One Nation Under Blackmail, by Whitney Webb

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Part 1 of 2

CHAPTER 2. BOOZE AND BLACKMAIL

THE WHISKY MEN

Per his own account, Samuel Bronfman had never planned to become one of North America's top liquor magnates, having previously aspired to a career in law. Nevertheless, true to his family's last name, which means "whisky man" in Yiddish, he and his brothers went on to build a liquor empire that would rocket the Bronfmans into the upper echelons of the Western business elite, though the road they traveled to get there was hardly elegant.

While the Bronfmans are now remembered as scions of Canada's upper class, this was certainly not the case when Samuel's parents -- Mindel and Yechiel Bronfman -- brought the family to Canada from Bessarabia, now part of modern-day Moldova and Ukraine, in 1889. They had left as part of a wave of Jewish immigrants fleeing the anti-Semitic pogroms of czarist Russia, leaving behind a somewhat profitable tobacco farming business.

In Bessarabia, they had been relatively well off and had emigrated to Canada along with two of their servants and their personal rabbi. However, Canada, particularly Manitoba where the Bronfmans eventually settled, was poorly suited for tobacco farming, forcing Yechiel to labor on Canadian railroads and in sawmills before moving into the sale of firewood and the trading of livestock and fish. It would be their trading of horses that would eventually lead them to begin work in the hospitality sector and, subsequently, the liquor business.1

The Bronfmans' beginnings, particularly following their arrival in Canada, stand in such stark contrast to their current reputation that even Sam's sons, Edgar and Charles, were kept in the dark by their own father regarding the family business' early days. "He would never tell us any of the early history, " Edgar Bronfman would later remember of his father. A Bronfman biographer -- former senior editor at The Economist, Nicholas Faith -- would also write that "underlying the family's riches was a deep sense of shame as to their origins" and that Sam's generation had "shared an absolute refusal to tell their offspring anything about their life before their arrival in the Promised Land," i.e., Canada.

Part of the reason for this secrecy, even within the family and between father and son, was likely related to the personal struggle of many immigrants, some of whom choose to turn their back on their lives prior to immigrating and strive to establish and prove their connections to the new land in which they find themselves. Indeed, Sam Bronfman went to great lengths to do just that, publicly claiming for much of his late life that he had been born on March 4, 1891 in Brandon, Manitoba, Canada, obfuscating both his real date and place of birth - February 27, 1889, Bessarabia.2 Michael Marrus, one of Bronfman's more sympathetic biographers, would write that Sam Bronfman never truly "abandoned his enthusiastic identification with the country in which his career began, and [his attempts to obfuscate his place of birth] is perhaps the most significant indication of his obsession with the respectability he associated with Canadian citizenship."3

While Sam Bronfman was undoubtedly ill at ease with his status as an immigrant, there is another factor that may explain his unwillingness, and that of his seven siblings, to discuss the family's "early days" and, specifically, the chain of events and eventual alliances with unsavory characters that would lead them to the top of Canada's business elite.

At some point in the early 1890s, as he sampled spirits in a dingy saloon after selling off some horses, Yechiel Bronfman mulled the merits of leaving behind a life of hard labor in favor of the intertwined businesses of hospitality and liquor sales. Sam Bronfman would later claim that it was actually he who had convinced his father to move into hospitality and bartending, though most biographers doubt this, given Sam's age at the time.4 Regardless, it would be over a decade before the Bronfman family patriarch and his eldest sons managed to scrape together the funds necessary to realize Yechiel's dreams.

The Bronfmans had saved enough money to lease their first Canadian hotel, the Anglo-American Hotel in Emerson, Manitoba, by 1903.5 Soon, they acquired several more hotels in Yorkton, Saskatchewan and later in Winnipeg and beyond, building a small yet profitable network of hotels prior to the onset of World War I. The dramatic shift in the family's fortune was largely thanks to the business acumen of Sam's brother Harry, who managed to stave off the financial damage and legal trouble caused by the gambling and other "unseemly" habits of their older brother, Abe.

Sam Bronfman formally joined the new family business in 1907, though he would later regale some of his biographers with tales of how he had been the original "dynamo" behind the family's success in hospitality, despite considerable evidence to

Sam Bronfman formally joined the new family business in 1907, though he would later regale some of his biographers with tales of how he had been the original “dynamo” behind the family’s success in hospitality, despite considerable evidence to the contrary. What is notable, however, is the fact that, not long after Sam formally became involved in hotel management, the family’s hotels were targeted by a series of unfortunate accusations, including when they went to renew their liquor license in Yorktown in 1908. Locals had alleged that the Bronfmans were guilty of violating local liquor laws and condoning illegal gambling in their inns.6 The latter is particularly likely given the well-known gambling habits of Abe Bronfman, which were known to have threatened the family business on more than one occasion.

The same year that Sam joined the family’s hotel business, the organization that would eventually bring “Prohibition” to Canada also emerged, the Social and Moral Reform Council. A joining of the leadership of various Protestant churches, the Women’s Christian Temperance Union, the Royal Templars of Temperance and other like-minded groups, the Social and Moral Reform Council was born out of a farreaching Protestant religious movement of the period, known as the “Social Gospel” movement, that sought to “fight social evils,” particularly those caused or exacerbated by rapid urbanization and industrialization.7 For groups like the Social and Moral Reform Council, liquor quickly became a main target.

The Council and its allies managed to successfully appeal to many Canadians, both those who shared and lacked their religious zeal, as bars and saloons were often disliked for other reasons aside from their “moral depravity,” such as their often farreaching stenches and the fact that around a third of criminal prosecutions at the time were related to drunkenness.8 Though the Temperance movement in Canada deeply divided its population, it got the boost it needed to become common policy with the onset of the First World War.

In Canada, Prohibition was initially a provincial matter, with a handful of provinces having enacted Prohibition laws prior to the war. Yet, once the curtain of war had fallen, many Canadians came to believe that banning the sale, trade and manufacture of alcohol would aid the war effort. As a result, most Canadian provinces enacted some sort of alcohol ban prior to Canada’s short-lived federal ban, enacted near the end of the war in 1918 and expiring a year after hostilities ended.9 The impact of Prohibition on Canada’s liquor industry was substantial and felt long after it was repealed, with 75% of its breweries having closed by 1928. However, Prohibition was conveniently fortuitous for some, the Bronfmans chief among them.

Given the provincial nature of Prohibition in Canada prior to its brief stint as a federal policy, the differences between the Temperance laws of various provinces provided numerous loopholes that the Bronfmans were able to exploit to great effect. So successful were the Bronfmans at aptly working in the gray area of the varied and often temporary gaps between provincial laws that author Peter Newman remarked in his biography of the Bronfmans, Bronfman Dynasty: The Rothschilds of the New World, “Sometimes it almost seemed that the American Congress and the Canadian federal and provincial legislatures must have secretly held a grand conclave to decide one issue: How they could draft anti-liquor laws and regulations that would help maximize the Bronfman brothers’ bootlegging profits.”10

In one example, during World War I, the three eldest Bronfman brothers (Abe, Harry, and Sam) exploited the fact that Manitoba and Ontario, while prohibiting the sale of liquor within the province, allowed alcohol to be imported. The brothers set up several mail-order liquor businesses throughout these two provinces and profited handsomely, that is until the ban on interprovincial trading would go into effect in 1918 with federal Prohibition.

However, federal Prohibition also came with a loophole, which allowed alcohol to be sold for “medicinal purposes.” This prompted Harry Bronfman to create a wholesale drug company that permitted him to import alcohol in bulk and provide it to area pharmacies. He placed its offices next door to one of the family’s ritzier hotels, the Balmoral, and its business model involved offering doctors a bonus for each liquor prescription they wrote if that prescription was fulfilled by a pharmacy whose liquor was furnished by the Bronfmans.11

Canadian writer Mordecai Richler would later allege that the initial license for Harry’s new enterprise, named the Canada Pure Drug Company, was acquired by a well-placed bribe to a prominent politician.12 Other family biographers, like Michael Marrus, called the firm “a thinly disguised liquor outlet that soon pumped more whiskey into retail drugstores than any other wholesaler in Saskatchewan.”13 The company also benefitted from the corruption of the province’s liquor commission, which allowed a percentage of the liquor it seized to be sold back to Harry Bronfman, who then resold it an exorbitantly marked-up price.

Subsequent government investigations that were part of a Royal Commission would further allege that the Bronfman family “drug” company was “never engaged in the drug business, but confined its activities to the sale of alcohol in the western provinces,” adding that the company imported hundreds of thousands of gallons of alcohol from the United States.14 Out of the Bronfman brothers, it had been Sam who was sent to travel across Canada and the United States, which allowed him to build a vast network that included numerous American and Canadian distilleries and bootleggers. This network would, in a few years, prove essential to the Bronfmans, especially Sam, once Prohibition arrived in Canada’s southern neighbor, the United States.

THE MANY FRIENDS OF MR. SAM

Beyond the complicity of corrupt officials and doctors, a driving force behind the Bronfman family’s Prohibition era success was their ties, forged by Sam, to the Hudson’s Bay Company, long a dominant force in Canada’s economy backed by the political and economic elite of England since its founding in the 1600s. According to Nicholas Faith, Hudson’s Bay Company “trusted him [Sam] implicitly after he had refused to make any profit on a couple of thousand cases of Dewar’s whisky that Hudson’s Bay wanted to buy back from him.” However, in the cutthroat and often extremely violent world of bootlegging in Canada, “implicit trust” was unlikely to have been granted from just a single act.

More likely was the fact that Hudson’s Bay Company had long been the dominant force in Canada’s liquor industry and had every intention of continuing to operate its liquors business during Prohibition. The Bronfmans were sure to have caught their attention early on, not just through their mail order business, but because Harry Bronfman had quickly gained a reputation as “the king of bootleggers” who was able to easily skirt the law due to his contacts with corrupt local and provincial officials. His brother Sam sought to focus the entire family business on liquor early on in Prohibition, which would have made him a critical contact for any business seeking to clandestinely deal with the Bronfmans’ sale of spirits during this period.15

The Hudson’s Bay Company’s import of liquor into Canada by various means during Prohibition greatly aided the business of several distillers in England and Scotland. Many of those British distillers boasted close ties to the royal family and England’s political elite, like Dewar’s. These companies risked losing a considerable amount of income if their ability to export spirits to Canada had been entirely cut off, especially at a time when drinking in England was on the wane. The British government itself was clearly aware of these concerns and made the promotion of exports, liquor in particular, a key policy aimed at offsetting the country’s considerable war debts.16

Direct ties of the company to bootlegging in Canada emerged when British Colombia’s Prohibition Commissioner, Walter Findlay, was caught engaging in and profiting from the illegal liquor trade. At his trial, the existence of “a liquor delivery service run by the Hudson’s Bay Company” that sent alcohol to private addresses and spanned the nation was revealed, despite Findlay’s refusal to testify.17

Whatever the real story was behind the ties that were forged between Sam Bronfman and the Hudson’s Bay Company, the dominant distillers of England and Scotland that held great sway over the company’s liquor subsidiary would be critical to Bronfman’s success during and after Prohibition, and he to theirs.

Soon after the conclusion of Canadian prohibition, Prohibition went into effect in the United States in January 1920. The Bronfmans, now largely under Sam’s leadership, continued to import American liquor at incredible quantities, but at a much cheaper rate given that the new law had made it essentially worthless in its country of origin. That imported liquor was then mixed with raw alcohol and water. This degradation allowed the Bronfmans to ship a much larger quantity of the liquor than they had purchased back into the United States.18 Such was the story of the Bronfman family’s initial entry into the distilling business.

As stock from American distilleries began to run out in 1923, the Bronfmans built a distillery near Montreal. They named their newest venture Distillers Corporation Limited, the same name as the then-unrelated and significantly more prestigious Scottish company that included the top five whisky and gin producers in the British Isles. The name the Bronfmans had chosen was no coincidence, as the “audacious” name Sam had chosen for the family’s first distillery succeeded in attracting the nearimmediate attention of the Scottish firm. The Bronfman family subsequently formed a joint venture with the elite of Scotland’s and England’s liquor industry, thereby uniting the two companies that shared the name Distillers Corporation Limited. Their union also allowed the Bronfmans to secure the exclusive rights to import many of the top brands from “across the pond.”19 Roughly a decade later, in the 1930s, Samuel Bronfman purchased and built a number of distilleries in Scotland, further deepening his ties to the liquor barons of the “Old World.”

The ability of the Bronfmans to secure this deal at the time likely owed to Sam’s pre-existing ties to the Hudson’s Bay Company, which had previously imported many of the brands united under the British Distillers Company Limited. Another potential factor was the “chance” meeting between one of the Bronfman’s “middlemen,” Lewis Rosenstiel, and Winston Churchill in 1922. A year later, Bronfman traveled to Kentucky, where Rosenstiel was based at the time, and purchased an ailing distillery, the components of which were then shipped North and used to create the Bronfman’s first distillery.

Churchill had deep family and personal ties to the Hudson’s Bay Company and, from 1919 to 1922, he was in charge of Britain’s Colonial Office.20 In this capacity, Churchill refused to use British authority or influence to interfere with the liquor trade in any British colony, including in British-dominated “Rum Row” where the Bronfmans were also active. Churchill argued that England was not obligated to enforce the laws of another nation, and would later call Prohibition as a policy “an affront to the whole history of mankind.”21 Churchill would later emerge as a key investor in America’s post-Prohibition liquor industry, which Bronfman and Rosenstiel would quickly come to dominate.22

As the Bronfman family’s clout in the liquor industry grew after Prohibition, Sam Bronfman would later manage to personally meet Queen Elizabeth II of England and he would even create a Canadian whisky, Crown Royal, to specifically commemorate her visit to Canada in 1939.

Five years after creating the successful joint venture with Distillers Company Limited, the Bronfman’s Distillers Corporation Limited purchased Joseph E. Seagram’s and Sons Limited and their distillery in Water-loo, Ontario. The merged company became Seagram Company Limited, or Seagram’s, and would serve as the Bronfman family’s financial vehicle, not just for their ever-expanding liquor empire, but their subsequent interests in chemicals, oil, and entertainment.

Though his British and Scottish connections were important to his and Seagram’s success, Sam Bronfman’s rise as a global liquor baron also depended significantly on the ties he had forged, often through his “middlemen,” with more unsavory actors, namely key figures in North American organized crime. Many of them still live on in American urban legend and were discussed at length in the previous chapter, including Charles “Lucky” Luciano, Moe Dalitz, Abner “Longy” Zwillman, Meyer Lansky, and members of Detroit’s Purple Gang, among others.

Much of the Bronfmans’ early involvement in bootlegging took place across the Saskatchewan-North Dakota border in “boozoriums” where their liquor could be purchased in Canada and then moved to their final destination in the United States. Yet, the murder of a Bronfman brother-in-law turned associate, and the promise of more lucrative markets for Bronfman booze soon drew their attention elsewhere.

“We were late starters in the two most lucrative markets – on the high seas and across the Detroit River. What came out of the border trade in Saskatchewan was insignificant by comparison,” Bronfman once told Canadian journalist Terence Robertson. Despite being late to the game, “this was when we started to make our real money,” Bronfman recounted.23

The bootlegging operation of the Bronfmans would later extend far beyond the Canadian-US border, with the family establishing warehouses and fronts throughout the Caribbean and Mexico. They were encircling their main market – the United States – like prey.

Of course, with great profit came great risk, and though they avoided major legal trouble for their ties to bootlegging operations during American Prohibition, it caught up with them soon after. In 1934, the Bronfman brothers were charged with conspiracy “to violate the statutes of a friendly country” and for evading taxes on liquor that they had exported out of Canada.

Soon after the charges were announced, Sam Bronfman allegedly ordered the destruction of thousands of documents aimed at “shielding their early operations from inquisitorial eyes” and Bronfman-owned companies tied to smuggling and their assets would mysteriously vanish. As a result, the case against the Bronfmans ran into an insurmountable roadblock and the four Bronfman brothers were acquitted on all charges by the summer of 1935. They even managed to settle with US authorities, negotiating a $3 million settlement with the Treasury Department, a mere fraction of what they had gained during American Prohibition.

Most of Bronfman’s mob associates during American Prohibition were members of, or somehow tied to, the National Crime Syndicate. This Syndicate, described in detail in the previous chapter, was subsequently defined by the 1950s Senate investigative body, the Kefauver Committee, as a confederation of organized crime interests then dominated by the Italian-American mafia and the Jewish-American mob. During the Kefauver Committee’s investigation, some of the biggest players in the American Mafia named Bronfman as a central figure in their bootlegging operations.

Though Sam was careful to distance himself as much as possible from prominent criminals, he did have a somewhat cozy relationship with Meyer Lanksy, with Lansky’s wife later recounting how Bronfman had thrown lavish dinner parties for her husband. The relationship appears to have begun in 1923 when Lansky bought Sam prized tickets to the boxing championship between Jack Dempsey and Luis Firpo in New York, likely a gesture aimed at gaining Sam’s favor, or perhaps returning one. Subsequently, Lansky would, among other thing, offer exclusive protection of Bronfman’s booze shipments.

In his old age, Lansky, apparently bitter that Bronfman had managed to launder his post-Prohibition reputation into that of an “upstanding” member of North American aristocracy, would remark “Why is Lansky a ‘gangster’ and not the Bronfman and Rosenstiel families? I was involved with all of them in the 1920s, although they do not like to talk about it and change the subject when my name is mentioned.”24

The ties between the Bronfman family business and organized crime may explain why some past efforts to chronicle the rise of the Bronfmans were ill-fated, particularly during Sam Bronfman’s lifetime. The first person who attempted to write a biography of Samuel Bronfman, Terence Robertson, had traveled to New York to investigate Bronfman and the then-sprawling corporate empire of Seagram’s. While in New York, he had allegedly concluded the book, but had telephoned a journalist colleague back in Canada, distraught. In that phone call, Robertson claimed to have “found out things about Sam, they didn’t want me to write about.”

Robertson would call a second colleague, stressing that his “life had been threatened and we would know who was doing the threatening but that he would do the job himself.” after receiving the frantic call and fearing that Robertson’s life was in danger, the second journalist called the New York police, who quickly responded, only to find Robertson dying of barbiturate poisoning, to which he succumbed. Robertson’s lengthy interviews with Bronfman were never published, but still exist in manuscript form.

Subsequent attempts to author a biography of Sam Bronfman and his family’s rise to prominence also failed to make it to publication, such as the effort made by former editor of the Canadian edition of TIME magazine, John Scott, and another made by Canadian journalist Erna Paris. However, some books on the Bronfman family did emerge once Sam had reached old age, such as an account of the family by Peter Newman and a novel by Mordecai Richler believed to have been inspired by the Bronfmans. The Bronfmans apparently did not take kindly to their portrayal by either Newman or Richler, both of whom were Jewish, prompting the family behind Seagram’s to allege that both authors were “anti-Semitic Jews.” The Bronfman clan has always been sensitive to critical reports, given that their longstanding efforts to develop their reputation as elite “philanthropists” are marred by the evidence of the symbiotic relationship between their family business and organized crime.

