CHAPTER 5. SHADES OF GREY
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 Hyonguk, 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
uring 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 AFLCIO’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
dwin 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 coconspirator – 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.