency, was called Operation CHAOS. It had been initiated during the Johnson years to monitor the growing civil rights and antiwar movements. James Jesus Angleton, the ultraparanoid CIA counterintelligence chief, was the driving force behind CHAOS’ inception. Multiple subprograms were created, each tasked with different operational imperatives, and adjacent programs were rallied for support. One such program was called MERRIMAC, which “involved CIA infiltration of antiwar/peace groups in the Washington, DC area in order to gather … information on the organizations, their members, sources of funds, and plans.”91
MERRIMAC provided much of the information it harvested to CHAOS. MERRIMAC was run from the CIA’s Office of Security. As Shane O’Sullivan points out, McCord was then working as chief of the office’s Physical Security Division, which would have brought him into direct cooperation with MERRIMAC and CHAOS.92 Interestingly, E. Howard Hunt appears to have been delivering “sealed envelopes and packages,” believed to contain information on the White House “plumbers,” to Richard Ober – one of the top CIA officials, then overseeing Operation CHAOS.93 O’Sullivan draws other parallels between McCord’s post-CIA security firm, McCord Associates, and the CIA’s proprietary firms that were involved in MERRIMAC, CHAOS, and more general counterintelligence concerns.
Chief among these was Anderson Security, set up in 1962 to provide support for the Office of Security. Even after MERRIMAC was supposedly terminated in 1968, Anderson Security was, as late as 1971, managing infiltration and espionage of dissident groups in the capital on behalf of the Office of Security.94 Intriguingly, Hunt seems to have crossed paths with Anderson Security at the same time that he was delivering files to Ober, and he brought them on to carry out security sweeps of the CRP offices.95 All of this is highly suggestive that lurking within the “plumbers” unit was an apparatus connected to long-running CIA information-collection operations and security matters. The background of James McCord in the Office of Security certainly makes this possible as does Hunt’s involvement with Ober and Anderson Security. McCord and Hunt, however, claimed not to have met until their mutual involvement with CRP.
There are reasons to doubt this. Hunt, for example, had been active in the CIA’s anti-Castro operations. There he had worked alongside David Atlee Phillips, the eventual chief of the CIA’s Western Hemisphere Division, which encompassed the Caribbean and Latin America. In January 1961, McCord was temporarily detailed to Phillips to run a counterintelligence operation against the Fair Play for Cuba Committee, a pro-Castro activist group.96
The possibility that McCord and Hunt knew each other because of having operated in the same web of overlapping CIA operations in the 1950s, raises other questions. Why were the “plumbers” being stocked with CIA agents, and why was Hunt turning over information to the CIA? Interestingly, these moves were being made at a time when Richard Nixon – rightfully suspicious of the Agency – was seeking to blunt its power. Early plans were made to exclude Richard Helms, the director of the CIA, from National Security Council meetings.97 While the administration ultimately backed away from these efforts, the administration had nonetheless engaged in consistent bureaucratic wrangling that induced all sorts of headaches for the CIA. Part of the reason for this, Kissinger later noted, was that Nixon “brought to the presidency … a belief that the CIA was a ‘refuge of Ivy League intellectuals opposed to him.’”98
Regardless of whatever else was going on in this dense fog of palace intrigue, the house of cards collapsed on June 17 when police officers arrested McCord, Sturgis, Baker, Martinez, and Gonzalez in the Watergate offices of the DNC. Martinez was found with a key, which he reportedly attempted to conceal by swallowing it.99 The leader of the arresting officers was Carl Shoffler, a detective in the DC police’s Criminal Intelligence Division. Shoffler, incidentally, had been nicknamed “Little Blick” by his fellow officers, presumably for having interests and activities that resembled those of the infamous Captain Roy Blick.100 It was soon revealed that a previous break-in had taken place, that bugs had been planted in the offices of the DNC, and that McCord had set up a listening post in a rented room in the Howard Johnson Motor Lodge across the street.
The morning after the break-in, the deputy chairman of the DNC, Sam Gregg, called the organization’s general counsel, a well-known Washington lawyer named Joseph Califano Jr. Gregg told Califano about the break-in and mentioned that there was photographic equipment in the offices. Califano advised Gregg that the DNC should closely cooperate with the DC police. Califano then hung up the phone and promptly called another of his other top clients. He later said, “I picked up the phone and called Howard Simons who was the managing editor of the Post, who was on duty that weekend, and told him there’d been a break-in at the DNC. We didn’t know who it was, but it looked suspicious.”101
That the DNC and the Washington Post, soon to be written into history for its coverage of the Watergate affair, had the same general counsel is a surprising coincidence – but it’s Califano’s deeper history, and the close relations that he had forged in the previous decade, that stretch credulity. At the beginning of the 1960s, he worked for the white-shoe law firm Dewey Ballantine – the “Dewey” being Thomas Dewey – before he was tapped to serve as the special counsel to the Department of Defense’s general counsel. A year later, Califano was promoted to become special assistant to US Secretary of the Army, Cyrus Vance. It was during this period that Vance had delved into the world of the CIA and the Army’s secret wars.