THE MIDDLEMEN

Aside from these more personal ties, also crucial to the success of Seagram’s and the Bronfman family enterprise during this period were an assortment of “middlemen.” Two of these men were particularly essential to the Bronfman business – Joseph Reinfeld and the aforementioned Lewis “Lew” Rosenstiel. The two men were of extremely different temperaments, with Reinfeld being described as “a jovial, avuncular Jewish immigrant from Poland” whereas Rosenstiel was described as “loud, opinionated and domineering.”

Reinfeld served as a close advisor to Sam Bronfman as well as an important business associate as he was the principal purchaser of Seagram’s Whiskey. It was also Reinfeld who convinced Sam to “build up inventory” prior to and during Prohibition, which would help Bronfman secure a significant portion of the post-Prohibition liquor market. He also managed much of the in-person dealings with crime-linked individuals on Bronfman’s behalf, which was key to Bronfman’s winning strategy to mitigate legal risks and prevent further damage to his social reputation.

The end result saw Reinfeld buy large amounts of Seagram’s liquor, mainly at Rum Row, while ensuring that the Bronfmans did not have to directly deal with their final, crime-linked customers. However, in at least one instance, Reinfeld actually brought Sam Bronfman, and his family business, into close contact with a notorious mobster. By 1923, the Reinfeld syndicate was half-owned by Longy Zwillman, who Reinfeld sent to negotiate directly with Sam Bronfman. Bronfman was reportedly very impressed with Zwillman, then in his early 20s, calling him “well-behaved” and “studious looking,” adding that “you’d never guess he was a shtarker.”25

Reinfeld’s operation during Prohibition was massive, and massively profitable for Bronfman. Government investigators later revealed that Reinfeld had “imported nearly 40 percent of all the illicit alcohol consumed in the United States during Prohibition.” Retired US Treasury agents later testified that the Bronfman family were Reinfeld’s main supplier, while also alleging that much of Reinfeld’s ill-gotten profits had been laundered in Canada, some of it allegedly laundered with the help of Seagram’s employees. The use of Canadian institutions as laundries for Reinfeld is not only plausible but likely, given the intimate involvement of the Royal Bank of Canada in Rum Row, the same place where Reinfeld had received his shipments of Bronfman liquor.26 The Bronfmans themselves were known to operate a network of shell companies, some registered to fictitious individuals and linked to a series of both domestic and foreign bank accounts. This network facilitated the family’s own “elaborate money laundering operations,” according to Canadian historian Stephen Schneider.

The close association between Bronfman and Reinfeld would later come back to haunt them both, particularly when Reinfeld’s longtime bodyguard, James Rutkin, testified in front of the Kefauver Committee in the early 1950s. Rutkin would tell all regarding the “early days” of the Bronfman family business, including the relationships of both Bronfman and Reinfeld with mobsters like Zwillman and Lansky. Some Bronfman family biographers, like Nicholas Faith, have alleged that Rutkin sought to use his testimony in a failed attempt to blackmail the Bronfmans, threatening to reveal more if he was left uncompensated.

Among Rutkin’s claims regarding the Bronfmans, several pertained to the family’s hotel business in Canada that had preceded their liquor empire. Rutkin, describing the Bronfmans as “four brothers from Montreal,” teased the Kefauver Committee, stating first that “if you want to find out more about the [Bronfman owned] hotels, you can ask the Canadian Mounted Police, and they will tell you about the little hotels, and you can use your imagination.” He later added that these hotels serviced people who slept “very fast,” and that the same room would be rented “quite a few times during the night,” implying that the hotels were in fact brothels.27 Several Bronfman family biographers also mention these accusations, which had dogged the family since their earliest days in the hotel business. Some believe that Sam Bronfman tacitly confirmed that this was the case many years after Rutkin first made these claims, when he remarked “If they were [brothels], they were the best in the West!”28

Nevertheless, in the early 1950s at the time of the Kefauver hearings, the Bronfmans alleged that Rutkin’s claims were “absurd,” and they declined to pony up any of the “hush money” that Rutkin was rumored to have been seeking. Yet, despite their best efforts, Rutkin’s testimony, which received considerable publicity due to the televised broadcast of the hearings, created a whirlwind of rumors that refused to be snuffed out for some time, at least until Rutkin turned up dead, having allegedly slit his own throat with a borrowed razor in 1956.29

Lewis Rosenstiel, the other most prominent of Sam Bronfman’s Prohibition Era “middlemen,” saw his relationship with the Seagram’s chairman take a completely different trajectory than that of Bronfman and Reinfeld. As Prohibition neared its end, Rosenstiel and Bronfman would grow into bitter rivals, despite continuing to share many of the same contacts in the North America’s criminal underworld.

THE CHAIRMAN

While Sam Bronfman struggled with his would-be biographers, no biography was ever written of his one-time middleman and later chief rival, Lewis Rosenstiel. Of those books and other writings that do touch on Rosenstiel’s history and demeanor, few are favorable. For instance, a 1959 piece in Esquire offers one of the more favorable accounts, calling Rosenstiel “intelligent, articulate and extraordinarily aggressive,” adding that he often “slopes in his chair, plays with his tongue as he speaks, and utters his strong opinions with a growl, expressing dislike and contempt for anyone who might disagree.”30

Others, like Bronfman biographer Nicholas Faith, describe Rosenstiel as “loud, opinionated and domineering,” a “hulking figure who favored amber-tinted glasses, which he rarely removed, and large cigars to go with his status as one of the wealthiest men alive.”31 The New York Times obituary for Rosenstiel uses similar terms, referring to the liquor baron known to many simply as “the Chairman” as having been “a domineering man with [a] quick temper.”32

Official accounts of Rosenstiel’s past and how he built his company Schenley into a corporate behemoth seem oddly sanitized, not unlike the official accounts of the Bronfman family’s early days that decline to mention the darker side of their business model that was particularly important to their activities prior to the repeal of American Prohibition.

Born in 1891 in Cincinnati, Ohio, Rosenstiel – thanks to an unfortunate injury during a football match in his teenage years – dropped out of high school and went to work for his uncle at the Susquemac Distilling Company in Milton, Kentucky in 1907. Rosenstiel worked on largely menial tasks at the facility, including as a “pinhooker” rolling barrels in warehouses and as a belt splicer. His fortunes shifted dramatically from those humble beginnings during the era of American Prohibition, with little being known of his life during the period, aside from him allegedly leaving the tedious tasks of his uncle’s distillery behind to become a “whisky broker.”

According to official accounts, Rosenstiel turned to selling shoes and bonds once Prohibition set in, with his prior line of work in the distilling and sale of spirits drying up. Yet, somehow, the young Rosenstiel accumulated enough money to afford a vacation to the French Riviera in 1922. It was during that vacation that he would be lucky enough to score a “chance” meeting with Winston Churchill, “who advised him to prepare for the return of liquor sales in the United States,” per the New York Times.33 There is little, if any, context given in official accounts as to how or why a high-school dropout turned distillery worker and shoe salesman would have attracted the attention of a notorious elitist and member of the British aristocracy like Churchill.

As the story goes, Rosenstiel spent the next ten years of his life dutifully following Churchill’s advice. He somehow convinced one of the most powerful banks on Wall Street, Lehman Brothers, to offer him a massive loan to finance his acquisition of closed distilleries and to accumulate aged whisky inventories for the yet-to-materialize date of repeal. Again, no official explanation is offered as to how an elite banking institution like Lehman Brothers would grant someone with Rosenstiel’s background such a large amount of capital based merely on advice he had received from a British politician, suggesting there is more to the story.

Returning to the official narrative of Rosenstiel’s rise, we are told that Rosenstiel then incorporated Schenley Distillers Company in the wake of Repeal in 1933. He was conveniently well-placed to become “the most powerful figure in the distilled spirits business,” all thanks to him having heeded Churchill’s advice and thanks to a remarkable patience that he was never known to have possessed during any other point in his life.34 Indeed, per these same official sources, impatience, rather than patience, was one of Rosenstiel’s most well-known traits, with his characterization by media as a “domineering man with a quick temper” being one of many examples.

Of course, as should be clear to the reader, this narrative conveniently obfuscates any hint of illegality in Rosenstiel’s Prohibition era dealings and fails to mention Rosenstiel’s documented ties to organized crime figures or his role as a prominent purchaser of Bronfman liquor alongside Joseph Reinfeld and other Seagram’s “middlemen.” Years later, James P. Kelly, chief investigator for the Interstate and Foreign Commerce Committee of the New York House of Representatives, testified under oath that Rosenstiel had been part of an “underworld consortium” that bought Bronfman liquor and sold it throughout the United States during Prohibition.35

Key figures in this consortium, aside from Rosenstiel, included Meyer Lansky as well as Joe Fusco, an associate of Al Capone, and Joe Linsey, a Boston-based criminal associated with Joe Kennedy’s bootlegging operations. Kelly added that the Rosenstiel was “particularly close” to Lansky, and it later emerged that they had “owned points together” in mob-operated businesses. He was also reportedly close to Frank Costello, who was said to have attended a business meeting alongside Rosenstiel “to give [the meeting’s attendees] a message that Rosenstiel was one of their people.”36

One of Rosenstiel’s ex-wives, Susan Kaufman, later told journalist Anthony Summers that, in Summers’ words, “living with Rosenstiel was to live with the command structure of organized crime.” Kaufman’s testimony to Summers includes numerous, specific, and very detailed allegations of the various meetings between her ex-husband and organized crime figures she witnessed during their marriage, including business meetings where Rosenstiel was given “thousands and thousands and thousands of dollars in bundles of cash” from Lansky.

after Prohibition, Fusco and Linsey took their operations into the legal and legitimate business world, just as Rosenstiel had done. They set up legitimate companies in Chicago and Boston, respectively, to market Schenley products. As a result, Rosenstiel maintained his links to the criminal underworld long after publicly transitioning from bootlegger to businessman. Frequent dinner guests at Rosenstiel’s home in the years and decades after Prohibition included legendary figures of American organized crime, including Frank Costello, Sam Giancana, Santo Trafficante and Meyer Lansky. Lansky was known to address Rosenstiel as “Supreme Commander,” a name that Roy Cohn, Rosenstiel’s attorney and close friend, also used for the liquor baron.37

Rosenstiel’s transition from bootlegger to businessman very nearly included a direct partnership with Sam Bronfman. In 1929, as the end of Prohibition neared, Bronfman invested $585,000 in a Rosenstiel-owned distillery producing “medicinal spirits” and had acquired a 20% stake in Rosenstiel’s company. Per Sam, however, he concluded after visiting Rosenstiel’s distillery that it was “a piece of junk and … on the inside it was even worse” and he was allegedly offended at the inferiority of his whisky production method. It’s unclear if this was the actual motive for their falling out, but, regardless, their subsequent business and personal rivalries became legendary.

According to Nicholas Faith’s account of Bronfman’s life, the falling out with Rosenstiel, whatever the cause, took a tremendous emotional toll on the two men before it descended into a decades-long, acrimonious spat. Faith asserts that Bronfman’s failure to reach an agreement with Rosenstiel “really hit him, for he came down with severe flu” soon after calling off any possibility of a partnership. Despite being gravely ill, Bronfman told Rosenstiel that “we have nothing to discuss” when the latter had arrived to attempt to salvage a deal. Terence Robertson’s manuscript, as cited by Faith, states that Rosenstiel “all but wept as he begged ‘for just a minute with my friend.’”38

Their feud would subsequently escalate to such an extent that it would transcend business competition, with a 1959 article in Esquire noting that either man “appears willing to sacrifice profit to do the other in the eye.” Rosenstiel was known to refer to Bronfman and his business as “unscrupulous alien competition,” with alien in this instance meaning foreign, i.e. Canadian.39 Bronfman, for his part, was known to become angry rather quickly when Rosenstiel’s name or business came up, saying he had “no admiration” for the man, and would frequently refer to him as “Rosenschlemiel,” with “schlemiel” meaning something along the lines of simpleton or a born loser in Yiddish.40 It was also alleged that Bronfman’s lavish Seagram building in New York City had been planned to make “Rosenstiel’s 1930s-style offices in the Empire State Building look just a little shabby in their luxury.”41

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Part 2 of 2

THE KING OF BOURBON AND BLACKMAIL

Though both men had legendary tempers and a legendary feud to match, Bronfman and Rosenstiel had major differences in character, particularly in how they managed their respective businesses and in their personal lives. One of these differences was the fact that Sam Bronfman did not share Rosenstiel’s obsession with blackmail.

Indeed, reports of Rosenstiel’s behavior at his company’s offices, as cited by Nicholas Faith, included Rosenstiel having placed “bugging devices” throughout his offices. Per Faith, he would treat his employees “like dirt, sacking them at a moment’s notice” and then go “to the toilet to leave them time to compromise themselves by talking in his absence.” Those employees were “compromised” as their conversations were recorded by the devices that Rosenstiel had strewn about the premises.

Additional assertions made in court and under oath by one of Rosenstiel’s ex-wives held that Rosenstiel had also placed microphones throughout his home in order to record conversations that took place at social events he hosted for the alleged purpose of obtaining potential blackmail against his guests. In addition, several sources reported to the 1971 New York State Legislative Committee on Crime that Rosenstiel’s Manhattan home had been “wired from roof to basement with hidden microphones, so that he could spy on visitors and staff.”42

The system in Rosenstiel’s home had been installed by Fred Otash, an infamous private detective who had used electronic means to spy on the Kennedy family, Marilyn Monroe, and others. Otash later said that Rosenstiel’s home “was rigged to tape conversations for hours on end.” Otash had a penchant for blackmail himself, particularly sexual blackmail – he had once attempted to entrap John F. Kennedy using a call girl named “Sue Young” in the lead-up to the 1960 presidential election.43 As we’ll see shortly, Rosenstiel was also involved in a broader effort to obtain this variety of blackmail, which may explain why he had sought out the California-based Otash to bug his New York home.

Some of the sources that discuss Rosenstiel’s interest in blackmail also claim that Rosenstiel was bisexual. According to Nicholas Faith, discussions about Rosenstiel’s bisexuality among Schenley office employees were frequent enough for Rosenstiel to be referred to as “Rosie” around the office. Additional evidence for these claims later came from Rosenstiel’s fourth wife, Susan Kaufman.

Per Kaufman, whose previous marriage had collapsed because her first husband had been homosexual, she soon discovered that she had made a similar mistake in marrying Rosenstiel. Rosenstiel was reportedly un-interested in having sex with his new wife, but “went to great expense to have her dress up in clothes that made her look like a little girl.”44 He would later be discovered in bed with one of his lawyers, Roy Cohn, and shrugged it off to his wife by asking for some more “alone time” with his attorney. Kaufman remembered responding, “I’ve never seen Governor [Thomas] Dewey in bed with you,” as Dewey was also one of his attorneys at the time, and she walked out.45

Kaufman remembered the young Cohn, who was best known for his infamous stint as Joe McCarthy’s chief counsel during the height of the Red Scare, as flaunting his homosexuality whenever he was around Kaufman, openly caressing a former congressional associate in front of her and describing the homosexual antics of a close friend of his and Rosenstiel’s – Cardinal Spellman, one of the most powerful figures in the Catholic Church in North America. Cohn reportedly was so open with her because her first husband “had been gay and I must have understood because I’d stayed with him for nine years,” Kaufman later stated.46

In 1958, Kaufman accompanied her husband Lewis Rosenstiel to a “party” hosted by Cohn at the Plaza Hotel in New York. Kaufman recalled entering through a side entrance and taking an elevator to the 2nd or 3rd floor; her husband knew the way well enough that she “had the impression [he] had been there before.” The suite was one of the largest available at the hotel and it was “all done in light blue.” Inside the suite were Cohn and another figure closely associated with both Cohn and Rosenstiel: FBI Director J. Edgar Hoover. To Kaufman’s surprise, Hoover was wearing women’s clothes and wig, with Cohn introducing him as “Mary” in a bout of barely concealed laughter. “Mary” was also incidentally the nickname widely used among New York Catholic clergy for Cardinal Spellman, who was also alleged to attend other parties hosted by Cohn in the Plaza’s “blue suite.”47

After being served a few drinks, Kaufman recalled seeing “a couple of boys come in, young blond boys. I’d say about eighteen or nineteen. And then Roy [Cohn] makes the signal we should go into the bedroom.”48 Sexual activities between the “young blond boys,” Cohn and Hoover ensued, with Kaufman declining to participate after being urged to do so by her then-husband. The Rosenstiels then left, leaving the boys alone with Cohn and Hoover. Cohn later laughed about the incident to Kaufman, saying that “Mary Hoover” attends his parties regularly and that he would make sure to “arrive at the Plaza first with his clothes [the female clothes allegedly used by Hoover at the parties] in a suitcase.”49

Per her testimony, Kaufman was repulsed by the whole affair, but ended up attending another of these parties at the Plaza after Rosenstiel bribed her with “an expensive pair of earrings from Harry Winston’s.”50 The events of that evening played out as they had the time before, but the Rosenstiels later quarreled, and she never attended any more Cohn-hosted parties at the Plaza hotel.

These allegations made by Kaufman resulted in considerable efforts to discredit her testimony, especially during the 1971 New York State Legislative Committee on Crime. Kaufman had agreed to serve as a witness for the State regarding her exhusband’s ties to organized crime figures. The very week that she was due to testify, Kaufman was hit with an “attempted perjury” charge that was regarded as unprecedented and bizarre by lawyers and outraged the Committee’s Chairman and Chief Counsel. Kaufman still testified, but mostly behind closed doors, in executive session. Her testimony – several decades later – still remains sealed.

Members of the Committee believed at the time that the “attempted perjury” charges had been instigated by Lewis Rosenstiel himself in order to prevent his wife from testifying, as he had previously used similar tactics to protect his corrupt dealings.51 This “attempted perjury” charge has since been used by some authors to discredit Kaufman’s later testimony regarding her ex-husband and his associates.

However, the former Chief Counsel of the Crime Committee, New York Judge Edward McLaughlin, and Committee investigator William Gallinaro found Kaufman to be “an exceptionally good witness.”52 Mc-Laughlin later told journalist and Hoover biographer Anthony Summers, “I thought her absolutely truthful.… The woman’s power of recall was phenomenal. Everything she said was checked and double checked, and everything that was checkable turned out to be true.” Additional evidence corroborating Kaufman as a witness came from two male witnesses who supported the astonishing allegations of Hoover’s habit of cross-dressing, with those witnesses having learned of the former FBI director’s habit at a different time and place than the events described by Kaufman. They also had no knowledge of Hoover and the “blue suite” parties in New York.

In addition, Kaufman told Anthony Summers that she possessed photographs showing Hoover in the company of Lewis Rosenstiel’s organized crime associates. Though Summers did not see these pictures personally, they were confirmed as authentic and had been seen by journalist Mary Nichols of the Philadelphia Enquirer. Nichols told Summers “She did have suitcases of photographs that she had hauled away from her marriage to Lewis Rosenstiel. The ones I saw showed Hoover, lawyer Roy Cohn and Rosenstiel, at all sorts of social events with mobsters.”53

There is also evidence that, not only did these parties at the Plaza hotel take place, but that they were used to obtain sexual blackmail, with Kaufman asserting that her husband possessed pictures of Hoover wearing women’s clothes and that those images had been passed to Rosenstiel’s associate, mobster Meyer Lansky.54 Journalist and author Anthony Summers has noted that, given Rosenstiel’s interest and ability to have his residences and businesses bugged, “[Rosenstiel] was quite capable of having the sex sessions at the Plaza bugged or arranging for Edgar to be photographed in his female costumes.”55

In addition, New York attorney John Klotz, tasked with investigating Roy Cohn for a case well after Kaufman’s testimony, independently found evidence of the “blue suite” at the Plaza Hotel and its role in a sex extortion ring after combing through local government documents and information gathered by private detectives. It allegedly involved minors as well as young men aged eighteen and older. Klotz later summarized his findings, telling journalist and author Burton Hersh:

Roy Cohn was providing protection. There were a bunch of pedophiles involved. That’s where Cohn got his power from – blackmail.56

Further confirmation of Rosenstiel’s and Cohn’s activities in the “blue suite,” later determined to be Suite 233, comes from statements made by Cohn himself to former NYPD detective and ex-head of the department’s Human-Trafficking and Vice- Related Crimes Division, James Rothstein. Rothstein later told John DeCamp – a former Nebraska state senator who investigated the Franklin scandal of the 1980s – that Cohn had admitted to being part of a sexual blackmail operation targeting politicians with minors during a sit-down interview with the former detective.

Rothstein told DeCamp the following about Cohn:

Cohn’s job was to run the little boys. Say you had an admiral, a general, a congressman, who did not want to go along with the program. Cohn’s job was to set them up, then they would go along. Cohn told me that himself.57

Rothstein later told Paul David Collins, a former journalist turned researcher, that Cohn had also identified this sexual blackmail operation as being part of the anticommunist crusade of the time.58

The fact that Cohn, per Rothstein’s recollection, stated that this sex blackmail ring was part of the anti-communist crusade coupled with Hoover’s involvement in these “blue suite” events suggests that elements of the government, including Hoover’s FBI, may have been connected at a much broader level to the operation in a way that transcended Hoover’s own personal involvement.

Rothstein confirmed his statements to both DeCamp and Collins in an interview with me that was conducted in early 2020. He additionally told me that Cohn had told him that his role in this ring had originally come about because he himself had been entrapped and blackmailed, leading Rothstein to feel some sort of sympathy for Cohn.

For those that may find it hard to believe that such an operation would take place with the involvement of the FBI director, there are also other, related allegations to consider – that American intelligence operatives and organized crime had competed and then collaborated to blackmail Hoover years before Kaufman witnessed these events at the Plaza hotel beginning in 1958.

Lansky was credited with obtaining compromising photos of FBI Director J. Edgar Hoover sometime in the 1940s, which showed “Hoover in some kind of gay situation,” according to a former Lansky associate, who also said that Lansky had often said of Hoover, “I fixed that sonofabitch.” Meyer Lansky’s widow also later claimed that her husband had acquired “hard proof of Hoover’s homosexuality and used it to neutralize the FBI as a threat to his own operations.”59 The photos showed Hoover engaged in sexual activity, specifically oral sex, with his long-time friend, FBI Deputy Director Clyde Tolson.60 There is considerable, separate evidence from the period that the close, professional relationship between Hoover and Tolson was also intimate and that this was an “open secret” in Washington.61

At some point, these photos fell into the hands of CIA counterintelligence chief James J. Angleton, who later showed the photos to several other CIA officials, including John Weitz and Gordon Novel.62 Both Weitz and Novel later stated that the pictures they had seen showed Hoover engaged in oral sex on a man who Angleton identified as Tolson; however, only Hoover’s face was recognizable in the photographs.63 Angleton also claimed that the photos had been taken in 1946.64 Angleton was in charge of the CIA’s relationship with the FBI as well as Israeli intelligence until he left the agency in 1972. Angleton was also a CIA figure who had pushed for the Agency to forge ties with Meyer Lansky, raising the possibility that Angleton could have received the photo from Lansky.

However, Anthony Summers, in Official and Confidential: The Secret Life of J. Edgar Hoover, has argued that it was not Lansky, but William Donovan, the director of the OSS, who obtained the original photos of Hoover and either he, or another person at the OSS or early CIA, had later shared them with Lansky. Summers also states that “To [gangster Frank] Costello and Lansky, the ability to corrupt politicians, policemen and judges was fundamental to Mafia operations. The way they found to deal with Hoover, according to several mob sources, involved his homo-sexuality.”65

With the mobster associates of Rosenstiel being under significantly more pressure during the 1950s, in large part thanks to the Kefauver Committee, it’s possible that Hoover’s appearances at The Plaza Hotel may have served as additional “insurance” for these interests.

Hoover, for his part, was likely already used to the realities of being blackmailed by this point, given that his private sex life had been known to the mob and US intelligence community for years. He likely saw the opportunity to partake in the scheme as a means of amassing his own, massive collection of blackmail. With thick dossiers on friend and foe alike, Hoover’s office contained “secret files” on numerous powerful people in Washington and beyond, files he used to gain favors and protect his status as FBI director for as long as he wished. Even former OSS veterans like Richard Helms have made such claims, alleging that Hoover “played ‘a very skillful game’ with knowledge of the sexual habits of prominent people.”66

Further evidence for this comes from journalist and author Burton Hersh who alleges in his book Bobby and J. Edgar: The Historic Face-Off Between the Kennedys and J. Edgar Hoover That Transformed America that Hoover had also been tied to Sherman Kaminsky, who helped run a sexual blackmail operation in New York that involved young male prostitutes.67 Kaminsky claimed to have been New York-bred, but federal investigators later stated he was originally from Baltimore. Some reports claim Kaminsky had ties to Israel, having served in the Israel Defense Forces.68

The ring, which was called “The Chickens and the Bulls” by the NYPD, targeted prominent men who were closeted homosexuals throughout the United States, many of them married with families. Among those who had been blackmailed were a Navy admiral, two generals, a US congressman, a prominent surgeon, an Ivy League professor and well-known actors and television personalities.69 That operation was busted and investigated in a 1966 extortion probe led by Manhattan District Attorney Frank Hogan, though the FBI quickly took over the investigation and photos showing Hoover and Kaminsky together soon disappeared from the case file.70 Kaminsky successfully avoided arrest for 11 years, having “disappeared” from a New York courthouse undetected during his sentencing hearing.71

Why would Hoover have been involved with the activities of Kaminsky? There are only a few possibilities. One possibility is that Hoover had been blackmailed by Kaminsky, though it’s more likely that Kaminsky instead had ties to figures in organized crime that had already blackmailed Hoover long before. Another possibility is that Hoover was cozy to a second sexual blackmail operation targeting closeted homosexual men because he sought to pad his own library of blackmail for personal and professional gain.

What does seem clear is that Hoover was well aware of the power that amassing blackmail afforded and was willing to indulge in taboo behavior at the “blue suite” because he was no longer concerned about being extorted or manipulated with sexual blackmail in ways that would end his career or destroy his public image. He had fallen in with the very crowd that had reportedly blackmailed him, later developing a symbiotic relationship with that same network.

The most obvious, and troubling, symptom of this symbiosis was Hoover’s reluctance to tackle organized crime as FBI director. Hoover repeatedly declined to use the Bureau to target organized crime networks, referring to organized crime as a “local” problem in which the FBI did not need to intervene for most of his nearly fifty year stint as the top law enforcement administrator in the country.72

According to congressional crime consultant Ralph Salerno, Hoover’s apparent aversion to targeting organized crime networks, such as those in which Rosenstiel and Lansky figured prominently, “allowed organized crime to grow very strong in economic and political terms, so that it became a much bigger threat to the wellbeing of this country than it would have been if it had been addressed much sooner.”73

BUSINESS AS USUAL

Other aspects of Hoover’s symbiotic relationship with these organized crimetinged networks can also be seen in Hoover’s ties to Rosenstiel, and Rosenstiel’s close associate Roy Cohn, in the “above-board” worlds of “legitimate” business and politics.

Most records place the beginning of Hoover’s relationship with Rosenstiel as occurring in the 1950s, the same decade that that Hoover was allegedly attending Rosenstiel’s blackmail parties. Rosenstiel’s FBI file, obtained by Anthony Summers, cites the first Rosenstiel meeting as taking place in 1956.74 after requesting that meeting, Rosenstiel was granted a personal face-to-face meeting with the director in a matter of hours, a rare feat. However, Summers notes that there is evidence that the two men had met much earlier, as Hoover was on record showing an unusual concern in the FBI’s handling of Rosenstiel’s criminal links as early as 1939.75

The “blue suite” parties and blackmail may also explain the uncharacteristic ease with which a young Roy Cohn was able to meet with J. Edgar Hoover upon his arrival as a young man in Washington DC in 1952, an event that has puzzled Cohn’s biographers. Roy Cohn’s account of how he was able to meet Hoover in person, deemed “improbable” by Cohn biographer Nicholas von Hoffman, involves Hoover calling Cohn after the latter had unsuccessfully sought to go through the normal channels to communicate with the FBI Director.76 Cohn, only in his mid-20s, had been seeking Hoover’s aid in gathering support for a controversial presentment, which alleged communist subversion among United Nations staff.

Hoover, who is supposed to be talking to Cohn for the first time per “official” accounts, is alleged to have said “Roy, are you trying to see me?” To that, Cohn claimed to have responded “You’re darn right I’m trying to see you. It’s been rather difficult.” Hoover then offered, “Whenever you want to see me, you just pick up the phone and ask for me and you’ll be able to see me.” “Well, when can I see you?” Cohn had asked, with the director then saying, “Come on over.” Per Cohn, he was then seated in front of Hoover within ten minutes. Von Hoffman, who notes elsewhere in his Cohn biography that some of Cohn’s unlikely stories “do turn out to be true,” notes that the story is improbable, in part, because the only tie he could find between Cohn and Hoover at the time was a connection to George Sokolsky, the director of the American Jewish League Against Communism.

Also unlikely, per Von Hoffman, was Hoover’s alleged urging to Roy that “When you want to see me, call me directly. Don’t go through channels … [The Justice Department] is monitoring your calls at your own office across the way.” Von Hoffman states that this degree of frankness “with a junior whom he had only recently met” is at odds with Hoover’s reputation “as one of the most adept of mountain goats in negotiating the trails and passes of the federal bureaucracy.” Von Hoffman asks, “Would merely sharing a political outlook on the dangers of communism be enough to seduce Hoover, who was never indiscreet, into such indiscretions as advising Roy, all else failing, to threaten to quit and back it up by calling a press conference if there were no other way to shake the presentment loose?”

Von Hoffman concludes that Cohn’s story was inaccurate, though he notes that “Roy’s account of what Hoover told him is a story that somebody with a dangerous secret to hide might tell.”77 However, in the context of the “blue suite” parties at the Plaza hotel, it’s certainly possible that both Cohn’s account of his first “official” meeting with Hoover and his harboring of “a dangerous secret” are both true. This is supported from press reports of the same period that claim that, soon after “Cohn caught Hoover’s eye” in Washington DC, Hoover “showered Cohn with compliments and notes and photographs.”78 Author Burton Hersh similarly asserts that, soon after meeting, Hoover and Cohn “traded favors, effusive compliments, gifts and elaborate private dinners. It quickly became ‘Roy’ and ‘Edgar.’”79

The “official” story also holds that the only bond initially shared between Rosenstiel and Cohn, as it is alleged with Hoover and Cohn, was a shared commitment to anti-communism, which has similarly left biographers and observers of their relationship puzzled by “improbable” anecdotes similar to that described above. Yet, in an era where the Red Scare raged alongside the so-called Lavender Scare (which targeted homosexuals with the same fervor as the Red Scare targeted communists), the bonds forged between a group of men who shared their forbidden passions in a milieu of secretive orgies, blackmail, and organized crime, would have fostered a much stronger sense of camaraderie.

The surprising closeness shared among Rosenstiel, Cohn and Hoover can be seen in other arrangements. For instance, soon after meeting Hoover “officially” for the first time in 1956, Hoover sent Rosenstiel flowers when the latter fell ill. A year later, Rosenstiel was heard telling Hoover “Your wish is my command” during a meeting.80 That same year, Louis B. Nichols, Hoover’s “Number 2” at the Bureau for decades, was hired to become executive vice president of Rosenstiel’s empire of Schenley. Around this time, it was reported that Rosenstiel had “bought large quantities of books about Hoover and distributed them as gifts.”81 In addition, Rosenstiel had also bought no less than 25,000 copies of Masters of Deceit, a book written by Hoover about how to fight communism in the United States, which he sent “to schools around the country.”82

A few years later, in 1965, Nichols incorporated the J. Edgar Hoover Foundation. Rosenstiel was the principal contributor, giving the foundation 1000 shares of Schenley stock. Nichols also gave a smaller, yet unknown amount of Schenley shares to the foundation, while the American Jewish League Against Communism, of which Roy Cohn was now president, gave $500 to help start the foundation. A year later, the Dorothy H. and Lewis Rosenstiel Foundation gave $50,000 to the foundation. In 1968, the Rosenstiel Foundation gave an additional $1 million to the foundation that was made in the form of bonds of the Glen Alden Corporation, which took over Schenley industries that same year. A 1969 report in the Washington Post later noted that “nearly everyone directly associated with Nichols in the Hoover Foundation is or was connected with either the FBI or Schenleys. The report also noted that, despite lofty promises regarding the foundation’s activities, it spent hardly any money at the time the Washington Post’s report was published in 1969, suggesting that something about the foundation’s activities during that period was odd.83

Around this same period, Rosenstiel began to retire, selling his controlling interest to Glen Alden in 1968 and resigning as chairman and CEO of Schenley. While it seemed that Cohn would serve as Rosenstiel’s successor in matters of blackmail, it seems another man served as his successor in matters of business. Per Rosenstiel’s New York Times obituary, around the time he sold his control of Schenley to Glen Alden and retired, he also sold his Manhattan town house, bugged for blackmail, to Israeli- American businessman Meshulam Riklis.84 Riklis was then an “influential figure” at Glen Alden, whose rise had been regarded with skepticism by Wall Street and the press. Indeed, Riklis had absorbed so many companies, including Glen Alden/Schenley in 1972, into his Rapid-American Corporation that he was forced to defend himself publicly, insisting that the fuel for his corporate takeovers involved “no mystery money, no un-named associates, no Swiss-bank money.”85

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Endnotes

1 Peter C. Newman, Bronfman Dynasty: The Rothschilds of the New World (Toronto: McClelland and Stewart, 1978),66-68.

2 Michael R. Marrus, Samuel Bronfman: The Life and Times of Seagram's Mr. Sam (Hanover: Published by University Press of New England [for] Brandeis University Press, 1991), 15.

3 Marrus, Samuel Bronfman, 22.

4 Nicholas Faith, The Bronfmans: The Rise and Fall of the House of Seagram, 1st ed (New York: St. Martin's Press, 2006), 217-18.

5 Eli Yahri, "Seagram, The Canadian Encyclopedia," February 13, 2012, https://www.thecanadianencyclopedia.ca/ ... ny-limited.

6 Stephen Schneider, Iced: The Story of Organized Crime in Canada (Mississauga, Ont: Wiley, 2009), 199.

7 Richard Allen, "Social Gospel, The Canadian Encyclopedia," February 7, 2006, https://www.thecanadianencyclopedia.ca/ ... al-gospel; Leona Anderson, Bryan Hillis, and Margaret Sanche, "The Encyclopedia of Saskatchewan, Details," n.d., https://esask.uregina.ca/entry/religion.jsp

8 Faith, The Bronfmans, 28.

9 John M. Bumsted, The Peoples of Canada, Fourth edition (Don Mills, Ontario: Oxford University Press, 2014), 218-19.

10 Newman, Bronfman Dynasty, 74.

11 Daniel Okrent, Last Call: The Rise and Fall of Prohibition, First Scribner hardcover ed (New York: Scribner, 2010), chap. 10.

12 Faith, The Bronfmans, 34-5.

13 Marrus, Samuel Bronfman, 68.

14 Schneider, Iced, 200.

15 Faith, The Bronfmans, 34-5.

16 Okrent, Last Call, chap. 12.

17 Jesse Donaldson, "On BC Day, a Look at Five Wacky Stories from the Province's Past," The Tyee, August 5, 2019, https://thetyee.ca/Culture/2019108/05/B ... ast-Wacky- Stories/.

18 Okrent, Last Call, chap. 11.

19 Davin de Kergommeaux, "Whisky Heroes: Sam Bronfman, Seagram, Scotch Whisky," March 21, 2019, https://scotchwhisky.com/magazine/whisk ... anseagram/.

20 James W. Muller, "Two Churchills and the Hudson's Bay Company," APSA 2009 Toronto Meeting Paper (Rochester, NY: Social Science Research Network, September 3, 2009), https://papers.ssrn.com/abstract-1451764.

21 Okrent, Last Call, chap. 12.

22 Thomas Maier, "Prohibition and Profit: The Secret Kennedy-Churchill-Roosevelt Deals;' TIME, October 21,2014, https://time.com/3529756/kennedy-church ... ment-deal/.

23 Faith, The Bronfmans, 132. Note on Robertson's death. Source: Faith. Page 132?

24 Schneider, Iced, 203.

25 Faith, The Bronfmans, 64.

26 Okrent, Last Call, chap. 12.

27 Investigation of Organized Crime in Interstate Commerce, Hearings before the Special Committee to Investigate Organized Crime in Interstate Commerce (1950, 1951), p. 544, https://archive.org/details/investigati ... 4/mode/2up.

28 Schneider, Iced, 199.

29 Faith, The Bronfmans, 65.

30 Martin Mayer, "The Volatile Business;' Esquire, August 1959, https://classic.esquire.com/article/195 ... e-business.

31 Faith, The Bronfmans, 65.

32 Leonard Sloane, "Lewis Rosenstiel, Founder Of Schenley Empire, Dies," New York Times, January 22, 1976, https://www.nytimes.com/1976/01/22/arch ... ounder-of- schenley-empire-dies.html.

33 Sloane, Lewis Rosenstiel Dies.

34 Sloane, Lewis Rosenstiel Dies.

35 Nicholas Gage, "Ex-Head of Schenley Industries Is linked to Crime 'Consortium;" New York Times, February 19, 1971, https://www.nytimes.com/1971/02/19/arch ... -schenley- industries-is-linked-to-crime-consortium.html.

36 Anthony Summers, Official and Confidential: The Secret Life of J. Edgar Hoover (New York: Pocket Star Books, 1994), 285, https://archive.org/details/officialconfideOOOsumm.