While serving as assistant to Vance, Califano was deployed to the numerous coordinating bodies that brought the CIA and Army together for covert operations against Castro’s Cuba. Internal CIA memoranda and the more recently declassified “Califano papers” illustrate that his involvement with Operation Mongoose would have brought him into contact with a wide-ranging cast of characters, including Edward Lansdale and Ted Shackley. After Mongoose came to a close, Califano was assigned to its successor, the Interdepartmental Coordinating Committee of Cuban Affairs. He worked closely with the Joint Chiefs of Staff, as evidenced by memoranda Califano sent to them outlining “special actions.”102 Califano had his own assistant who worked alongside him through the numerous iterations of the anti-Castro coordinating committees – a young Alexander Haig. Haig later summarized the nature of some of their activities for historian Gus Russo:
I was part of it, as deputy to Joe Califano and military assistant to General Vance. We were conducting two raids a week at the height of that program against mainland Cuba. People were being killed, sugar mills were being blown up, bridges were demolished. We were using fast boats and mother ships and the United States Army was supporting and training these forces. This was after the Missile Crisis, when the Cuban Coordinating Committee was set up [in 1963]. Cy Vance, the Secretary of the Army, was [presiding] over the State Department, the CIA, and the National Security Council. I was intimately involved.103
As late as January 1964, Haig was working with Califano when the lawyer became the Department of Defense’s “Executive Agent for Cuban Affairs.”104 His mandate in this position was broad and took place during the general winding down of the Agency’s heavy focus on Cuba. He was involved in the management and resettlement of Cuban refugees and helped find homes and employment for scores of CIA-trained exile fighters. This likely would have brought both Califano and Haig into contact with the future private investigator A. J. Woolston-Smith – the same Woolston-Smith who had curious foreknowledge of the Watergate break-ins through his connections to Lou Russell.
And what of the Washington Post itself, whose intrepid journalists Bob Woodward and Carl Bernstein so famously broke the case? Originally, Woodward and Bernstein had worked separately, pursuing leads into the murky world of “former” CIA agents and shadowy security units like the plumbers. At the behest of the journal’s leadership – including Howard Simons, who had been contacted by Califano on the morning after the break-in – the two journalists began to pool their resources and contacts.
At least, this is the official story. The networks of sources that Woodward and Bernstein cultivated suggests that other dynamics were in play. There was, for example, Robert Bennett, the owner of the public relations firm Robert R. Mullen & Company. Bennett “said … that he [had] been feeding stories to Bob Woodward of the Washington Post with the understanding that there would be no attribution … to Bennett.”105 Mullen & Company was also the firm that E. Howard Hunt had gone to work for at the suggestion of CIA director Richard Helms following Hunt’s questionable retirement from the CIA. In addition, the firm itself was closely aligned with the CIA. An undated Agency summary, drafted sometime during the Watergate affair, noted that “Robert R. Mullen and Company has been utilized by the [CIA’s] Central Cover Staff since 1963. … Mr. Mullen has provided sensitive cover support overseas for Agency employees and he was instrumental in the formation of the Cuban Freedom Committee.”106 The Cuban Freedom Committee was similar to CIA projects like Radio Free Europe and broadcast anti-Castro propaganda to Cuba. In addition, Robert R. Mullen & Company’s attorney was Edward Bennett Williams, a partner in the same law firm as Joseph Califano. As an aside, among Williams’ clients was Robert Vesco, whose frighteningly intricate history – and peripheral role in Watergate – are discussed in the next chapter.
And what about Woodward himself? Carefully removed from the official Watergate narrative is Woodward’s stint, immediately prior to his career as a journalist, in the military. After attending Yale, Woodward had gone into the Navy, where he spent “four years of sea duty as a communications officer.”107 He served under two superiors who would go on to land important positions at the Pentagon. The first of these was Rear Admiral Francis Fitzpatrick, who became the “assistant chief of naval operations for communications and cryptology.”108 The second was Admiral Welander – the top assistant to Moorer and associate of Haig who, as discussed, was a central player in the Radford-Moorer espionage ring. In August 1969, Woodward, still an enterprising young naval officer, arrived in Washington, DC. Because of his expertise in communication systems, the military gave him a post at the Pentagon, where he worked in direct proximity to Fitzpatrick and Welander. As Len Colodny writes:
Woodward was tasked with overseeing approximately thirty sailors who manned the terminals, teletypes, and classified coding machines at the naval communication center through which all Navy traffic flowed, from routine orders to top-secret messages. It was a sensitive position that afforded Woodward access to more than one hundred communication channels, among them, according to Admiral Fitzpatrick, the top-secret SR-1 channel through which the Navy sent and received its most important messages.”109
We have already encountered SR-1 under its colloquial name of the Weather Channel, the secret communication system utilized by Task Force 157. Woodward, in other words, was directly linked to the cable traffic of this ultrasecret unit, which became connected in one direction to Edwin Wilson, Robert Keith Gray, and the China Lobby complex and in the other direction to the Joint Chiefs of Staff and the Nixon administration’s internal power struggles over East Asian policy and overarching bureaucratic organization. Furthermore, in this position, Woodward would have answered directly to Admiral Thomas Moorer, who not only made SR-1 available to Kissinger but who had also sought to undermine Kissinger’s efforts in the China initiative.