37 Summers, Official and Confidential, 287.

38 Faith, The Bronfmans, 98-99.

39 Mayer, The Volatile Business.

40 Faith, The Bronfmans, 64.

41 Mayer, The Volatile Business.

42 Summers, Official and Confidential, 297.

43 M.A. Jones, "Potential Criminal Informant (PCI) Sue Young, Hollywood, Calif., Call Girl" (Archives.gov, July 26, 1960), https://www.archives.gov/files/research ... ses/docid- 32304320.p-df.

44 Summers, Official and Confidential, 291.

45 Summers, Official and Confidential, 292.

46 Summers, Official and Confidential, 292.

47 Lucian K. Truscott IV, "I Was Groped by a Man Called 'Mary," The World Changes but Not the Catholic Church," Salon, February 9, 2019, https://www.salon.com/2019/02/09/i-was-groped- by-a-man-called-mary-the-world-changes-but-not-the-catholic-church/.

48 Summers, Official and Confidential, 293.

49 Summers, Official and Confidential, 293.

50 Summers, Official and Confidential, 294.

51 Summers, Official and Confidential, 515.

52 Summers, Official and Confidential, 515.

53 Summers, Official and Confidential 516.

54 Michael Newton, The Mafia at Apalachin, 1957 (Jefferson, N.C: McFarland, 2012), 117.

55 Summers, Official and Confidential, 297.

56 Burton Hersh, Bobby and J. Edgar: The Historic Face-off between the Kennedys and J. Edgar Hoover That Transformed America (New York: Basic Books, 2008), 88.

57 John W. DeCamp, The Franklin Cover-up: Child Abuse, Satanism, and Murder in Nebraska (Lincoln, Neb: AWT, 1992), 179.

58 Terry Melanson, "The Ghost of Roy Cohn - Conspiracy Archive," August 24, 2014, https://www.conspiracyarchive.com/2014/ ... -of-roy-co n/.

59 Jerome A. Kroth, Conspiracy in Camelot: The Complete History of the Assassination of John Fitzgerald Kennedy (New York: Algora Pub, 2003), 233, https://books.google.cl/books? id=VStz10QcBOC.

60 "New Book Pictures J. Edgar Hoover as Drag Queen;' UPI, February 6, 1993, https://www.upi.com/Archives/1993/02/06 ... er-as-drag: Queen/10647289748001.

61 Many of the key pieces of evidence for Hoover's relationship with Tolson, as well as Hoover's closeted homosexuality, can be found in this article published by the UK's The Guardian: Anthony Summers, "The Secret Life of J Edgar Hoover;' The Guardian, December 31, 2011 , https://www.theguardian.com/film/2012/j ... secret-fbi.

62 "J. Edgar Hoover Was Homosexual, Blackmailed by Mob, Book Says," Los Angeles Times, February 6, 1993, https://www.latimes.com/archives/la-xp- ... 06-mn1078- story.html.

63 Summers, Official and Confidential, 280.

64 Jerome A. Kroth, Conspiracy in Camelot: The Complete History of the Assassination of John Fitzgerald Kennedy (New York: Algora Pub, 2003), 233.

65 Summers, Official and Confidential, 276.

66 Mark Riebling, Wedge: From Pearl Harbor to 9/11: How the Secret War Between the FBI and CIA Has Endangered National Security, 1st Touchstone ed. (New York: Simon & Schuster, 2002, n.d.),131.

67 Hersh, Bobby and J. Edgar, 88.

68 William McGowan, "The Chickens and the Bulls," Slate, July 11, 2012, https://slate.com/human-interest/2012/0 ... ncredible- fall-of-a-vicious-extortion-ring-that-p-reyed-on-p-rominent-ggy-men-in-the- 1960s.html.

69 McGowan, "The Chickens and the Bulls."

70 Hersh, Bobby and J. Edgar, 88.

71 Ronald Smothers, "Seize 11-Year Fugitive in Homosexual Blackmail Case," New York Times, January 14, 1978, https://www.nytimes.com/1978/01114/arch ... e-in-homo- sexual-blackmail-case.html.

72 Summers, Official and Confidential, 517.

73 Summers, Official and Confidential, 517.

74 Summers, Official and Confidential, 516.

75 Summers, Official and Confidential, 516.

76 Nicholas Von Hoffman, Citizen Cohn, 1st ed (New York: Doubleday, 1988), 123-24.

77 Von Hoffman, Citizen Cohn, 123-125.

78 Maxine Cheshire, "The Director," Washington Post, 1969, http;//jfk.hood.edu/Collection/Weisberg%20Subject%20Index%20Files/H%20Disk/Hoover %20J%20Edgar%20Foundation/Item%2005.pdf.

79 Hersh, Bobby and J. Edgar, 133-134.

80 Summers, Official and Confidential, 516.

81 Cheshire, "The Director."

82 Summers, Official and Confidential, 289.

83 Cheshire, "The Director."

84 Sloane, Lewis Rosenstiel Dies.

85 "CORPORATIONS: The Rapid Riser - TIME," June 6, 1960, https://web.archive.org/web/20111007012 ... -1,00.html.

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Part 1 of 2

CHAPTER 3. ORGANIZED CRIME AND THE STATE OF ISRAEL

STATE-BUILDING

In its July, 1971 obituary for Samuel Bronfman, the New York Times wrote that, after World War II, the liquor baron had “helped finance a secret purchase of Canadian weapons for troops of the Haganah.”1 Additional details on Bronfman’s role in that purchase, beyond its brief mention by the Times, are rather difficult to come by. Peter Newman, in his otherwise exhaustive The Bronfman Dynasty, writes that Sam “personally underwrote life insurance policies for Canadian pilots recruited to help Israel fight its 1948 war of independence.”2 However, it is also known that, a few years after Israel’s creation, in 1951, Bronfman would play a leading role in a similar, “secret purchase” for the Haganah’s successor, the Israel Defense Force (IDF). In that case, Bronfman specifically answered the call of Israel’s Shimon Peres, taking Peres to Ottawa, Canada to negotiate the transfer for $2 million worth of weapons to Israel. Bronfman then raised funds to cover the entire cost of the sizable arms cache.3

Yet, aside from that little is known of his earlier role in arming Zionist paramilitaries prior to Israel’s founding. As Newman noted, Bronfman preferred to remain tight-lipped on “Zionist matters,” despite his position as head of the Canadian Jewish Congress – an example of the family’s characteristic “quiet manipulation.” Regardless of the exact nature of Bronfman’s activities in this area, his connection to the Haganah was not unique for those in his social circles. Yet, even outside of Bronfman’s contacts, efforts to aid the Zionist paramilitary group, which would later form the backbone of the IDF, were already indicative of a wider tendency in pro-Zionist activism that swept across Canada, America, Latin America and beyond during the late 1940s.

What was at stake was the creation of Israel itself, as a sovereign political entity independent of the British, who, until 1948, had controlled Mandatory Palestine in accordance with treaties set up at the end of World War I. When the British Mandate ended in May 1958, Israel declared itself independent, and immediately entered into conflict with the Palestinians and a coalition of Arab forces. Those fighting to create Israel were able to assert themselves so forcefully largely because of the careful groundwork that had been laid out in advance by a number of individuals and groups, many of them working in the shadows.

Such was the historical mission of the Haganah (“Defense”), an organized Zionist paramilitary network that had been set up by the Jewish Agency – an activist branch of the World Zionist Organization (WZO). The Jewish Agency, under the leadership of David Ben-Gurion, oversaw the creation of numerous towns, villages, communal outposts and defense groups in Mandatory Palestine. The Jewish Agency would later atrophy, only to be relaunched by one of Leslie Wexner’s mentors, Max Fisher, in 1970.

The formation of the Haganah in 1920 was a major step forward towards the formation of the Israeli state. Vital to its functioning was the training and arms provided by the British military. Major General Orde Charles Wingate, who had been dispatched to help administer British control over the territories, worked closely with the Haganah. Wingate even organized joint British Army-Zionist paramilitary commando units dedicated to patrolling and suppressing Arab elements in the region. These were called the Special Night Squads.

In 1945, the Haganah began its effort to stockpile weapons, ammunition, aircraft, non-lethal supplies, and machine tools sourced from around the globe. In the US, Ben-Gurion reached out to a close associate, Zionist activist Rudolf Sonneborn, who had traveled to Palestine years earlier to survey the construction of Jewish villages on behalf of the World Zionist Organization.4 Under the leadership of Sonneborn, eighteen or so Jewish millionaires and billionaires were recruited into bankrolling the supply effort. Thus, the Sonneborn Institute, as it was known, was born.

The Institute, an activist collaboration of Zionist millionaires and billionaires that pursued specific, Zionism-related causes, would later serve as sort of a model for the “Mega Group,” founded years later by Leslie Wexner and Charles Bronfman in 1991. The Sonneborn Institute’s chief asset was a Haganah operative named Yehuda Arazi. During World War II, he served as a soldier in the Jewish Brigade, a British army unit that recruited its fighters from the immigrant populations living in Mandatory Palestine. By 1945, he was an old hand at gunrunning. Indeed, Arazi “had been active smuggling arms for the Haganah into Palestine from Europe since 1938.”5 Through these efforts, he developed an impressive roster of contacts, many of whom were tapped to set up front companies through which the Sonneborn Institute and the Haganah could carry out their activities. Ricky-Dale Calhoun wrote that:

[One] Arazi associate was Leonard Weisman, who was probably a member of the Sonneborn group. Weisman was a 34-year-old from Pittsburgh who had made a fortune in scrap metals and construction materials. His businesses included Materials Redistribution Company, a firm that dealt in scrap machinery; Paragon Design and Development Corporation, a company that traded in building materials; and Pratt Steamship Lines. A fourth Weisman company, Foundry Associates, Inc., existed only on paper. All assisted in the purchase and illegal export of arms from the United States.”6

Other front companies were organized by Nahum Bernstein, an attorney in New York City, that were used to source weapons and/or construct them from spare parts, and then export them overseas. Bernstein’s name can be found on the corporate registrations of firms like Machinery Processing and Converting Company, which “provided cover for the purchase and illegal export of armsmaking machines as well as armaments,” and Oved Trading Company, which supplied “legal cover for buying and transporting explosives.”7

There was also a trio of interlaced companies: Materials for Palestine, Inland Machinery and Metal Company, and the Eastern Development Company. Materials for Palestine was a charity through which money could be raised, while Inland Machinery actively shipped armaments and lethal munitions. Eastern Development, meanwhile, “exported legal nonmilitary goods and machinery to Palestine as relief supplies.” There is a possibility that Paul Helliwell, discussed in Chapter 1, had some connection to this company, as he was listed as the attorney for the similarly named Eastern Development Corporation. According to a 1951 article in the Miami News, this Eastern Development was doing business in Florida, but had been formed in Pittsburgh.8 As mentioned above, Leonard Weisman, the probable Sonneborn group member who worked with Arazi to create fronts for arms exporting, was also from Pittsburgh.

The potential presence of Helliwell in this mesh leads naturally to another question: was organized crime also involved in these efforts? Unlike the mysteries around Eastern Development, the role of organized crime in covertly arming the Haganah is well-documented. As these un-official arms trade networks spread across the US, gangsters and mobsters – many of whom actively identified with the Zionist cause – threw their hats into the ring. Early on, Arazi forged ties with Meyer Lansky, requesting aid in maritime transit for the arms. Lansky, in turn, contacted two of his associates who controlled New York City’s docks and the long-shoremen’s union, Albert Anastasia and Joe Adonis. The trio then “helped Israeli agents conceal the arms purchased for Israel, while arms bound for Egypt mysteriously fell overboard.”9 Lansky’s close associate, Bugsy Siegel, met with Reuven Dafne, a representative of the Haganah looking to raise funds. Dafne, as the story goes, told Siegel that the Zionists were looking to unshackle themselves from British rule and that the path to do this was to fight. Siegel told Dafne “I’m with you,” and for several weeks afterwards, the Haganah would receive suitcases “filled with $5 and $10 dollar bills – $50,000 in all.”10

Besides Lansky, one of the more active mobsters in the flow of arms was Joseph “Bayonne Joe” Zicarelli. According to files obtained from the Federal Bureau of Narcotics, Zicarelli was “alleged to have been involved in the traffic of arms and munitions sold to the government of Israel.”11 It was one of many destinations for Zicarelli’s arms: he also brokered arms sales to Cuba, Mexico, Venezuela, the Dominican Republic, and Nicaragua. The latter, as will be discussed shortly, was also active in the acquisition of arms for Israel. Zicarelli was close to Carmine Galante, a key player in the Bonanno mafia family, who would later become one of Roy Cohn’s main clients from the criminal underworld. Allegedly, Zicarelli had been the subject of a feud between Charles Tourine of the Genovese family and Galante, with each wanting to recruit him into their crime family.12 Galante won out, and it was under his watch that Zicarelli’s lucrative arms trade flourished. At one point in the 1950s, Zicarelli was dispatched to Montreal by Galante to work with the Canadian mobster Vincenzo Cotroni. Together, Zicarelli and Cotroni organized the import of large sums of heroin into the country, as part of the Canadian wing of the French Connection.

Zicarelli was also alleged to be a close business associate of Lewis Rosenstiel. Rosenstiel’s fourth wife Susan Kaufman testified that Zicarelli had been a secret partner New Jersey warehouses owned by Schenley Industries, Rosenstiel’s company. She furthered alleged that Rosenstiel had meetings with Zicarelli and Meyer Lansky.13 The connection to Schenley signals Zicarelli’s penchant for involving himself in quasi-legitimate businesses that acted as both “above-board” profit-turners and as fronts for less-than-reputable activities. Another one of these businesses was ABCO Vending, a cigarette vending machine company that was controlled by Zicarelli and Galante. Joining them there was Irwin “Steve” Schwartz, who later became infamous in the 1970s for his involvement in costly stock manipulation schemes. FBN files describe Schwartz as representing “the Galante-Zicarelli interests in the arms traffic, promotion and sale of worthless stocks and securities, and the cigarette vending business,” before adding that “Since 1946 Schwartz has been engaged in the traffic of arms, a good portion of which have been obtained from Communist Bloc nations and shipped first to Israel and later to Cuba. Associated with Schwartz in these ventures were Irving Schindler and Adolf Schwimmer.”14

Adolph “Al” Schwimmer was the founder of Israel Aircraft Industries, one of the country’s great military contractors known today as Israel Aerospace Industries (IAI). During the 1930s, he worked for Lockheed and TWA, and, after World War II broke out, he was affiliated in some capacity with the US Air Transport Command. Schwimmer would remain active down through the decades, with a tendency to crop up in various Cold War-era covert operations. Perhaps most notoriously, he emerged as a key player on the Israeli side of the Iran-Contra Affair, and by some accounts was the individual who conceived of the “arms-for-hostages” plot at the center of Oliver North’s complicated web. As for IAI, it would become owned, years later, by Israel’s richest man Shaul Eisenberg. Under Eisenberg, IAI would have close ties to Israeli intelligence, from which he drew most of the company’s senior staff.15

In his work securing materials for the Haganah, Schwimmer worked closely with Irvin “Swifty” Schindler. Schindler owned an airfreight company called Service Air, which Schwimmer relocated to California with funds from the Haganah. Together, Schwimmer and Schindler utilized the company as a means of acquiring aircraft and aircraft parts to be shipped to Palestine. Yet, with an embargo in place due to President Truman’s declaration of neutrality, Service Air was prohibited from sending them overseas. Schwimmer and Schindler, aided by Arazi, turned to the Haganah’s contacts in Panama. Soon, “legal ownership of the airplanes was transferred to the newly established Panamanian national airline LAPSA, allowing the aircraft to be legally flown to Panama” and from there they were moved abroad.16

In Chapter 7, which details the Iran-Contra Affair, Israel’s close-knit relationship with Panama is mentioned in greater detail. Yet, the origins of this relationship began here, with the efforts of the Haganah to arm Zionist forces in Palestine following World War II. It wasn’t, however, the only country in that region to have similar connections to Israel. Many of the people discussed in this chapter, like Bayonne Joe Zicarelli, were actively working with anti-communist forces in the Dominican Republic, Cuba, and elsewhere at the same time that they were working with the Haganah. One particularly important anti-communist force that was collaborating with the Haganah was the Somoza regime in Nicaragua.

The special relationship between the Zionist cause and Somoza’s Nicaragua was largely due to the heavy presence of United Fruit, the New York-Boston banana trading company whose influence in Latin America was to be fundamentally intertwined with the CIA’s activities in the region.17 In 1933, United Fruit had fallen under the control of Samuel Zemurray, whose Cuyamael Fruit Company – a favorite of top Wall Street firms like Lehman and Goldman Sachs – had merged with the company several years prior. Zemurray, during the 1940s, was a big backer of Zionist causes. He aided the supply of arms to the Haganah, and reportedly helped the organization acquire the SS Exodus, a steamship used to ferry refuges to Palestine, in 1946. United Fruit, which later became United Brands, is discussed throughout this book due to its persisting intelligence connections as well as the fact its main leadership later included members of Leslie Wexner’s inner circle and his two main mentors, Max Fisher and A. Alfred Taubman.

By 1947, as Truman’s embargo began to be enforced, Nicaragua started providing arms to the Haganah. Somoza reportedly profited directly from this venture: he “received 3.5. percent commission on all arms purchases made by the Haganah under Nicaraguan aegis.”18 A decade later, Israel returned the favor when Shimon Peres negotiated an arms deal with Somoza that transformed Israel’s emergent military-industrial complex into the primary supplier of weapons for Nicaragua.19 As will be discussed in Chapter 7, Israel was active in arming and training the Nicaraguan Contras, the US-backed paramilitary forces that opposed the Sandinista government, which had toppled the Somoza regime in the late 1970s. The entry of Israel into this conflict was guaranteed by this precise history – and the Reagan administration, as part of its propaganda campaign, was quick to paint the new, Sandinista-led government as violently anti-Semitic.

The relationship between the Haganah and Latin America wasn’t solely dependent upon the graces of Zemurray and United Fruit. Reportedly, Haganah officers called upon the services of Sam Kay, a Florida businessman and real estate developer, who had extensive contacts in Panama, Batista’s Cuba, and elsewhere. FBI files describe Kay as a “reputed international gangster,” and one of his close business associates was the Miami Beach hotel impresario Morris Lansburgh, who was himself a frontman for Meyer Lansky. Kay would later be linked to Florida mob boss Santo Trafficante, though the two were purported to have had a falling out that would almost cost Kay his life.

It was at this point where the Zionist interests melded with organized crime’s real estate ventures, casino operations, and slush funds at the door of the Caribbean. Soon, these connections would truly begin to sprawl outwards and become truly intercontinental in scope.

THE HOT MONEY WEB

During the Second World War,” writes Jim Hougan, Tibor Rosenbaum “became a hero for the resistance through his activities on behalf of the Jews. Using ‘Istvan Lukacs’ as a nom de guerre, he carried out a series of Mission Impossible rescues. In one instance he posed as a high-ranking Nazi officer, entered a concentration camp, and under ‘administrative pretext’ obtained the release of thirty doomed prisoners.”20 His subsequent activities, however, were less than heroic.

With high-level connections secured through his position as a delegate for the World Zionist Congress, Rosenbaum set up his Geneva bank, International Credit Bank (ICB). ICB regularly moved money for Mossad and for Israel’s Ministry of Defense. The British Sunday Times later reported in 1975 that “as much as [90%] of the Israeli Defense Ministry’s external budget flowed … through Rosenbaum’s bank.”21 It also moved money for organized crime. In 1967, an expose in LIFE magazine fingered ICB as the recipient of large sums of money skimmed off by the mob from the casinos they owned in Las Vegas, the Caribbean, and elsewhere.22

Overseeing the complex chains of inter-bank relations and transfer chains that enabled this “hot money” to flow around the globe was a series of banking institutions controlled by Meyer Lansky frontmen. The set-up was essentially as follows: casino skim (as well as profits generated by the drug trade and other organized crime rackets) was moved into two key offshore banks, the Bank of World Commerce (BWC) and Atlas Bank, the latter of which was a subsidiary of Rosenbaum’s ICB. The funds would then be moved to accounts held by ICB in Geneva, where they would be converted into loans and investments to complete the money laundering loop. As will be discussed shortly, some of these funds may have been used to finance real estate investments that were made by people connected to American and Israeli intelligence.

The organizer of Atlas, on behalf of ICB, was Sylvain Ferdmann. The expose in LIFE described Ferdmann as a “Swiss citizen who is an international banker and economist,” before adding that “US authorities have marked Ferdmann a fugitive … accused of interfering with the federal inquiry into the skimming racket.”23 Working alongside Ferdmann and Rosenbaum was a coterie of Lansky’s closest allies. Sitting on the board of ICB itself was Ed Levinson and John Pullman. Levinson, who was partnered with Lansky in the Miami International Airport Hotel, ran the “mob-controlled Fremont Hotel-Casino in Las Vegas.”24 Levinson was also tight with Clifford Jones, the lieutenant governor of Nevada between 1947 and 1954 who was also an alleged associate of Meyer Lansky.25

Sitting alongside Levinson on the ICB board was John Pullman, Lansky’s personal financial advisor. Pullman was also close to Lou Chesler, having becoming acquainted with the Canadian businessman in the 1940s. He subsequently introduced Chesler into Lanksy’s orbit. Soon, Chesler began managing Lansky’s interests in the Bahamas – including the development of hotels and casinos. At the same time, Pullman was organizing the Bank of World Commerce, the partner bank to Atlas Bank and correspondent bank to ICB.

Levinson and Pullman also sat on the board of BWC. An IRS report aptly described this bank as having been set up to maintain “a liquid supply of funds to be used for setting up new gambling casinos in the Caribbean wherever and whenever the opportunity presents itself.”26 They were joined on the board by Benjamin Siegelbaum, a money courier for Lansky and a prominent figure in organized crime circles in his own right. Besides BWC, Siegelbaum held posts at the Exchange and Investment Bank, a sort of Geneva-based counterpart bank to Rosenbaum’s ICB. R.T. Naylor, in his book Hot Money and the Politics of Debt, writes that, for a time, Exchange and Investment Bank was Lansky’s preferred financial institution – at least until his role in the bank was accidentally exposed by Chase Manhattan. This occurred after the bank found two of their employees using accounts there to spirit away embezzled funds. It was at this point that Lansky shifted the bulk of his business to Rosenbaum’s bank.

Aside from Geneva banking, Siegelbaum also dabbled in Florida real estate. His money backed one of the state’s large landowners, Major Realty, which had been co-founded in part by a Florida entrepreneur named Max Orovitz. Orovitz was, as Jonathan Marshall points out, “a legitimate businessman and an honored Jewish philanthropist, but no stranger to criminals.”27 He was partnered with Lou Chesler in both Florida real estate (albeit via Chesler’s General Development Company, not Major Realty) and in development projects in the Bahamas that ultimately spawned Resorts International, which was previously Mary Carter Paint and had been linked to both the mob, to former New York governor Thomas Dewey and to Paul Helliwell’s Castle Bank.

Orovitz was part of what was known as the “Miami Group” – a circle of organized crime-linked Jewish businessmen with holdings across various economic sectors in Florida and in Israel. Members of the Miami Group established Dan Hotels, a luxury hotel chain with locations in Israel and India, and also set up “Israel’s first successful oil drilling company, Israel Oil Ventures.”28 Israel Oil Ventures expanded its capacities considerably in 1960, when it purchased Israel-American Oil Corp – an oil venture that was intimately tied to organized crime via its holding in another oil firm, Rimrock Tidelands. A subsidiary of Rimrock Tidelands, Rimrock International, was of interest to a Senate investigation into “international narcotics traffic.” This was because Rimrock International’s managing director was Santo Sorge, who was described in the Senate report as “one of the most important Mafia leaders” and a liaison between American and Sicilian mafia clans.29

Compared to its fellow dark money conduits, Atlas Bank – later renamed the “Atlas Trust” – is something of a mystery. It not only sat at the intersection of Geneva-bound money flows, but was also tied to hot money from the Middle East. According to Alan Block, Atlas “was united in some shadowy way with Intra Bank in Beirut, Lebanon,” which maintained its own offshore entity in the Bahamas called Intra Bahamas Trust Ltd.30

Intra Bank was formed in 1951 by Yousef Beidas, a Christian Palestinian refugee who had been born into a prominent banking family. Just over a decade later, what began as a modest operation ballooned into a sprawling empire, at which point Beidas forged agreements with leading American banks. These included Bank of America and Chase Manhattan, and Beidas then placed branches of Intra Bank in the world’s important hotspots for hot money: London, Geneva, and the Caribbean. At home, in Lebanon, Intra held “20% of the country’s total deposits” and “56[%] of all the country’s banking assets.”31 There was also a deep relationship between Intra Bank and illicit activities of all types. As Jonathan Marshall notes:

Smugglers of all sorts availed themselves of Intra Bank’s services. It was a prime depository for many of the world’s leading arms traffickers, who received financing from Lebanese traders for illegal weapons sales in the Southern Arabian peninsula (Yemen and Aden), Cyprus, Sudan, Nigeria, Rhodesia, South Africa, and Kurdish communities in the Middle East. Wealthy Arabs with too many petrodollars on their hands, looking for a savvy bank in the region to look after their wealth, fattened its deposits further.… Lebanon was prized as a “haven for cash for anybody with a balance to hide – U.S. tax evaders, oil-rich sheiks who want to lay something by for the rainy day of revolution, and assorted racketeers and purveyors of stolen or smuggled wealth from all over the world,” observed LIFE magazine in 1967.32

Naturally, this sort of environment made Intra Bank an attractive financial institution for the CIA, and the bank helped transform Beirut into a core hub for the Agency’s covert operations in the Middle East. Marshall reports that Beidas in particular had a “personal touch” when it came to dealing with the CIA – he was even seen “taking CIA officers into his private office to handle their checks.”33 Sitting on the board of directors of Intra Bank was Kamal Adham, the head of Saudi intelligence and a cousin of the infamous arms dealer Adnan Khashoggi – a later key player in Iran-Contra, the BCCI affair, and numerous other covert activities. According to the Congressional BCCI Report, Adnan “was the CIA’s principle liaison for the entire Middle East from the mid-1960s through 1979.”34

Intra Bank was identified by American law enforcement as being a major laundromat and source of funding for the global drug trade, a sizable portion of which was based in Lebanon. This was thanks to the country’s position as a key node in the famed French Connection, as Lebanon was a major source of hashish, raw opium, and even refined heroin that was destined for black markets in Europe and North America.

This node of the international drug trade was largely controlled by Sami Khoury and his partner, Omar Makkouk. They had forged close ties to the Lebanese political establishment and law enforcement community, generating an atmosphere of generalized corruption that gained Khoury the nickname of “the Untouchable.” Khoury’s ties soon expanded overseas. According to a CIA report, Corsican organized crime figures allied with Khoury had made inroads into “the highest levels of French government, industry and society, including the cabinet, police, and military.”35

Khoury also enjoyed protection from Israel. James Attie, an agent of the Federal Bureau of Narcotics (FBN) assigned to the Middle East, reported that the drug lord had provided thousands of guns to Israel, and that the country had “provided the contacts and money that enabled Khoury to move narcotics across Europe.”36 Intriguingly, another figure implicated by the FBN in the flow of drugs from Lebanon to Europe was the banker Edmond Safra, whose connection to BCCI, Iran-Contra, and figures like Robert Maxwell and Jeffrey Epstein is discussed in Chapter 7.37 Safra was also a Zionist with strong ties to Israel. For instance, during the 1980s, he served on the board of overseers of B’nai B’rith International, seated alongside figures like Edgar M. Bronfman and Max Fisher.

One of Intra Bank’s most lucrative holdings was the Casino du Liban, a gambling establishment outside of Beirut. The casino was a hot-spot for the international jet-set as well as a meeting place for various figures from the underworld who regularly rubbed shoulders with elites. According to Jonathan Marshall, the Casino du Liban “was a favorite playground for Saudi sheiks and rich Arab businessmen, such as Adnan Khashoggi.… It was also a favorite gathering place for foreign businessmen, diplomats and spies.”38 Jim Hougan, meanwhile, writes that the casino, at its height, was “said to be the biggest gambling emporium in the world – dwarfing the Sands, the Dunes, the Flamingo, and Monte Carlo.”39

At the Casino du Liban, gambling concessions were held by Marcel Francisci, the leader of the Corsican underworld. In the 1940s, Francisci allied himself with Sami Khoury, and, prior to his murder in 1968, he forged a close working relationship between French and Italian gangsters. “Mr. Heroin,” as he was known by American authorities, “was the man with the international perspective.” As a result of his other connections to Francisci and others, Khoury did perhaps more than anyone to maintain the French connection drug pipeline.40 Francisci was also a partner with Meyer Lansky, who was likewise known to haunt the Casino du Liban from time to time.41

Intra Bank’s peculiarities make a little more sense when one considers that, for bankers and organized criminals alike, there is often money to be made on both sides of any given conflict. After all, this was a bank that had been founded by someone who had fled the Haganah’s activities in Palestine – and a casino that, according to Jim Hougan, would siphon money off to finance the Palestine Liberation Organization (PLO).42 Yet, at the same time, Zionist-aligned gangsters, bankers and other figures were caught up in its web. This apparent contradiction was ultimately indicative of a trend that would grow in the 1970s and 1980s: a “behind-the-scenes” alignment between the ruling elites of Arab societies, enriched by the petrodollar system, and the Israeli business class and security apparatus. This tension-filled, often contradictory and ever-shifting alignment was of considerable interest to the US, which often found itself serving as the mediator between these two forces. The US, of course, would use that role as its pivot-point in its attempts to dominate the Middle East. This environment was fertile soil for crooks, businessmen and operatives of all types – many of whom were interlaced with the command structures of Western (and sometimes Eastern) intelligence services.

BANKERS AND TANKERS: THE WORLD OF BRUCE RAPPAPORT

While he was President Ronald Reagan’s director of the CIA, William Casey, maintained – much to the chagrin of many in the Agency – an informal intelligence apparatus composed of his close friends and associates. Nicknamed the “Hardy Boys,” this group lacked CIA clearances but its members “had their own back door, so to speak, into Langley. They would ride upstairs in Casey’s own elevator.”43 Among this clique was Max Hugel, who managed to be appointed deputy director of the CIA before his history of dubious stock trading caught up with him. Hugel makes a brief appearance later, in Chapter 10.

Other members, who will also be discussed in later chapters of this book, included John Shaheen and Robert B. Anderson. Shaheen, an oil trader, played a role in the October Surprise affair, while Robert B. Anderson’s career veered from being a prominent figure in the Eisenhower administration to being disbarred for money laundering in 1980s. One of Casey’s most important friends, however, was Bruce Rappaport.

Across the latter half of the twentieth century, Rappaport left a string of business deals that were mind-numbing in their complexity and tied to fraud, intelligence-linked bust-out operations, and backroom dealings, all of which was facilitated by a sophisticated web of interlocking shipping companies, banks, oil companies, mines, and numerous other holdings. Rappaport and Casey were sometimes co-participants in these activities, some of which predated Casey’s time at the CIA. During the 1980s, they were also known to be golfing buddies, and made frequent visits together to the Deepdale Golf Club on Long Island.

“When Rappaport visited Deepdale,” writes Alan Block, the author of an exhaustive study on his life and times, “his chauffeur was often Louis Filardo, an alleged associate of New York area mobsters.”44 By the late 1980s – if not earlier – he was tied to Russian organized crime interests, including Semion Mogilevich, the “boss of bosses” of Russian crime syndicates who makes several appearances later in this book. With a position on the FBI’s top 10 most wanted list, Mogilevich is described by the bureau as a leader in “weapons trafficking, contract murders, extortion, drug trafficking, and prostitution on an international scale.”45 Interestingly, it is quite possible that Rappaport had been introduced to Mogilevich by none other than Robert Maxwell, who, by the late 1980s, had become a key business partner of Mogilevich’s and facilitated Mogilevich’s entry into the Israeli and US financial systems. Another contact of Mogilevich’s crime networks was the aforementioned banker Edmond Safra, who was acquainted with both Maxwell and Rappaport.46

Rappaport’s origins are murky, though a few facts are known. He was born in Haifa, Palestine, in 1922 to a family that had settled there from Ukraine. At some point he earned a law degree, and spent time as a judge after Israel’s founding. He also served in the IDF, achieving the rank equivalent to major. His military career, however, had begun before the formation of the state of Israel in 1948.
Rappaport has stated that he spent a portion of World War II fighting with the British Army, who dispatched him to Africa. He may have been a member of the African Auxiliary Pioneer Corps, later shortened to the African Pioneer Corps. The Corps had existed from 1941 until 1946, and had started off as a logistic support unit that gradually expanded to include combat capabilities. Many of the African Pioneers were attached to the Ninth Army, one of the British field armies that was part of the Middle East Command. Rappaport was also reportedly a member of the Special Interrogation Group (SIG), the British commando group made up Jewish volunteers from Mandatory Palestine. SIG recruited heavily from the ranks of the Haganah, the Irgun and the Special Night Squads.

After the war, Rappaport joined the 6th Airborne Division, another British Army outfit. This was an airborne infantry division that had been deployed to Palestine in the late 1940s, and worked closely with Jewish groups in the region to administer the territories until Israel’s creation in 1948. The 6th Airborne, which had a fairly significant casualty rate among its personnel, worked to regulate and balance the competing interests of Jewish and Arab factions in the region, while also laying the logistical groundwork for the steady influx of refugees from Europe.

During his time with the 6th Airborne, Rappaport helped organize Israel’s military police. Soon, however, he began to focus more on his another of his interests – the world of criminal enterprises and covert operations. According to Alan Block, a Scotland Yard report provided some of the earliest known information on Rappaport’s shadier activities, charging that “in the early 1950s, Rappaport and Teddy Kollek, who became the charismatic mayor of Jerusalem, devised a scam on construction materials serious enough to produce warrants.”47 Israeli newspapers reported a similar story, but sometimes Paul Kollek – Teddy’s brother – was instead identified as Rappaport’s partner. Regardless of which Kollek was actually involved, Rappaport’s proximity to the Kollek brothers points to his own proximity to the centers of power in nascent Israel. This connection is also one that leads back to the Haganah and the inter-mixing of intelligence and organized crime: Teddy Kollek, in the 1940s, “ran the day-to-day operations of the arms procurement” in New York for the Haganah, which brought him into contact with the city’s criminal elements.48 His close contacts included Al Schwimmer and Yehuda Arazi, and he worked with the two in delivering aircraft to Israel by way of intermediaries in South America.

Kollek’s activities put him on the radar of British intelligence and their interest in him was multi-fold. On the one hand, he was treated with suspicion: “His phone was bugged, his bags were searched” and his movements were consistently tracked.49 On the other hand, he was actively courted by MI5 – first indirectly, and then later directly. Kollek’s main contact with British intelligence was through an MI5 officer named Simkin. The two had a mutual friend, Ben Aharon, who was reportedly an ardent Bolshevik who would subsequently become head of the Histadrut, the centralized body that coordinated Israel’s trade unions. Aharon’s wife, Miriam, worked for the Shai, the intelligence apparatus of the Haganah.

After his scam with one of the Kollek brothers went bust, Rappaport fled Israel. Over the course of his lifetime, he held passports for numerous countries: he was listed as a citizen of Panama, Costa Rica, Israel, and Switzerland. It was the latter location where he settled down in the early 1950s. Early support for his Swiss ventures came from the Société Générale de Surveillance (SGS), a Genevabased multinational that provides inspection and verification services for international trade.50 Besides SGS, another entity that helped Rappaport launch his early activities was Swiss-Israel Trade Bank, headquartered in Geneva. According to Rappaport, he knew Swiss-Israel’s owner, who provided him with loans.51 Interestingly, the bank’s original founder and owner – likely who Rappaport was referring to – was Gideon Persky.52

Gideon was the brother of Shimon Peres, the leading Israeli Labor Party politician who would later serve as both president and prime minister of the country and become a close friend of Robert Maxwell and, later, his daughter Isabel. Years later, Ehud Barak, who would later serve as Israel’s Defense Minister and Prime Minister, alleged that Shimon Peres had been the person who had originally introduced him to Jeffrey Epstein.53 Shimon, a veteran of the Haganah, had joined the IDF towards the end of the 1940s, and was appointed by David Ben-Gurion as the chief purchaser of munitions for Israel’s military. By 1953, Shimon headed Israel’s Ministry of Defense. According to Jonathan Nitzan and Shimshon Bichler, Shimon’s control over defense spending greatly benefited the businesses of his brother.

That Swiss-Israel helped prop up Rappaport is significant, as it was effectively a Mossad front in Europe.54 Overseeing the bank’s daily operations was Yehuda Assia, who was actively on the Mossad payroll. Under his direction, the bank both raised funds for the bank and acted as a conduit for the financing of its international operations. It was also utilized to raise money for the construction of nuclear reactors that played a major role in Israel’s covert construction of nuclear weapons. Avner Cohen, in his book Israel and the Bomb, writes that Ben-Gurion and Shimon Peres “conducted [the management of funds] outside the official state budget,” and had enlisted the aid of an American-Jewish fundraiser and businessman named Abraham Feinberg to locate private donors.55 Feinberg ran American Bank & Trust, a subsidiary of Swiss-Israel.56

There are other lines running from Swiss-Israel to the worlds of organized crime and – unsurprisingly – to Helliwell’s banking complex. Prior to his relocation to Geneva to take over the operations of Swiss-Israel, Yehuda Assia spent World War II in Thailand, where he met General Phao Sriyanonda.57 During the 1950s, Phao spent a considerable amount of time in Geneva, where he lived with Assia. As mentioned in Chapter 1, Phao was closely connected to Helliwell, and stood at a nexus of American intelligence’s complicity in the opium trade during the post-war period.