According to Colodny’s sources, which included Admiral Moorer himself, Woodward also acted as a “briefer,” meaning he collected information from a variety of sources for assimilation and subsequent presentation to his commanding officers. Moorer was not the only military official who would have received Woodward’s briefings. “On his briefing assignment,” writes Colodny, “Woodward was often sent across the river from the Pentagon to the basement of the White House, where he would enter the offices of the National Security Council. There, Woodward would act as briefer to Alexander Haig.”110
This suppressed connection between Woodward and Haig led Colodny to suggest that Haig was, in fact, the infamous Deep Throat, the mysterious informant who provided Woodward and Bernstein with vital bits and pieces of information. The more recent claims made by Mark Felt, a veteran FBI official, to have been the real Deep Throat has disturbed the Haig thesis. Felt was certainly in a position to have known a lot. His posts at the FBI had included, for example, overseeing the COINTELPRO operations before he became assistant director of the Bureau in 1972. He also had a personal animus against the administration, which had passed over him in appointing a new director after J. Edgar Hoover’s death. But, as Colodny’s co-author Robert Gettlin has pointed out, certain essential pieces of information that Woodward attributes to Deep Throat simply could not have been known by Felt at that place and time.111 As a result, it has been posited that Deep Throat was likely a composite of multiple informants.
CALLS GIRLS AND MOBSTERS
The Watergate scandal was one of the great political imbroglios of the latter half of the twentieth century. It collapsed an entire administration, set off a decade of power plays, reform efforts, and bureaucratic changes. It contributed, along with the deeply unpopular Vietnam War and subsequent revelations of government skullduggery, to an overwhelming air of distrust on the part of the American people toward their rulers. Yet, what remains remarkable, despite all of this, is that the rationale for the break-ins has never been satisfactorily explained.
There are an array of competing explanations and interpretations, even from the burglars themselves. According to James McCord, the reason they broke in was to place listening devices in Larry O’Brien’s offices. E. Howard Hunt, meanwhile, suggested that the team had been dispatched to the Watergate to unearth evidence of illicit campaign contributions being made to the DNC by Fidel Castro. However, as Jim Hougan has untiringly pointed out time and again, there is no evidence to substantiate either claim.112 The FBI never found evidence of the purported bugs – which would not have worked anyway. As Hougan writes, “O’Brien’s office was part of the interior suite at the DNC and … was shielded from McCord’s ‘listening post’ in the motel across the street from the Watergate.”113
As for the Castro claims, evidence has never surfaced that the leader of Cuba was funneling money to Democratic politicians, and it is highly unlikely that this is what McCord, Hunt, and company were rummaging for. The most likely repositories for information of this sort – the offices of the DNC treasurer, for example – were left untouched over the course of the break-ins.
There is also the issue of unexplained evidence, the most important of which may be the mysterious key in the possession of Eugenio Martinez. At the time of the burglars’ arrest, the lock that matched the key was not discovered. Yet, in the subsequent investigation, it was found that the key fit the lock of the office of Maxine Wells, the secretary to R. Spencer Oliver, whose phone had been tapped. Hougan states that, according to arresting officer Carl Shoffler, photographic equipment “was clamped to the top” of Well’s desk.”114 Len Colodny asks: “Why would a Watergate burglar have a key to Wells’ desk in his possession, and what items of interest to a Watergate burglar were maintained in Wells’ locked desk drawer?”115
Intimations that something strange had been afoot involving Oliver’s secretaries was reported early on in Nightmare by veteran journalist Anthony Lukas. Alfred Baldwin, a former FBI agent hired by McCord to monitor calls being made from Oliver’s phone at the nearby listening post, stated that the secretaries were actively using the phone when Oliver, who was frequently away from the office for long stretches of time, was not present. “Some of these conversations,” Lukas writes, citing Baldwin, “were ‘explicitly intimate.’”116 Lukas adds that “so spicy were some of the conversations that they have given rise to confirmed reports that the telephone was being used for some sort of call-girl service catering to congressmen and other prominent Washingtonians.”117 Here, Lukas is being deceptive, as the allegations concerning the potential of a Watergate-connected call girl service do not arise on the basis of the phone calls alone. There was, in fact, evidence that several rings were being operated at the nearby Colombian Plaza Apartments, adjacent to both the Watergate and to the motel where McCord’s listening post was located. These rings were overseen “by at least two madams, Lil Lori and Helen Henderson”; another woman involved was identified by Hougan as “Tess.”118 He writes:
Besides their location at the Colombian Plaza Apartments, the prostitutes had at least two things in common. The first was the homogeneity of their clients. With few exceptions, they were professional men – lobbyists, lawyers, stockbrokers, physicians, congressional aides, and real estate developers. They were among the movers and shakers of the capital, and included at least one US senator, an astronaut, a Saudi prince, a clutch of US and KCIA intelligence agents, and a host of prominent Democrats.… According to a 1971 police intelligence report… “The Watergate Hotel … was a prime source of their business.”119