In 1960, Assia was contacted by Irving Davidson – a powerful lobbyist whose clients included the CIA, the Teamsters, Texas oil giant Clinton Murchison, and the state of Israel – concerning a Bahamian bank called Guarantee Trust Company.58 Guarantee Trust was run by a major supporter of Israel named Abe Multer and was one of the offshore entities that handled hot money flows from the Teamsters pension fund and from other organized criminal activities, such as the skim from casinos. The vice chairman of the bank was Leonard Bursten, a former director of Miami National Bank – which, as previously mentioned in Chapter 1, had been founded with the aid of a loan from the Teamster pension fund and had employed the services of Paul Helliwell’s law firm.

With these early ties, Rappaport’s empire began to expand in all directions, interlocking with shipping and financial interests all over the world. This process began in 1959, with the creation of International Maritime Services and International Maritime Supplies Company Limited. The latter company was closely linked to a shipping concern in the UK called Wilson (London & International) Limited, which was soon joined by a trio of major maritime companies. These were, per Alan Block, “a Dutch company, N.S. Frank & Zoon, N.V.; the American Maritime Supply Service Inc., based in Chicago; and the Italian Maritime Supplies Co. Ltd. Rappaport noted with glee that with three other firms buying into International Maritime … it would be possible to have a shipping clientele of 161 firms that will cover the entire world.”59

In those early years, Rappaport formed what would be a lifelong connection to the Kulukundis family, a Greek shipping clan who had set up shop in the United States and in Great Britain. Michael Kulukundis was the co-organizer of International Maritime Supplies, and court documents show that, as early as 1961, the pair were using the company to run scams and loot the coffers of unsuspecting businesses.60 At the same time, the Kulukundis family advanced their own shipping interests through London & Overseas Freighters, which, in time, would boast an impressive fleet of tankers that played a significant role in the global oil trade. Some of the affairs of the Kulukundis family will be discussed in Chapter 6.

In the early 1960s, Inter Maritime Supplies owned a stake in London & Overseas Freighters. It is worth mentioning that London & Overseas was formed by the Kulukundis family with their cousins, the Mavroleon family. As will be noted in Chapter 15, the Mavroleons were themselves connected to the circles around Jeffrey Epstein and Ghislaine Maxwell. For several years, Ghislaine Maxwell dated Gianfranco Cicogna, whose mother had been married to the patriarch of the Mavroleon family – and original founder of London & Overseas – Basil “Bluey” Mavroleon. Contact information for Bluey Mavroleon and his son, Nicholas Mavroleon (Gianfranco’s half-brother), can be found in Epstein’s black book of contacts.

It wasn’t until 1965 that Rappaport set up the institution that would later stand at the center of his complex network of firms and money conduits: Inter Maritime Bank (IMB). IMB, writes Block, “had A and B shareholders.” The various holders of Class B stock were representatives of banking institutions that were in business with Rappaport. These included Klaus Uilke Polstra, representing Bank M. van Embden, and Rolando Zoppi, representing Weisscredit, a bank in the Swiss Canton of Ticino. Nestled near the border of Swiss and Italy, Weisscredit was identified by the US State Department as a bank utilized by numerous Italians involved with organized crime to hide their money from financial authorities in their home country.61 Zoppi would wind up with a fiveyear prison sentence in 1975 when Weisscredit lost some $150 million of depositors’ money due to “fraud and mismanagement in high-risk speculative operations.”62

Another holder of Class B stock was David Hodara, from the Swiss financial outfit Sofigest. Sofigest would later be involved in the strange affairs of Investors Overseas Services, an international mutual fund and capital flight apparatus with ties to Tibor Rosenbaum and Meyer Lansky. Later, Sofigest would emerge in Brazil, where it was involved in everything from a joint venture with Fiat to frauds perpetuated by the infamous Naji Nahas.

When it came to the holders of Class A stock, things were a bit more limited. The bulk was held by Rappaport himself, albeit filtered through various other companies that he either owned or controlled. The rest were held by E.P. Barry – the OSS veteran who, as mentioned in Chapter 1 was one of the primary figures in Paul Helliwell’s Florida banking network. In fact, at the same time that Barry was involved with HMT/Florida Shares, the holding company for some of Helliwell’s banks, he came to hold IMB Class A shares. This link to the world of Helliwell would endure: one of Rappaport’s chief financial allies, and an architect of a large number of his ventures, was Helliwell’s banking partner Burton Kanter, also an affiliate of the mob.

Over the decades, there has been a slow and steady trickle of news articles in major publications that examine Bruce Rappaport. In 1988, the New York Times published on Rappaport entitled “A Secret Emperor of Oil and Shipping.”63 The article described how Rappaport had:

[…]developed a reputation for both openness and secrecy. On one hand, Mr. Rappaport – who is said by some associates to be a billionaire – sponsors golf and tennis tournaments and gives huge sums to a host of charities, especially medical and Jewish ones. On the other hand, former and current business associates say Mr. Rappaport is involved in hundreds of companies, registered in remote places like Liberia and Panama, to run his banking, shipping and oil empire.64

The appearance of Rappaport in Liberia is particularly interesting. It was there that he had established one of his many Inter Maritime outfits; in this case, it was Inter Maritime Owners Corporation of Monrovia. Liberia was a favorite for owners of shipping companies: besides the low tax rates, the astoundingly lax regulation, and the degree of bank secrecy, the country boasts a robust flags of convenience system, which “allows ship owners to register their vessels in an alternative sovereign to their place of origin.”65 Liberia’s shipping registry system also has some unique characteristics: it was managed not in Liberia itself, but was overseen by International Bank, located in Washington DC. The longtime controller of International Bank, George Olmsted, would end up on the periphery of the BCCI affair, discussed later in Chapter 7.

Rappaport wasn’t a lone figure in this network with ties to Liberia; in fact, there is every indication that Liberia was of immense importance to a number of the individuals that have discussed in this chapter. Tibor Rosenbaum, for example, was listed as the managing director of Swiss-Liberian Finance Corporation in 1954. That year, Swiss-Liberian Finance Corporation provided a multi-million dollar line of credit to help capitalize the Bank of Liberia Inc. – a development bank partially controlled by the Liberian government.66 Other capital inflows for the Bank of Liberia came from the Bank of Monrovia and the Liberian Trade and Development Corp (TRADEVCO). The Bank of Monrovia had first been owned by the Firestone Tire & Rubber Company before it was acquired by the First National City Bank, an institution controlled by the Rockefeller family.67 TRADEVCO, meanwhile, was controlled by a group of Italian banks.

Tax banking laws and the flags of convenience system certainly helped attract people to Liberia. Another may have been the lucrative diamond trade: during the 1950s, the country became the primary transshipment point for the flow of diamonds from countries like Sierra Leone to diamond cutting hubs.68 Many of these hubs were located in Antwerp and in Israel. In Israel, one of the major banks involved in the financing of the diamond cutting industry was Bank Leumi, which opened offices and branches in Liberia early on. The board of Bank Leumi reportedly interlocked with that of Rosenbaum’s ICB – while Rosenbaum himself was affiliated with Kupat Am Bank, a subsidiary of Bank Leumi.

Serving as honorary counsel to Liberia in this period was a man named Louis Mortimer Bloomfield. He was a powerful Canadian attorney with an exhaustive roster of connections to all sorts of elite figures and institutions, starting with the law firm he belonged to: Phillips & Vineberg of Montreal. Through its senior copartner Lazarus Phillips, it was connected to the Royal Bank of Canada. Libbie and Frank Park, in their classic study of the Canadian elite establishment, The Anatomy of Big Business, show that this bank was one of the commanding institutions in Canada, and acted as a conduit for the entry of foreign capital originating in the US, the UK and Belgium.69

The firm was also closely tied to the Bronfman family. Peter Newman writes in The Bronfman Dynasty that “Because of the many family feuds, two of Montreal’s best lawyers – Lazarus Phillips and Philip Vineberg – have become ex officio members of the family, charged with arbitrating among its several factions.”70 It has been alleged that Bloomfield himself did work on behalf of the Bronfmans. While this is by no means outside the realm of possibility, it is difficult to find evidence to confirm this particular claim. What is known and extensively documented, however, is Bloomfield’s ties to a mysterious entity in Rome that was tied to American, Italian, French, and Israeli intelligence networks – as well as to international organized criminal actors and their banks.

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Part 2 of 2

MOSSAD GOES TO ROME

In 1967, Gershon Peres, a brother of Shimon Peres, joined the board of Centro Mondiale Commerciale (CMC), the Italian subsidiary of Permindex – a world trade center organization headquartered first in Basel and then in Rome and made famous by New Orleans district attorney Jim Garrison’s investigation into the assassination of John F. Kennedy.71 Ostensibly, the purpose of Permindex- CMC was to maintain what was effectively a permanent world’s fair – a centralized site where businessmen could display their wares, deals could be made, and important corporations could maintain offices. On the back end, however, Permindex-CMC was tied into various covert networks. What first placed Garrison on the trail of Permindex, for example, was the presence of Clay Shaw, an apparent CIA contract agent, on their board.72

Italian journalist Michele Metta, who recovered a cache of CMC corporate documents, has shown that Permindex-CMC was plugged into the Italian state security apparatus, and also had a curious series of connections to Israel.73 One of CMC’s founders, Georges Mandel (also known as Giorgio Mantello), was affiliated with the Banque pour le Commerce Suisse-Amerique Centrale, which was identified as having “supplied cover employment for [Israeli Intelligence Service] agents.”74 Another CMC board member, Alberto Forte, subsequently became managing director of Banque Belgo-Centrade – a subsidiary of the Mossad-linked Swiss-Israel Trade Bank.75

Louis Mortimer Bloomfield has often been described as the founder of Permindex, and sometimes as its dominant shareholder. This seems to be an inaccurate picture of his role in the complex, as Bloomfield was Permindex’s attorney. In this capacity, he was responsible for coordinating all the different players involved, who were scattered across multiple continents. He does not appear to have owned stock of his own in Permindex or CMC. Instead, he acted as a proxy for particular interests, effectively hiding their identities. Their stock was held in his name, and he occupied their spots on the board.

With the links between Permindex-CMC and the world of intelligence, it is unsurprising that rumors have circulated for decades that Bloomfield was, during the Second World War, a member of the OSS. There is little to corroborate this claim, though he did serve in the Royal Canadian Army Service Corps, achieving the rank of major in August 1946. Correspondences in his archive show that he was in communication with the British spymaster William Stephenson, who at the time was active in Canadian industry and finance. Bloomfield did hold membership in a number of elite organizations, including the Most Venerable Order of the Hospital of St. John of Jerusalem – a British chivalric order established by royal charter in the 1880s as something of a Protestant counterpart to the Catholic Sovereign Military Order of Malta (better known as the Knights of Malta). He eventually became both the attorney for and president of the Order’s Quebec Council.

Bloomfield was also attached to a number of Zionist organizations. He served as honorary counsel to the World Jewish Congress, and was active in building up the Canadian branches of the Histadrut, Israel’s trade union complex.76 In addition to organized labor, Bloomfield’s concerns involved maritime commerce as well. He was president of the Canadian wing of the Israel Maritime League, set up in the late 1940s to “make the people of Israel ‘sea-conscious.”77 The Israel Maritime League and the Histadrut were tightly connected: along with the Jewish Agency, the three organized Zim Shipping, the major transport concern that was a key supplier of weapons and supplies to Israel in the early days of the state’s existence.78

Later in life, Bloomfield corresponded with George H.W. Bush, including while Bush was serving as director of the CIA.79 The letters indicate that the two first met at a meeting at the Canadian embassy in Beijing in 1975. Bloomfield appears to have had a long-running fascination with China, having traveled there as early as 1966 (if not earlier). After that particular trip, he gave public addresses calling for the normalization of diplomatic relations with the country and for increased trade relations between the East and the West. As Maurice Phillips – the first to explore the contents of Bloomfield’s archives – points out, Bloomfield’s position on China predated that of President Richard Nixon and Henry Kissinger by a number of years.80

Another prominent figure in touch with Bloomfield was Tibor Rosenbaum. Permindex documents show that Rosenbaum and his International Credit Bank were deeply involved with Permindex and CMC. A July 12th, 1961, memo from Bloomfield to Rosenbaum discusses an adjacent project, headed by CMC’s founder Georges Mantello, called Marina Reale.81 Registered in Panama, Marina Reale was a holding company utilized by Permindex’s principals to acquire real estate. Just as with Permindex itself, Bloomfield acted as a proxy for shareholders whose names remain unknown. The communication between him and Rosenbaum, however, identifies some of the other parties with interests tied up in Marina Reale. Among these were Dov Biegun, a leading figure in the World Zionist Organization who became the national secretary for the National Committee for Labor Israel. Much like Bruce Rappaport and Robert Maxwell, Biegun spent World War II in the British Army. According to his obituary, he “served in intelligence operations in France, Holland and Norway.”82

Another investor in Marina Reale – and one who received his shares directly from Mantello – was “Nate Dolin of Cleveland, Ohio.” Dolin achieved notoriety in 1970 when a firm he was connected to, Realty Equities, ran a fraud scheme in conjunction with Rosenbaum’s ICB.83 Interestingly, Dolin had a business relationship with the Lansky-connected mobster Moe Dalitz going back to the 1940s, when they both owned shares of the Cleveland Indians sports team.84

There were other big names involved in Permindex-CMC’s real estate deals. Communiqués found in Louis Bloomfield’s archival papers show that his law partner Stanley Vineberg was keeping a close eye on these developments, and perhaps even had a role in these transactions that superseded that of Bloomfield.85 These same cables identified a French company called Compagnie Financiere as holding a 10% stake in one of the real estate ventures. Compagnie Financiere had been set up in 1953 by Francois Pereire, a scion of the famed French banking family, and Edmond de Rothschild, who exerted dominant control over the institution. Today, Compagnie Financiere is known as the Edmond de Rothschild Group.

Rothschild was also a business partner of Tibor Rosenbaum: the two had organized the Israel Corporation, “Israel’s largest investment company,” designed to “encourage large-scale private investment in Israel.”86 When it was discovered in 1974 that Rosenbaum had bilked the company to the tune of $60 million dollars, the Israeli government linked up a small handful of the country’s leading banks “to participate in efforts to prevent its liquidation.”87 One of these banks was Bank Leumi.

Rothschild himself appears all over Bloomfield’s correspondences, and was clearly intimately involved with Permindex-CMC’s activities. One cable from Bloomfield to Abraham Friedman at the Israel Continental Oil Corporation in Tel-Aviv requested that Friedman discuss matters relevant to the Italian real estate deals with Rothschild. Intriguingly, the Oil and Petroleum Year Book identifies Israel Continental Oil as having been set up in Canada in 1952, while Canadian government records show that Louis Bloomfield’s nephew, Bernard Bloomfield – mentioned earlier as a director of International Credit Bank’s subsidiary, Atlas Bank – was the oil producer’s president.88

According to the Jewish Telegraph Agency, a year after Israel Continental Oil was founded, it became a player in a consortium of oil firms looking to drill “near the Dead Sea and in other sections of Israel.”89 Other partners in this consortium included Husky Oil Company, which was affiliated with the aforementioned moblinked Rimrock Tidelands oil company, and New Continental Oil Company, with which Israel Continental Oil set up joint ventures in Canada. The president of New Continental was Frank Kaftel, an organized crime associate and stock manipulator originally from Cleveland, the stomping grounds of Moe Dalitz and CMC investor Nate Dolin.90 Federal Bureau of Narcotics documents identified Kaftel as a close associate of “Bayonne Joe” Zicarelli – the aforementioned mobster and businessman who had been involved in the running of arms to Israel.91

Another Canadian-based oil concern active in the Israel petroleum industry of the early 1960s was Tri-Continental Pipelines, where Edmond de Rothschild, Francois Pereire, and Louis Bloomfield could all be found.92 Galina Nikitina, in her political and economic history of the state of Israel, notes that Tri Continental was part of a group that controlled a pipeline from Eilat to Haifa – the basis for the larger “Trans-Israel Pipeline” that linked Israel and Iran – alongside the Miami Group and the Palestine Economic Corporation (PEC).93 The Miami Group, as mentioned above, maintained ties to organized crime interests and was also connected to the family of companies that was partnered with the Israel Continental Oil Corporation. PEC, on the other hand, was a primary conduit for the investment of American capital into nascent Israeli industries. To quote Nikitina:

[…]described as the largest American private investor in Israel, [PEC] was formed in 1926 as an instrument through which American Jews could render material assistance to production enterprises in Palestine. In only the period from 1950 to 1959 its capital increased 70 percent. PEC assets totalled 19,300,000 dollars in 1961. It has numerous daughter companies, banks and agencies, and shares in other companies. Having grown to gigantic proportions, PEC has its tentacles in all the key branches of Israel’s economy.

PEC is linked with leading financial and industrial monopolies in the USA, such as the Wall Street bankers Lehman Brothers, Kuhn, Loeb and Company (one of the eight largest financial groups in the USA), the Mellon group of Pittsburgh, the Cabot Lodge group of Boston, and the Hanna group of Cleveland.94

This particular network of individuals and institutions is complex and convoluted; yet, what is clear is that there was something of an Israel-Italy-France-Canada axis that was tied directly into hot money networks in the Caribbean, to the flow of capital from the west into Israel itself, and to the outflows of raw materials (like diamonds) from the “third world.” Once this foreign investment – generally from American and Canadian sources – was in Israel, it went to work building up various industries. It appears, then, that the logical successor to the earlier efforts to raise money, supplies, and weapons for the Zionist paramilitary groups in Mandatory Palestine was now all about building up the capacities of the new state.

As for the more narrow case of Permindex-CMC itself, it is clear how this “world trade center” would have been beneficial for engendering international capital flows and business arrangements of this very nature. At the same time, however, the links between these entities and intelligence services, like the CIA, the Italian special services and Mossad, also suggests a more covert imperative.

Michele Metta, in his book on Permindex, notes that, in the early 1960s, special arrangements were made between Israel and Italy to support the OAS – the French paramilitary group – in Algeria, in return for Italian oil companies getting access to Algerian crude.95 While the geopolitical implications of this arrangement are wide-ranging, it was also intimately connected to CMC. Leading these secret negotiations was former Italian prime minister Fernando Tambroni, whose son-in-law, Micucci Cecchi, sat on the board of CMC.96 On the side of the OAS, the negotiations were reportedly handled by the paramilitary leader Jacques Soustelle.97

This particular angle emerged during the investigation into the mysterious death of Enrico Mattei, whose plane exploded in October 1962. Mattei was the head of ENI, the dominant oil and gas firm in Italy that supplied, among other things, petroleum to NATO and the US Sixth Fleet. In the early 1960s, however, Mattei had embarked on something of a path different from the status quo of Cold War politics. He sought to sign oil agreements with the Soviet Union, and with Algerian and Egyptian interests who were, at the time, opposed to Israel.

With such a pivot taking place, theories that Mattei’s death was less than accidental have existed for decades and have also led to multiple official inquiries into the incident. Italian journalist Fulvio Bellini turned over information allegedly identifying the real culprits to one of these inquiries headed by the judicial magistrate Vincenzo Calia. “I think to understand the death of Enrico Mattei,” Bellini told Calia, “you need to follow the trail to Jacques Soustelle. This was the man given the job of doing Operation Mattei with around one hundred thousand dollars from Montreal, through Permindex.”98

And what, then, of the connections to organized crime networks? One possibility is that, through its connection with Tibor Rosenbaum’s International Credit Bank, Permindex-CMC was involved with money laundering activities. In one of the earliest exposes of Permindex-CMC, published by investigative journalist Mario Ugazzi in the now-defunct Paese Sera, a company called the Italo-American Hotel Corporation (IAHC) was identified as an affiliate of CMC (Metta, meanwhile, describes IAHC as a subsidiary of CMC).99 IAHC was dedicated to high-end real estate development in various locations in Rome. One of its big projects was the Hotel du Lac, curiously located next to ENI’s headquarters.100

Financing for IAHC’s projects came from Banca Nazionale del Lavoro (BNL) – a bank that, as will be discussed in Chapter 7, was tied to notorious banks like BCCI and Banco Ambrosiano and also played a role in the flow of weapons to Iraq in the 1980s. The money that BNL handled, however, came from a variety of other sources in Geneva and Lichtenstein. One of these sources was none other than ICB. While this is to be expected given Rosenbaum’s numerous ties to Permindex-CMC, it does raise questions about the ultimate provenance of this money. Given that ICB was moving the hot money being poured into its correspondent banks into the Caribbean, it is possible that, via these various companies, this money was being put into Italian real estate ventures.

Such conclusions are at best speculative. Yet, what is certain and undeniable is that much of the wartime OSS and CIA as well as Israel’s intelligence services operated in close proximity to, and were effectively indistinguishable from, organized crime. What’s unique in Israel’s case, however, is that such collusion was baked in at the very foundations of, not only its intelligence service, but the origins of the state itself.

_______________

Endnotes

Peter C. Newman, Bronfman Dynasty: The Rothschilds of the New World (Toronto: McClelland
and Stewart, 1978), 66-68.
2 Michael R. Marrus, Samuel Bronfman: The Life and Times of Seagram's Mr. Sam (Hanover:
Published by University Press of New England [for] Brandeis University Press, 1991),1 S.
3 Marrus, Samuel Bronfman, 22.
4 Nicholas Faith; if;e Bronfmans: The Rise and Fall of the House of Seagram, 1 st ed (New York: St.
Martin's Press, 2006), 217-18.
S Eli Yahri, "Seagram I The Canadian Encyclopedia;' February 13, 2012,
httRS:!/www.thecanadianency.c1oRedia.ca/en/articie/seagram-comRany'-limited.
6 Stephen Schneider, Iced: The Story of Organized Crime in Canada (Mississauga, Ont: Wiley,
2009), 199.
7 Richard Allen, "Social Gospel I The Canadian Encyclopedia," February 7, 2006,
httRS:Uwww.thecanadianency.c10Redia.ca/en/articie/social-gosRel; Leona Anderson, Bryan
Hillis, and Margaret Sanche, "The Encyclopedia of Saskatchewan I Details," n.d.,
httRs:llesask.uregina.ca/entry'/religion·j:!R·
8 Faith, The Bronfmans, 28.
9 John M. Bumsted, The Peoples of Canada, Fourth edition (Don Mills, Ontario: Oxford
University Press, 2014), 218-19.
10 Newman, Bronfman Dynasty, 74.
11 Daniel Okrent, Last Call: The Rise and Fall of Prohibition, First Scribner hardcover ed (New
York: Scribner, 2010), chap. 10.
12 Faith, The Bronfmans, 34-S.
13 Marrus, Samuel Bronfman, 68.
14 Schneider, Iced, 200.
1 S Faith, The Bronfmans, 34-S.
16 Okrent, Last Call, chap. 12.
17 Jesse Donaldson, "On BC Day, a Look at Five Wacky Stories from the Province's Past;' The
Tyee, August 5, 2019, httRs:llthetY.ee.ca/Culture/2019/08/0S/BC-Day'-Provincial-Past-Wacky..:
Stories/.
18 Okrent, Last Call, chap. 11.
19 Davin de Kergommeaux, "Whisky Heroes: Sam Bronfman, Seagram I Scotch Whisky;' March
21, 2019, httRs:UScotchwhisky'.com/magazine/whisky'-heroes/24781/sam-bronfmanseagram/.
20 James W. Muller, "Two Churchills and the Hudson's Bay Company," APSA 2009 Toronto
Meeting Paper (Rochester, NY: Social Science Research Network, September 3, 2009),
httRmRaRers.ssrn.com/abstract= 1451764.
21 Okrent, Last Call, cha p. 12.
22 Thomas Maier, "Prohibition and Profit: The Secret Kennedy-Churchill-Roosevelt Deals," TIME,
October 21, 2014, hllRs:Utime.com/3S29756/kennedy'-churchill-roosevelt-investment-deal/.
23 Faith, The Bronfmans, 132. Note on Robertson's death. Source: Faith. Page 1327
24 Schneider, Iced, 203.
25 Faith, The Bronfmans, 64.
26 Okrent, Last Call, chap. 12.
27 Investigation of Organized Crime in Interstate Commerce, Hearings before the Special
Committee to Investigate Organized Crime in Interstate Commerce (1950,1951), p. 544,
http-s:/Iarchive.org/details/investigationofo07unitlp-age/544/mode/2up-.
28 Schneider, Iced, 199.
29 Faith, The Bronfmans, 65.
30 Martin Mayer, "The Volatile Business," Esquire, August 1959,
http-s:!/classic.esg ui re.com/a rti cle/1 959/811/the-volati Ie-bus i ness.
31 Faith, The Bronfmans, 65.
32 Leonard Sloane, "Lewis Rosenstiel, Founder Of Schenley Empire, Dies," New York Times,
January 22, 1976, http-s:! Iwww.nytimes.com/1976/01/22/archives/lewis-rosenstiel-founderof-
schenley-emp-ire-dies.html.
33 Sloane, Lewis Rosenstiel Dies.
34 Sloane, Lewis Rosenstiel Dies.
35 Nicholas Gage, "Ex-Head of Schenley Industries Is ~inked to Crime 'Consortium,'" New York
Times, February 19, 1971, http-s:llwww.nytimes.com/1971/02/19/archives/exhead-ofschenley-
industries-is-linked-to-crime-consortium.htmI.
36 Anthony Summers, Official and Confidential: The Secret Life of J. Edgar Hoover (New York:
Pocket Star Books, 1994),285, http-s:llarchive.org/details/officialconfideOOOsumm.
37 Summers, Official and Confidential, 287.
38 Faith, The Bronfmans, 98-99.
39 Mayer, The Volatile Business.
40 Faith, The Bronfmans, 64.
41 Mayer, The Volatile Business.
42 Summers, Official and Confidential, 297.
43 MA Jones, "Potential Criminal Informant (PCI) Sue Young, Hollywood, Calif., Call Girl"
(Archives.gov, July 26, 1960), http-s:llwww.archives.gov/files/research/jfk/releases/docid-
32304320.p-df.
44 Summers, Official and Confidential, 291.
45 Summers, Official and Confidential, 292.
46 Summers, Official and Confidential, 292.
47 Lucian K. Truscott IV, "I Was Groped by a Man Called 'Mary': The World Changes but Not the
Catholic Church;' Salon, February 9,2019, httP-s:!lwww.salon.com/2019/02/09/i-wasgrop-
ed-by-a-man-called-mary-the-world-changes-but-not-the-catholic-churchl.
48 Summers, Official and Confidential, 293.
49 Summers, Official and Confidential, 293.
50 Summers, Official and Confidential, 294.
51 Summers, Official and Confidential, 515.
52 Summers, Official and Confidential, 515.
53 Summers, Official and Confidential 516.
54 Michael Newton, The Mafia at Apalachin, 1957 (Jefferson, N.C: McFarland, 2012), 117.
55 Summers, Official and Confidential, 297.
56 Burton Hersh, Bobby and J. Edgar: The Historic Face-off between the Kennedys and J. Edgar
Hoover That Transformed America (New York: Basic Books, 2008), 88.
57 John W. DeCamp, The Franklin Cover-up: Child Abuse, Satanism, and Murder in Nebraska
(Lincoln, Neb: AWT, 1992), 179.
58 Terry Melanson, "The Ghost of Roy Cohn - Conspiracy Archive;' August 24, 2014,
httRS:llwww.consRiracy.archive.com/2014/08/24/the-ghost-of-roy'-cohnl.
59 Jerome A. Kroth, Conspiracy in Camelot: The Complete History of the Assassination of John
Fitzgerald Kennedy (New York: Algora Pub, 2003), 233, httRS:llbooks.google.cl/books?
id=VStz 10QcBOC.
60 "New Book Pictures J. Edgar Hoover as Drag Queen;' UPI, February 6, 1993,
httRs:llwww.uRi.com/Archives/1993/02/06/New-book-Rictures-J-Edgar-Hoover-as-drag:
.Queen/l0647289748001.
61 Many of the key pieces of evidence for Hoover's relationship with Tolson, as well as Hoover's
closeted homosexuality, can be found in this article published by the UK's The Guardian:
Anthony Summers, "The Secret Life of J Edgar Hoover;' The Guardian, December 31, 2011,
httRS:llwww.theguardian.com/film/2012/jan/01 Ij-edgar-hoover-secret-fbi.
62 "J. Edgar Hoover Was Homosexual, Blackmailed by Mob, Book Says;' Los Angeles Times,
February 6, 1993, httRS:I Iwww.latimes.com/archives/la-xRm-1993-02-06-mn-1 078-
story'.html.
63 Summers, Official and Confidential, 280.
64 Jerome A. Kroth, Conspiracy in Camelot: The Complete History of the Assassination of John
Fitzgerald Kennedy (New York: Algora Pub, 2003), 233.
65 Summers, Official and Confidential, 276.
66 Mark Riebling, Wedge: From Pearl Harbor to 9/7 7: How the Secret War Between the FBI and CIA
Has Endangered National Security, 1 st Touchstone ed. (New York: Simon & Schuster, 2002,
n.d.),131.
67 Hersh, Bobby and J. Edgar, 88.
68 William McGowan, "The Chickens and the Bulls;' Slate, July 11,2012,
httRS:/ 1 slate .com/h u ma n-i nterest/20 12/0 7 Ithe-ch ickens-a nd-th e-bu II s-the-rise-a n dincredible-
fall-of-a-vicious-extortion-ring-that-Rrey'ed-on-Rrominent-ggy'-men-in-the-
1960s.html.
69 McGowan, "The Chickens and the Bulls."
70 Hersh, Bobby and J. Edgar, 88.
71 Ronald Smothers, "Seize l1-Year Fugitive in Homosexual Blackmail Case;' New York Times,
January 14, 1978, httRS:llwww.nyjimes.com/1978/01 114/archives/seize-11 y'ear-fugitive-inhomo-
sexual-blackmail-case.html.
72 Summers, Official and Confidential, 517.
73 Summers, OOfficial and Confidential,S 17.
74 Summers, Official and Confidential, 516.
75 Summers, Official and Confidential, 516.
76 Nicholas Von Hoffman, Citizen Cohn, 1 st ed (New York: Doubleday, 1988), 123-24.
77 Von Hoffman, Citizen Cohn, 123-125.
78 Maxine Cheshire, "The Director;' Washington Post, 1969,
httRi!jfk.hood.edu/Collection/Weisberg%20Subject%201ndex%20Files/H%20Disk/Hoover
%20J%20Edgar%20Foundation/ltem%2005·Rdf.
79 Hersh, Bobby and J. Edgar, 133-134.
80 Summers, Official and Confidential, 516.
81 Cheshire, "The Director:'
82 Summers, Official and Confidential, 289.
83 Cheshire, "The Director:'
84 Sloane, Lewis Rosenstiel Dies.
85 "CORPORATIONS: The Rapid Riser - TIME;' June 6, 1960,
httRs:llweb.archive.org/web/20111 007012745/httR:llwww.time.com/time/magazine/artici
e/O,9171,874162-1,OO.html.

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Part 1 of 3

CHAPTER 4. ROY COHN’S “FAVOR BANK”

“THE CITY’S PREEMINENT MANIPULATOR”

Roy Cohn, whose public reputation ranged from “boy wonder” to sleazy mob lawyer over the course of his lifetime, was one of the most influential political operators in the country for the better part of three decades. Not only would he serve as Joseph McCarthy’s right-hand man during the height of the Red Scare, he would also help secure electoral victories for prominent politicians in New York and beyond, including for US presidents. Years after his death, Cohn’s protégé, New York real estate billionaire Donald Trump, would serve as the 45th president of the United States.

Yet, for someone who was so influential, both his admirers and detractors have declined to dig too deeply into his career and dealings, particularly those that are most unsavory. Part of this may owe to Cohn’s apparently contradictory nature – he was an anti-communist crusader that closely collaborated with the FBI as well as a close confidant, business associate, and legal counsel to some of the biggest names in organized crime. Perhaps for that reason, Cohn’s story is central when detailing the rise of the networks that are the focus of this book.

Roy Cohn was a man once called New York City’s “preeminent manipulator,” precisely because he was “a one-man network of contacts that have reached into City Hall, the mob, the press, the Archdiocese, the disco-jet set, the courts and the backrooms of the Bronx and Brooklyn where judges are made and political contributions are arranged.”1 In addition, Cohn’s ability to manipulate the press, politics and much more may have been partially due to his ability to wield blackmail in a way similar that practiced by his close associate and friend, J. Edgar Hoover. This particular relationship, aspects of which were discussed in Chapter 2, may explain why, long after Cohn’s death in 1986, much of the FBI file on Cohn – believed to be over 4,000 pages long in total – has still not been made publicly available despite efforts by Cohn biographers and others over the years.2

Cohn’s background and the earlier parts of his career serve as a useful window into how the world of “above-board” and “legitimate” business and politics has intermingled with the criminal underworld throughout the decades and how blackmail was critical to Cohn’s ability to successfully navigate those murky, grey areas between the legal and the illegal.

AL COHN AND THE NEW YORK MACHINE

Roy Cohn’s father, Albert Cohn, was the son of immigrants from Poland, whose limited financial means forced Albert to skip high school. He eventually attended City College, working his way through university, and graduated in 1903. Afterwards, he attended New York Law School, teaching high school classes simultaneously, and became a practicing lawyer in 1908.3 In 1910, Albert Cohn became heavily involved in the Democratic Party clubhouses based in the Bronx, which involved “attending the once-a-week meetings, working the precincts and winning the district leader’s favor,” according to Roy Cohn biographer Nicholas von Hoffman.4 Albert’s connections to the Bronx Democrats grew strong enough that he was appointed assistant district attorney for the Bronx by 1917.5 At this point, Albert or “Al” Cohn sought to become a judge but lacked the money that was necessary to secure such a position. This was because the party required payments from the men it put on the ballot as a form of fundraising, and the more influential the position, the more money was required. Cohn lacked such wealth but continued to ascend through the ranks of New York’s legal scene, becoming chief district attorney in 1923 under Bronx County District Attorney Edward Glennon.

Around the time that Al Cohn had gone as far as he could without having the money required for the judgeship he coveted, he met Dora Marcus, the daughter of a wealthy banking family. According to friends of Al Cohn and members of the Marcus family, the relationship between Cohn and Dora Marcus quickly led to an arranged marriage, as Dora “was the ugly duckling daughter they couldn’t marry off.”6 According to interviews given by members of the Marcus family, which aired in Matt Tyrnauer’s 2019 documentary Where’s My Roy Cohn?, Dora’s father Joseph S. Marcus essentially offered Albert Cohn the money and influence necessary to become a judge in exchange for his marrying Dora.7 They married in January 1924, and, a year later, Albert Cohn was appointed Bronx County judge by New York governor Al Smith.8 After their marriage, Al and Dora argued about where to live, with Al initially winning, securing their place in the Bronx. Al’s desire to stay in the Bronx was motivated by his desire to stay connected to the political connections he had developed, where he handled the party’s “Jewish patronage” on behalf of Bronx party boss Ed Flynn.9 Al Cohn is regarded as a protégé of Flynn’s who came to wield “substantial power in the Democratic Party,” according to author Robert Shogan.10

In 1921, Cohn created the Pontiac Democratic Club at Flynn’s behest in order to weaken the political base of a Flynn rival, Patrick Kane.11 The club later became hugely influential in local elections. Years later, Roy Cohn would describe his father as Flynn’s “chief lieutenant” during this period while his mother Dora would host annual dinner parties at their home in Flynn’s honor. As a judge, Al Cohn was incredibly loyal to Flynn and the Democratic Party. According to historian Christopher Elias, “When the party needed Al to rule a certain way for reasons political or personal, he followed through. When they needed his support for a specific candidate, he gave it. When the son of a friend and fellow Democratic operative killed a young woman in an automobile accident, Al made a late-night visit to the police station and ‘straightened it out.’”12

Al’s service to the party and to Flynn paid off, with New York governor Franklin Delano Roosevelt appointing Cohn to the Bronx Supreme Court in 1929, making him Roosevelt’s first judicial appointment.13 At the time and for years afterward, Flynn was one of Roosevelt’s most senior strategists. Eight years later, Albert Cohn was appointed to the State Supreme Court’s Appellate Division.14 Like many of the networks already explored in this book, the political machine in which Al Cohn was intimately nestled was interwoven with the city’s criminal underworld.

Some modern-day mainstream sources trace the origin of organized crime’s influence on New York’s Democratic Party to 1931 when Lucky Luciano sent two hired guns to intimidate Harry Perry, the co-leader of Manhattan’s 2nd Assembly District, demanding he step down in favor of Albert Marinelli.15 However, the same crime syndicate had cozy ties with labor unions, a key component of the Democratic Party’s power base, going back to the 1920s – an arrangement for which mobster Arnold Rothstein is credited.16

Similarly, Marinelli’s ties to the mob also dated back to the 1920s, when he owned a trucking company that Lucky Luciano managed during the Prohibition era. Luciano had been responsible for helping Marinelli become the first Italian- American district leader at Tammany Hall well before the incident with Perry, which speaks to organized crime’s earlier influence over New York politics through Tammany. Yet, after Perry stepped aside and ceded his position to Marinelli, the National Crime Syndicate’s influence on New York City politics, particularly the Democratic Party, became “brazen,” according to decades-old reports in New York magazine, as the move gave Marinelli – and by proxy, Luciano – control over who was chosen to serve on grand juries as well as the counting of votes in local elections.17

The influence of the National Crime Syndicate on top New York politicians was considerable at the time when Albert Cohn was deeply involved in Democratic affairs. For instance, Meyer Lansky is known to have donated to the political campaigns of Al Smith, the governor of New York for much of the 1920s.18 Smith was a top figure with Tammany Hall, the political powerhouse of New York Democratic politics that controlled Democratic Party nominations and became synonymous with corruption. Smith is regarded as one of the main protégés of Tammany boss Charles M. Murphy, who had worked to improve the organization’s reputation until his death in 1924. However, Murphy’s success in cleaning up Tammany’s public image did not extend long past his death, largely because many of the top names at the organization had remained closely enmeshed with the city’s criminal underworld despite his efforts.