To make matters more complicated, Lou Russell – linked to McCord and other figures nebulously circling around the Watergate affair – was closely acquainted with the proprietors of the call girl ring. Writes Hougan: “According to Russell’s friends … Russell chose to idle away his leisure time in the apartments at the Colombia Plaza. He was a friend to many of the girls, a sometime customer, a free-lance bouncer, and a source of referrals.”120 Russell may, however, have been playing an even more important role at those apartments. Phillip Bailley, a figure of incredible importance to the deeper context of the Watergate saga, encountered Russell there with a set up that included recording equipment, cameras, and two-way mirrors to record the girls’ clients.121
Who was Phillip Bailley, and why was he so important to these unfolding events? Bailley was a DC lawyer with a predilection for the dark side of life. He presented himself as a well-connected player, an operative in the capital’s nighttime world. However, the reality was a bit different – he was, to quote Phil Stanford, a “fledgling lawyer at the bottom of the D.C. legal food chain.”122 A graduate of the local Catholic University of America law school, his self-declared role model was Bobby Baker – the notoriously crooked political fixer of the Democratic establishment of the 1950s and 1960s. Baker himself operated within a constellation of Texas-based businessmen and organized crime figures. It is possible that, after setting his sights on that type of milieu, Bailley decided to begin his ascent into these networks. His preferred clientele included “petty criminals, drug dealers, and prostitutes.”123
In Secret Agenda, Bailley is described as being close to the call girl Jim Hougan dubbed “Tess,” which was not her real name.124 Len Colodny, in Silent Coup, identifies Bailley’s consort in the call girl ring as Cathy Dieter. To make matters more confusing, Dieter was not the girl’s real name either. She was actually Erika “Heidi” Rikan, “a woman who between 1965 and 1966 had performed as a stripper at Washington’s Blue Mirror Club in the notorious 14th Street District.”125 Rikan, like Bailley, was well connected. Her best friend was Maureen Biner, who at the time was dating John Dean, the Nixon administration’s White House counsel.126 Dean and Biner later married, and she changed her name to Maureen Dean.
Rikan and Biner had known each other for many years at this point. For a brief period in the late 1960s, Biner was married to George Owen, scout for the Dallas Cowboys. Owen had the inside track to the top Texas power players; his personal friends included the oil heir Clint Murchison Jr.; Bedford Wynne, the offspring of a prominent Dallas family with numerous interests, including oil, real estate, industry, insurance, and law; Bobby Baker; and Gordon McLendon, a prominent radio man and occasional intelligence asset. McLendon’s close associates included, interestingly enough, Jack Ruby, the mobster famous for killing Lee Harvey Oswald, and David Atlee Phillips, the CIA officer connected to both E. Howard Hunt and James McCord.127 Maureen writes in her autobiography of an extended trip to Lake Tahoe “with a good and new friend I had met through George, Heidi Rikan.”128
What’s interesting here is that, through their mutual relationship with George Owen and the high flyers of Dallas, Texas, Maureen and Rikan were moving into a circle that overlapped considerably with organized crime interests. McLendon’s friend Jack Ruby was himself an insider and participant in the Dallas criminal underworld. The Murchison oil and construction interests, meanwhile, deployed as lobbyist Irving Davidson, who also was lobbyist for the CIA, the FBI, Israel, and crime bosses such as Carlos Marcello.129 The Murchisons also maintained their own ties to Marcello.130 Rikan continued to maintain her ties to this side of Texas, even after her move to DC. Phil Stanford reports that within her contact book were Wynne, McLendon, Murchison, and others.131 The roster of names helps to further illustrate the convergence of Texas business interests and organized crime: one of the names, for example, was Fred Black Jr. Black was a close friend and business partner of the controversial Bobby Baker – and also an intimate of Moe Dalitz, Johnny Roselli, and Clifford Jones, the mob-linked lieutenant governor of Nevada.132 Jones was also an alleged confidant of Meyer Lansky, representing his interests in several Vegas casinos. It might be important, then, that Black – who maintained an apartment in the Watergate – also owned stakes in several Caribbean casinos owned by Jones.
Another name that appeared in Rikan’s contact book was Ben Barnes, a Texas real estate major who had served as the state’s lieutenant governor between 1968 and 1973. Among Barnes’ close circle of contacts was Herman Beebe, and the two, by the 1980s, were linked to a string of collapsed savings and loans – many of which bore the fingerprints of organized crime and intelligence agencies in their demise. Yet, even in the 1960s and 1970s, Beebe was making the rounds. The network of banks and real estate ventures that would lay the groundwork for his later escapades were tightly interwoven with the criminal enterprises of Carlos Marcello.133
Just as Rikan maintained her Texas connections after moving to Washington, she also continued her own personal ties to powerful organized crime figures. At the time that she was involved with Phillip Bailley and active in the ring operating across from the Watergate, she was also reportedly the girlfriend of the mob boss of Washington, DC, Joe Nesline.134
Born in Washington, DC, in September 1913, Nesline was first arrested in 1931 for “violation of illegal whiskey laws.”135 Over the years, he raked up an immense number of encounters with the law – primarily arrests for his persistent involvement in illicit gambling activities. Nesline’s early gambling operations were operated from numerous establishments such as the Spartan Club. Many of his ventures were carried out in partnership with Charles “Charlie the Blade” Tourine. The pair were arrested on June 13, 1963, in a gambling parlor the two had organized in Maryland.
One 1962 FBI report identified Tourine as the “collection man” for Nesline. Nesline and Tourine’s gambling interests intertwined with those of Dino Cellini, Meyer Lansky’s top casino operator in the Caribbean. Nesline, for example, maintained a stake in the Colony Club in London, which was operated for a time by Dino Cellini.136 Much earlier, in pre-revolutionary Cuba, Nesline had worked at the Tropicana Club in Havana, where Cellini was acting as manager. At this time, Tourine was managing the nearby Capri. In the wake of Castro’s 1959 revolution, Cellini, Tourine, Meyer Lansky’s brother Jake, and Florida mob boss Santo Trafficante were imprisoned together in a camp called the Trescornia.137 In addition, in the early 1960s, Nesline and Tourine co-owned a posh Miami beach house. In 1964, this property was inhabited by Alvin Malnik, a Mafia financier who was something of a protégé of Lanksy’s.138 Malnik, in this same period, was plugged into the web of international banking that the organized crime groups surrounding Lansky used to move the money they reaped from countless real estate interests, the narcotics trade, and the skim from casinos. He was also the counsel for the Allied Empire Corporation, a major stockholder in Lansky’s offshore Bank of World Commerce.
Given these sorts of associations, it is perhaps noteworthy that George Owen told Len Colodny that he first met Rikan in the mid-1960s in Antigua.139 He was visiting the island with his good friends Bedford Wynne and Gilbert Lee Beckley. Beckley, a world-renowned gambler and bookie described by TIME as “a valuable man to the Cosa Nostra,” co-owned a hotel on the island called the Miramar, which is where Owen first crossed paths with Rikan.140 An FBI report states that in 1966, Charles Tourine was dispatched to Antigua “to protect Beckley’s interests.” The same report states that in addition to Beckley, co-investors in the Miramar included Anthony “Fat Tony” Salerno of the Genovese crime family.
Nesline’s DC operations seem to have been enabled by the extensive corruption of the local police force. An FBI report from late May 1962 describes information provided by an informant with intimate knowledge of police involvement with organized crime in the area. The informant’s name is withheld in the report – he felt that “his life and that of his family would be placed in jeopardy if knowledge of his interviews and cooperation with the FBI were even suspected by the various members of the Washington DC area gambling element.”141 The report continues: “No gambler operates in the Washington DC area unless he obtains protection from the Metropolitan Police Department.”142 According to the anonymous informant, influence over the gambling rackets was divided up according to the various police precincts, with the “gambling ‘backers’” often having to deal “directly with the Captain of the particular precinct.”143 But perhaps some of the most interesting information concerns Roy Blick, the morals squad head who worked so closely with the CIA: “[Redacted] stated that he was told by Mitchell and feels certain that it is true that “Snags” Lewis was paying Inspector Roy Blick and Chief of Police Barnett.… He had been recently advised that “Snags” Lewis, “Billy” Mitchell, and Joe Nesline are currently doing business with Blick.”144
POTENTIAL MOTIVES
Sometime in 1971, Heidi Rikan came to Phillip Bailley with the idea of using his contacts at the DNC to expand the customer base for the girls at Colombia Plaza.145 The connection between Bailley and the DNC was Spencer Oliver, and the “thought was someone – perhaps Oliver himself, perhaps another employee – would be able to steer ‘high-rolling pols’ to [Rikan’s] Colombia Plaza operation.”146 According to Bailley, he managed to make contact with someone within the DNC, and the arrangements were made for a call-out line to be set up from the offices. The location of this line was purported to be the phone of Spencer Oliver, though he does not appear to have been the one with whom Bailley was negotiating. As 1971 gave way to 1972, the operation was bearing fruit, reportedly with one client or more a day being set up through the DNC offices. “Other clients,” writes Len Colodny, drawing on statements made by Bailley, “included men from the State Department, major hotels in town, a private club, and the Library of Congress.”147
Unfortunately for Bailley, trouble was looming on the horizon. On April 6, 1972, the DC police and the FBI raided his home. While Bailley was away, tied up in court, the authorities were busy pulling a veritable treasure trove of incredibly incriminating items from his apartment. Among the sex paraphernalia, video-recording equipment, and other such odds and ends were photographs, home movies, ledgers, and contact books. Each of these was taken into police custody and logged as evidence.
The reason for the raid, interestingly enough, was separate from the complex arrangements running at Watergate and the Colombia Plaza Apartments. Bailley was being charged with violating the Mann Act, which is better known as the White-Slave Traffic Act of 1910. The crooked lawyer, it seems, was accused of drugging a university of student, taking pornographic pictures of her and blackmailing her. As the story goes, Bailley threatened to dispatch copies of the photographs to her school’s administrators and her parents if she “did not submit to the attentions of his political cronies and business associates. So, she did submit, having sex with fifteen consecutive partners at a party hosted by Bailley in a suburban Maryland house.”148
Phil Stanford, in his book on Rikan, presents a slightly more complicated story. He identifies the student as Astrid Leflang, who Bailley had attempted to recruit into Rikan’s call girl ring.149 Rikan, however, rejected Leflang on the grounds that she was “too low-class” and not sophisticated enough for the operation she was trying to get up and running. Soon enough, Leflang was feeling snubbed – and began to provide information to the Capitol Police vice squad.150 Thus began Bailley’s legal woes.
Within a month, Assistant US Attorney John Rudy was building a major case against Bailley. By this time, many women had come forward with accusations against the attorney, and lists of potential witnesses were being compiled. Because Bailley’s social networks were so broad, there were quite a few to choose from. Nevertheless, the media buzz about Bailley’s situation and the seriousness of his crimes was minimal – at least until June 9, when the Washington Star ran a front-page story stamped with the headline “Capitol Hill Call Girl Ring Uncovered.” “The FBI has uncovered,” the article states, “a high-priced call girl ring allegedly headed by a Washington attorney and staffed by secretaries and office workers from Capitol Hill and involving at least one White House secretary.”151 The article seems to be alluding directly to the Rikan call girl ring, while misconstruing just how involved Bailley was with it.
Who exactly tipped off the Star is unknown, but it set off alarms elsewhere in DC. Attorney John Rudy received a call from John Dean demanding access to “all documentary evidence involved in the [Bailley] investigation.”152 Rudy and his assistants were personally summoned to the White House. The evidence, including Bailley’s contact book, was packed up and brought to Dean. Rudy would later tell Colodny that the main focus of Dean’s attention, besides the potential sources for the Star’s story, was the black contact book. Many of the individuals in the book were hidden behind aliases, and two of those were “Cathy Dieter” and “Clout.” Rudy had taken pains to confirm the identities behind the aliases: Cathy Dieter was Heidi Rikan, while Clout was her good friend and former roommate Maureen Biner. Rudy, at the time, did not know that Dean was dating Biner – or, for that matter, that Biner had moved in with Dean.153
The timeframe of these events is telling. The raid on Bailley took place on April 6, 1972, and a day later the CRP provided G. Gordon Liddy with $83,000. On April 12, McCord received a large chunk of this money to purchase electronic surveillance equipment. Hougan notes that it was “three days later, on April 15, that William Haddad wrote to [Jack] Anderson for the first time, informing him of plans to spy on Democrats.”154 The first of the break-ins at the DNC then took place toward the end of May. The Star article and John Dean’s encounter with Bailley’s contact book was June 9..On June 12, Jeb Magruder suggested to Liddy another break-in – ostensibly for the purposes of acquiring the files of DNC chairman Larry O’Brien. Magruder, however, had not concocted the scheme out of whole cloth. It had been Dean’s idea.155 Within five days the police were in the DNC offices making arrests, and Eugenio Martinez was trying to prevent the mysterious key from falling into police hands. From there, it was all downhill for the Nixon administration.
Had Dean ultimately ordered the break-ins to obtain potentially incriminating information related to the Watergate–Colombia Plaza ring, which was connected to his future wife via Heidi Rikan? With the specter of organized crime – chiefly, Rikan’s relationship with Joe Nesline – in play and the rumors swirling about high-profile Washingtonians indulging in prostitution, it was certainly an explosive situation. Perhaps Dean was hoping to get out ahead of any revelations that might emerge from the investigation of Bailley and his impending conviction.
There are also other looming questions. Was there a connection between the Watergate call girl ring and the sorts of sexual-blackmail operations alleged to have been carried out by Edwin Wilson? Jim Hougan offers some provocative evidence. For instance, the “trick book” maintained by Lil’ Lori (Barbara Ralabate) reportedly contained the names “Ed Wilson” and “Tungsten Park.”156 The “Tungsten Park” was clearly Tongsun Park. Furthermore, he writes that the apartment owned by “Tess” (Heidi Rikan) had been rented in the name of Phillip Bailley but had actually been paid for “by a wealthy defense contractor, a sometime lobbyist on Capitol Hill who owned a huge farm and claimed to ‘hail’ from Houston, Texas.”157 Each of these descriptions match Edwin Wilson, who had indeed spent time as a lobbyist (covertly working on behalf of the CIA), owned a sprawling farm in Virginia, and managed lucrative defense contracts via the TF-157 front companies – one of which, Aroundworld Shipping & Chartering, operated from Houston, Texas. The implications of this are immense. If Wilson and Park were indeed connected to the Watergate ring, then it was plugged into a network that encompassed the activities of Robert Keith Gray, the George Town Club, the internal politics of Task Force 157, and, ultimately, the forces seemingly aligning themselves against Richard Nixon.
Seen from this point of view, the Watergate incident, which imploded Nixon’s presidency, appears less like a sloppy robbery gone awry and more like an elaborate frame-up, followed by a controlled demolition. The specter of the CIA in Watergate continued even into the trials that followed the unveiling of the break-ins, as evidenced by the man who was appointed as the Watergate special prosecutor, Leon Jaworski.
A partner at the Houston-based firm of Fulbright & Jaworski, Jaworski populated numerous boards and maintained affiliations with a wide gamut of powerful interests. He held the position of trustee at the M.D. Anderson Foundation, which had been established in the late 1930s to help build the now-famous medical center in Houston. Sometime towards the end of the 1950s, M.D. Anderson became a conduit for funds originating from the CIA. As trustee, Jaworski was aware of the nature of the funds, and had signed off on it – as had the foundation’s president, John Freeman, who was a former partner at Jaworski’s firm.158
Another Houston-based foundation moving CIA money in this same period was the San Jacinto Fund.159 Heading the San Jacinto Fund was Ernest Cockrell Jr. – a board member of the wealthy Bank of the South-west. Jaworski and his law partners could also be found here: a 1977 Texas Monthly article describes how “the partners had their closest and most lucrative relationship with the Bank of the Southwest. In addition to serving as the bank’s legal counsel, members of the firm dominated the board of directors and occupied the top executive positions.”160 Another bank director was the businessman John de Menil, then the representative of Schlumberger oil interests in America.161 Schlumberger would later be implicated in the covert support for the anti-Castro Cuban exiles, suggesting yet another CIA element in this network of individuals.162
By the time that the Watergate scandal had erupted, Jaworski could be found working closely with a veteran of those same anti-Castro operations, and one who played a prominent role in the events detailed in this chapter: Alexander Haig. The nature of this relationship was so particular that it saw Haig act as a channel for the flow of information to Jaworski, including some which had not been subpoenaed.163 It seems that Haig was playing a direct, if shadowy, role in shaping the overall thrust of the Watergate prosecution.
THE PAGEBOY SCANDAL
The sordid story rumbling beneath the Watergate fiasco was not the only time that Robert Keith Gray’s name would come up in connection with sexual-blackmail rings. As previously mentioned, John DeCamp’s 1992 classic book on the Franklin scandal raised the specter of Gray – and his connections to Edwin Wilson – due to his close association with Harold Andersen, the publisher of the Omaha World Herald newspaper and a close ally of the man at the city of that particular web, Larry King. Andersen himself stood accused of being a willing participant in King’s activities.
Nearly a decade earlier, Gray had surfaced in the course of an investigation into a purported sex-and-drug ring that allegedly operated on Capitol Hill. The scandal made a momentary splash in the media, but it is now merely a footnote. It began when Leroy Williams Jr., a congressional page – pages were high school students employed to fulfill various administrative tasks such as acting as couriers for congressmen – made startling accusations that he “had sex with three House members and procured homosexual prostitutes for a senator.”164 The latter incident was reported as having taken place at the Watergate office complex.165
Initial reports suggested that unnamed witnesses came forward with further information on sexual activities between politicians and pages, prostitution rings, and a connected drug ring operating on the Hill. CBS Evening News ran the story first on July 30, 1982, and the hints of drug abuse were quickly linked to arrests that had occurred several months earlier. On April 19, Douglas Marshall, Robert Finkel, and Troy Todd had been nabbed by undercover Washington, DC, Metropolitan Police for possession of cocaine; of the three, Marshall and Finkel were charged “with distributing and conspiring to distribute cocaine.”166 Todd and another accomplice, a young woman named Devon Dupres, were subsequently named as “unindicted co-conspirators.”
Newspapers described Dupres as “a Georgetown cocktail waitress,” though she appears to have been an assistant to Michael O’Harro, the owner of a DC discotheque called Tramps.167 Others stated that she
“reportedly socialized with a California congressman now under investigation by drug agents” and was subsequently entered into the “Justice Department federal witness program” and “moved to an undisclosed location.”168 This odd cast of characters operated a cocaine ring that employed the services of congressional pages, tour guides, and other Hill employees who enjoyed wide-ranging access to members of Congress. Douglas Marshall himself had been a page, while Robert Finkel had worked as an elevator operator in the Capitol. On July 7, Jack Anderson reported that “more than 15 members of congress were customers of a cocaine ring that operated on Capitol Hill, the ringleaders have told narcotics agents.”169 He also appeared on ABC News Nightline with Sam Donaldson, publicly linking the cocaine ring with the emerging allegations of prostitution and sexual abuse:
Donaldson: All right, Jack, tell us about the page setup. Did you actually catch some pages involved as couriers?
Mr. Anderson: There were some pages involved, but the drug scam … changed into a sex scam later. I know very little about the sex angle of it except that the same people were involved. Some of the same people.
Donaldson: But pages were acting as couriers for the dealing of drugs?
Mr. Anderson: That’s correct. So were congressional aides.170
By the time that Anderson was making these accusations, an FBI investigation and a House Ethics Committee inquiry had formed to assess the possibilities of a sex-and-drugs ring on Capitol Hill. Oddly enough, old Watergate familiar Joseph Califano was put in charge of the inquiry. Califano’s team employed a score of lawyers and investigators, including two private investigators – Richard Powers, a former New York City police officer, and John “Jack” Moriarty, a former DC police officer.
Gray’s name came up in the inquiry from an anonymous tip, which was handled by Powers, who drafted a memo on it to Califano. The memo quickly disappeared.171 The lead to Gray arose on July 21, when Ethics Committee counsel Donald Purdy and John Moriarty interviewed yet another figure from the Watergate days, DC police officer Carl Shoffler. Shoffler turned over the extensive information that he had compiled on Gray – his links to Edwin Wilson and the CIA, rumors of his involvement in the use and distribution of narcotics, wild tales of orgies taking place at his home in Rehoboth Beach.
The most alarming allegation made by Shoffler, however, was that a consultant for Diamond Shamrock, a major Texas-based oil and gas concern, and a local photographer personally known to Gray were involved in “a male prostitution service on Capitol Hill.”172 Diamond Shamrock was, at the time, a client of Gray & Co., an independent PR firm set up by Gray in the early 1980s.173 Several weeks after he provided this information to Purdy and Moriarty, Shoffler was contacted by a security specialist with longtime intelligence ties, Michael Pilgrim.174 Pilgrim wanted to know if Shoffler had been hired by H & K – Gray had left the firm to start Gray & Co. – to keep tabs on their former executive. Pilgrim, in turn, had been asked to assess Shoffler by Neil Livingstone, yet another strange character from the murky netherworld where intelligence and Beltway subterfuge intersected.
Livingstone, who will be discussed at greater length in the next chapter, was at the time working for Gray at Gray & Co. while also maintaining extensive ties to the circles around Ted Shackley, Thomas Clines, and Edwin Wilson that went back to the mid-1970s. The arrival of Livingstone on the scene raised even more puzzling questions. As Susan Trento asked: “How did Livingstone find out that Shoffler had received allegations about Gray?”175
The day after his encounter with Pilgrim, Shoffler was contacted by Thomas Fortuin, Gray’s attorney. It was an interesting choice for a lawyer as, in 1981, Fortuin had taken over from Roy Cohn as the chief attorney for Tony Salerno, the boss of the Genovese crime family.176 These ties may have run deep – Gray was reportedly a friend of Cohn, though – as previously mentioned, the exact nature of their relationship remains vague.
A year after the pageboy scandal first broke, Salerno arranged for the appointment of Jackie Presser as president of the Teamsters Union.177 Presser was a client and close associate of Gray; the two may have even owned a mysterious company together called Member Services Corporation.178 Fortuin offered Shoffler the opportunity to interview Gray, with the clarification that Gray would deny the allegations that Shoffler had made to Purdy and Moriarty. He then added that it was Moriarty himself who had turned over the information to Gray’s associates. It was an incredible conflict of interest: in addition to working on the Ethics Committee probe, both Moriarty and Powers were moonlighting on behalf of Gray & Co. Powers himself was a longtime associate of Fortuin, who had employed Powers as his own private investigator.179 In a subsequent meeting with Powers, Shoffler himself was offered a job working for Gray – at a very lucrative salary. Shoffler saw this as an attempted bribe and reported it to the US Attorney. Very soon a sweeping Department of Justice investigation was underway.
On September 28, 1982, the New York Times ran an article stamped with the title “Califano suspends 2 investigators in Congress sex and drugs inquiry.”180 These two investigators were identified as Powers and Moriarty. Califano “did not return repeated calls to his office, and Justice Department officials declined to disclose the nature of the charges against Mr. Moriarty and Mr. Powers.”181
After the Moriarty and Powers debacle, the entire episode came to a close, much more quietly than it had begun. More questions than satisfactory answers were raised. In the final Ethics Committee reported, Califano cited evidence that the US Capitol Police had systematically destroyed documentary records related to drug trafficking on the Hill – including vital documents put together in the critical month of July 1982 when the accusations first began to gain momentum. While the report suggested that disciplinary action in connection with the destruction might be warranted, there was insufficient evidence “to conclude that the records … contained information important to the Committee’s investigation of illicit drug use or distribution of drugs.”182
The allegations of sexual abuse of pages and homosexual prostitution were also soon swept to the side. Leroy Williams, the page who first came forward, suddenly recanted. He told investigators working on behalf of the Ethics Committee that he “concocted the tale of sexual misconduct and drug use to draw public attention to the pressures of the page system.”183 Importantly, the congressman with whom he had claimed to have had sex – Larry Craig of Idaho – was himself a member of the House Ethics Committee.184 In 2007, Craig was arrested after propositioning an undercover police officer for sex in the men’s restroom of the Minneapolis-Saint Paul International Airport.185