During the now-infamous effort of the National Crime Syndicate to rig the Democratic National Convention in 1932 in favor Franklin Delano Roosevelt, it was a tearful Al Smith, who had personally warned Luciano, Lansky, and Costello that Roosevelt would betray them.19 Smith specifically warned that Roosevelt would break his promise to restrain an official inquiry into criminal activity in New York City, a promise Roosevelt had made to appease organized criminal interests in order to secure his nomination. This anecdote was relayed separately by both Lansky and Luciano.20 Smith’s warning, which the crime bosses had ignored, turned out to be true, as Roosevelt allowed the inquiry, led by Judge Samuel Seabury, to advance after his nomination was cemented. The inquiry soon exposed extensive criminal activity being conducted by Tammany politicians, leading several top officials to resign. Jimmy Walker, the Tammany-backed mayor of New York City and Al Smith’s own protégé, not only resigned as mayor but fled to Paris to avoid charges.21

Regarding the 1932 convention, Luciano later stated that it was commonly known at the time that his criminal enterprise controlled most of New York City’s delegates to the convention, which speaks to their considerable influence over the party’s dealings in the city during that period.22 Seabury and Roosevelt’s combined determination to clean up the Democratic Party’s image in New York, however, saw Tammany’s influence wane due to its entrenched association with organized crime becoming public knowledge. The National Crime Syndicate’s influence on New York politics nevertheless remained strong well past Tammany’s fall from grace.

The elder Cohn remained deeply involved in the Democratic political apparatus during this period and, as mentioned, was specifically close to Edward Flynn, who had tightly controlled the Democratic Party in the Bronx since 1922. Flynn, who was another protégé of Tammany Hall boss Charles Murphy but not a Tammany member himself, became favored by Roosevelt in the wake of the Seabury inquiry, supposedly because Flynn had kept his district free of corruption.23 An argument can be made, however, that Flynn had merely kept his district and his own reputation free from a public association with corruption, as Flynn later moved to protect the mob-linked politician William O’Dwyer. According to Robert Shogan, O’Dwyer was one of the Cohn family’s “famous family friends.”24

The rise of William O’Dwyer, not unlike that of Thomas Dewey, was based on his reputation as a crusader against organized crime, including Meyer Lansky’s Murder Inc., and specifically his role in the takedown of syndicate boss Louis “Lepke” Buchalter. It has been disputed, however, as to whether the reality of the Buchalter case was the same as what was publicly reported (i.e., ex-cop O’Dwyer bravely taking on the mob) or, rather, the masking of the consolidation of mob power into fewer hands.

As noted by Sally Denton and Roger Morris in The Money and the Power, it was Lansky himself who had arranged for Buchalter to be arrested by the FBI and the Federal Bureau of Narcotics in 1937. Of this alliance, Denton and Morris write that the “betrayal [of Buchalter] at once removed a Lansky rival, gratified Hoover and FBN director Harry Anslinger in their mutual obsession with popular image, and further compromised federal law enforcement, which was growing ever more dependent on informers and double agents for its successes.”25 Both Dewey and O’Dwyer prosecuted Buchalter with great zeal, gaining considerable recognition for themselves in the process.26 The man they took down, however, had already been consigned to death by both his “friends” and the government before Dewey and O’Dwyer were even involved, which casts doubt on the narrative that Buchalter’s prison sentences and eventual death sentence were merely the result of Dewey’s and O’Dwyer’s prosecutorial abilities.

Further doubt regarding the official story of this incident is raised when one considers that both star prosecutors had their own ties to the same syndicate, with Dewey’s ties to Mary Carter Paint/Resorts International having already been noted in Chapter 1. In the case of O’Dwyer, he was meeting with Frank Costello the same year that he secured Buchalter’s death sentence.27 O’Dwyer ran for mayor of New York in 1941 and lost, but he was later elected in 1945, largely on his anticorruption public image. However, an investigation launched by an attorney O’Dwyer had once hired and who was successfully elected to O’Dwyer’s old position as Brooklyn District Attorney, Miles McDonald, brought that image – and O’Dwyer’s career – crashing down. In 1950, McDonald began investigating Harry Gross, who had been running a multi-million-dollar gambling empire in the city. The investigation into Gross grew rapidly with McDonald discovering a series of other related rackets throughout the city. Most of those rackets led back to one man, James Moran – the man who had served as O’Dwyer’s right-hand man when O’Dwyer served as a judge, as a district attorney, and now as the city’s mayor.

Once word got out that McDonald was onto Moran, heat started to be applied from the very top, with O’Dwyer denouncing the man he had once hired and calling his investigation a “witch hunt.”28 Soon afterward, Ed Flynn called President Harry Truman and urgently requested a meeting. No formal record of the meeting exists, but it is believed that the topic was the implications that McDonald’s investigation would have, not just for New York City but for the Democratic Party and Truman himself. Two days later, Truman met with the head of New York’s Democratic Party and a close associate of Flynn’s, Paul Fitzpatrick. He then met with Eleanor Roosevelt, whose influence on the New York Democratic Party was still considerable. According to journalist David Samuels:

What McDonald’s investigation would reveal, Flynn and Fitzpatrick knew, was that Mayor O’Dwyer was the frontman for a system of citywide corruption that was administered by Moran, the mayor’s closest political associate. Worse, they knew – as the public would find out the following August, from the public testimony of a gangster named Irving Sherman – that O’Dwyer and Moran had been meeting personally with the syndicate boss Frank Costello as far back as 1941. And as a former chairman of the Democratic National Committee, Flynn also knew that the urban political operations that had helped elect Franklin Roosevelt to the presidency four times, and Truman once, were based on a system of unsavory alliances. Putting O’Dwyer on the stand would put the Democratic Party in New York – and elsewhere – on trial. One way to keep O’Dwyer safe from McDonald’s grand jury was to get him out of the country.29

This is precisely what happened, as Truman appointed O’Dwyer to be ambassador to Mexico, which allowed O’Dwyer to avoid charges and further scrutiny. Ed Flynn’s close ally and accomplice in helping orchestrate this deal to protect O’Dwyer, Paul Fitzpatrick, thanked Truman in a letter: “Your recent announcement of the pending appointment of the Ambassador to Mexico, again proves to me your deep understanding of many problems and your kindness in rendering assistance.… May I just say thanks.”30

Though O’Dwyer had escaped from McDonald’s investigation, he was forced to return to the US from Mexico City to testify before the Kefauver Committee on his alleged dealings with organized crime in March 1951. During his testimony, he did not deny having visited Frank Costello’s home in 1941. He also admitted that he had appointed the friends and relatives of powerful mobsters to public offices and became evasive when asked how much he had known about their ties to organized crime at the time. A subsequent report issued by the committee stated that “during Mr. O’Dwyer’s term of office as district attorney of Kings County between 1940 and 1942, and his occupancy of the mayoralty from 1946 to 1950, neither he nor his appointees took any effective action against the top echelons of the gambling, narcotics, water-front, murder, or book-making rackets,” while his time as mayor had “contributed to the growth of organized crime, racketeering, and gangsterism in New York City.”31

Less than a year later, O’Dwyer’s right-hand man, James Moran, was convicted on twenty-three counts of extortion for his role in the corruption McDonald had exposed. If Flynn was indeed a Bronx political boss who was free of scandal and corruption as some historians claim, it is hard to justify why he would intervene so dramatically – directly involving the White House – in order to protect the corruption that had enabled O’Dwyer. Rather, he stepped in to protect the system of “unsavory alliances” that had given his party its power, including its obvious organized crime ties. There is also the fact that a young Roy Cohn had been considerably involved with and worked in O’Dwyer’s election campaign, bragging that he had been the one who had found dirt on O’Dwyer’s Republican challenger.32 The mob connections and the use of “dirt” and blackmail in politics is something that would later define much of Roy Cohn’s career and, ultimately, his legacy.

UNCLE BERNIE’S BANK

Though Roy Cohn was undeniably born into privilege given his father’s influence and connections, it can easily be argued that much of Albert Cohn’s own success and clout had been due to marrying into the Marcus family. Roy Cohn’s mother, Dora Marcus, hailed from an elite family in New York’s Jewish community that was later mired in controversy and scandal in connection with their Wall Street activities during the Great Depression.

Dorothy “Dora” Marcus was the daughter of Joseph S. Marcus, who had created the Bank of the United States. Marcus, a Russian-Jewish immigrant, started his career in the garment industry before entering the world of banking, first creating the Public Bank of New York in 1906. He disposed of his interest in that bank in 1912 and chartered the Bank of the United States a year later. One of Marcus’ reasons for doing so was apparently related to problems at the Public Bank that had resulted from Marcus’ hiring of William Koelsch as cashier. Koelsch’s presence at the bank caused “friction” among the bank’s directors, according to the New York Times.33

Marcus, Koelsch, and a business partner of Marcus’ named Saul Singer came together to create the Bank of the United States soon afterward, but they had different men officially file the bank’s incorporation. This was allegedly done in order to hide their involvement to avoid alerting Public Bank’s leadership that Marcus and Koelsch were the real forces behind their new competitor. Marcus’ new bank was the subject of immediate controversy, as his new for-profit enterprise was to be located just a stone’s throw from Public Bank, leading Public Bank’s leadership to complain that “there was no public necessity for such additional banking facilities in that particular block” of the street.34

In addition, Public Bank leadership objected to the name of Marcus’ new bank, arguing that the name “Bank of the United States” sounded too much like some historical government-linked institutions, such as that which had served as a prototype for a central bank during the days of President Andrew Jackson. This, they argued, could give the false impression of a direct US government connection to Marcus’ bank, particularly to the uninformed. This point was made explicit in a letter written on behalf of Public Bank by Samuel I. Frankenstein and sent to the Senate Banking Committee.

Frankenstein, according to a report on the letter published by the New York Times, argued that “ignorant foreigners … would believe that the United States Government was interested in this bank and that it was a branch of the United States Treasury in Washington, and if the bank should fail these poor depositors would bewail the fact that they had entrusted their scant savings to the United States government.”35 He added, “It must be evident to any impartial mind that the motive and purpose in selecting this very peculiar and misleading name for a bank to be located in a neighborhood almost exclusively inhabited by foreigners, especially when so many other appropriate names could have been so easily adopted, was not a laudable one. This name was not selected through pure accident.”36 TIME would prove Frankenstein very prescient.

Despite these concerns, the Bank of the United States was granted its charter by George C. Van Tuyl Jr., NY State Superintendent of Banks, who subsequently became become a vice president and later a director of the bank. The Bank of the United States, as Frankenstein had expected, immediately worked to attract business and deposits from the local Jewish immigrant community. Starting with a modest $100,000 in working capital, it experienced moderate growth and had a total of five branches by 1925. Given its Jewish ownership and efforts to cater directly to Jews, it became a point of pride for the New York Jewish community, which “eagerly embraced the new bank, opening savings accounts and borrowing money for fledgling businesses,” according to historian Beth S. Wenger.37

Legal proceedings were, however, filed against the bank in 1926, requiring an independent examination of the bank’s books. The case was dismissed by NY State Supreme Court judge Joseph S. Proskauer, allegedly because the plaintiffs had failed to “make out a case.”38 Yet, there are reasons to doubts Proskauer’s objectivity in the case, as he was connected to the same political machine as Albert Cohn. For instance, Proskauer had been appointed by New York governor Al Smith, whose ties to organized crime have already been discussed. Proskauer had also served as Smith’s key political advisor during campaigns bankrolled by Lansky, which took place while Proskauer served on the NY State Supreme Court and subsequently the Appellate Court. Proskauer was appointed chair of the New York State Crime Commission in the early 1950s, despite his past conflicts of interest.39

That commission had been created at the behest of Governor Thomas Dewey, who, as mentioned in Chapter 1, had released Lucky Luciano from prison after his involvement in Operation Underworld and who was also closely tied to both John Foster Dulles and Allen Dulles. Allen Dulles was serving as CIA director at the time of the commission’s activities and as the Agency’s ties to organized crime deepened. Soon after the Crime Commission’s work was completed, Dewey’s former chief assistant, Paul Lockwood, in 1955 became a top executive at Lewis Rosenstiel’s moblinked Schenley Industries, while Dewey himself officially became a business associate of Lansky frontmen in 1958.40 Lansky had also previously donated to Dewey’s unsuccessful bid for the US presidency in 1944.41 The Proskauer-led Crime Commission was insignificant in terms of its end results, especially in comparison to the impact the Kefauver Committee had had the year before, when Dewey had been called to testify due to his suspected mob ties.42 This suggests that Proskauer, like Albert Cohn, Ed Flynn and others, could be counted on to protect certain influential actors within the system of “unsavory alliances” that was woven throughout the city.

In addition to Proskauer’s own apparent conflicts of interest, there is the added fact that Joseph Marcus had promised Albert Cohn a judgeship in exchange for his marrying his daughter Dora, which further reveals the influence of the Marcus family within legal and judicial circles, as well as with the politicians who appointed judges in New York during this period. Albert Cohn had been appointed as judge for Bronx County by Al Smith a year before this case was brought against Marcus’ bank, in 1925.43

Joseph Marcus died in 1927, giving his son Bernard K. Marcus – Roy Cohn’s “Uncle Bernie” – complete control over the bank’s affairs.44 Bernard Marcus had already been intimately involved with the bank’s leadership since 1919, when his father had turned over active management of the bank to him. After his father’s death, Bernard was named president of the bank and went on an aggressive acquisitions-and-mergers spree, resulting in the bank growing from five branches in 1925 to sixty two in 1930.45 Two major mergers took place in 1928 followed by two more in 1929, resulting in the Bank of the United States becoming the third-largest bank in New York City by May 1929.46 The bank became a member of the Federal Reserve of New York, which was greatly influenced by the Warburg brothers, Felix and Paul. Paul Warburg was the main architect of the privately owned Federal Reserve banking system and a powerful force at the central bank during its early years.47

Due to the Bank of the United States’ apparent success, Bernard was hailed at the time as “a financial wizard who could make dividends sprout from virtually nothing.”48 Yet, it was soon revealed that Bernard Marcus’ wizardry was largely the result of fraud and corruption by the Marcuses and Saul Singer, validating the earlier rationale for having the bank investigated, which had been dismissed by Proskauer. In February 1930, just months after the Black Tuesday stock market crash of October 1929, Bernard Marcus assured shareholders that the bank stood on solid ground.49 A few months later, the bank began negotiations for its largest merger yet, which would have resulted in their bank managing $1 billion in deposits. The would-be bank was to have been headed by J. Herbert Case, then head of the Federal Reserve Bank of New York, of which the Marcus-run bank was a member.50 In addition, Goldman Sachs was poised to have “a substantial interest” in the new bank, further underscoring that the merger was set to create another Wall Street behemoth.51 Terms of the merger were reportedly negotiated in November 1929.52

Yet, by December, rumors were proliferating that the Marcus-run bank was insolvent. Nervous investors and depositors, most of whom were Jewish, lined up to withdraw their money on December 10, 1930. By midday, over $2 million had been withdrawn, and tens of thousands of the bank’s estimated four hundred thousand clients had gathered outside the doors of the bank’s Bronx branch, leading to the police being called to maintain order. The panic quickly spread to other branches, but – by that time – all of the other branches had closed their doors. A massive sell-off of the bank’s stock ensued, plunging it to $3 a share, whereas it had stood at $91 the previous year. Bernard Marcus insisted that the bank would reopen following the planned merger. The merger, however, fell through, as clearinghouse banks involved in the deal pulled out after examining the books of the Marcus-run bank.

Superintendent of Banks Joseph Broderick attempted to work with Wall Street’s leading bankers to rescue the bank on December 11, 1930, but failed to reach any solution. The governor of New York at the time, Franklin D. Roosevelt, ordered the Bank of the United States closed, which made its failure the largest in US history at the time. An investigation was launched, and the evidence of fraud quickly piled up.

As the investigation began, it became readily apparent that Bernard Marcus and Saul Singer, the bank’s vice president, had engaged in illegal activity, including purchasing the bank’s stock with depositor funds in order to drive up the stock price.53 Not only that, but they loaned out over $37 million under suspicious circumstances, including $10 million in mostly unsecured loans to bank directors and their companies, as well as $5.5 million in loans to sixteen insolvent subsidiaries of the bank in the months leading up to its collapse.54 Marcus and Singer also raided the bank’s reserve to finance their own investments in the real estate market.

Public hearings revealed that two months before the bank shut down, officers at the bank had burned a truckload of documents, more than a thousand bundles of papers of bank records, at an incinerator located at the Beresford Apartments, which was owned by a subsidiary of the Bank of the United States.55 Marcus, in a style that would later be exemplified by his nephew Roy Cohn, fought the investigation of his bank bitterly, even going so far as to refuse to testify and to seek the removal of the lead investigator of the case.56 Both Marcus and Singer were found guilty of fraud and were sentenced to three years in Sing Sing maximum-security prison, and their appeal was unsuccessful.

According to members of the Marcus family, including Roy’s mother Dora, the reason the other banking chieftains of New York had declined to step in to rescue the Bank of the United States had been “anti-Semitism,” and editorials appeared in some New York newspapers arguing the same.57 Per this theory, the Episcopalian J. P. Morgan, the Anglo-Saxon-dominated New York Clearing House, and the German-Jewish bankers – e.g. the Kuhns, Loebs, and Lehmans – had let the Russian-Jewish bankers fail when they could have saved their bank. Dora Marcus referred to these figures as “a dirty anti-Semitic cabal” that sought to destroy her family due to their Russian-Jewish origins.58

Other banks, however, have been allowed to fail throughout US history, and “anti-Semitism” was not blamed for those occurrences. In addition, the German- Jewish banking establishment was in part dominated by another powerful family – the Warburgs – with both Felix and Paul Warburg having married into another German-Jewish banking family, the Loebs. In June 1930, just months before the collapse of the Marcus-owned bank, Albert Cohn – Bernard Marcus’ brother-inlaw – was the guest of honor at a luncheon hosted by Felix Warburg, suggesting that this alleged hatred held by the German-Jewish banking establishment for the Russian-Jewish Marcus family did not exist at the time.59

It is perhaps more likely that either the fraud of the Bank of the United States was too enormous or that the German-Jewish banking establishment was disgruntled that such a massive fraud had been perpetrated by a Jewish-owned bank against mostly Jewish depositors. After all, the bank sought to target the Jewish immigrant community through deceptive means from its inception and subsequently committed fraud to rob mostly Jewish immigrants of their money. For example, the bank deliberately advertised its services to the Jewish community in Jewish newspapers and magazines less than a year before its failure at a time when its executives had been engaged in fraudulent activity.60 In addition, there had been efforts to investigate the bank for fraud earlier, but they had been dismissed with the intervention of Judge Proskauer. That intervention also raises the possibility that powerful interests had been willing to intervene on behalf of the Marcus-owned bank once but would not do so a second time.

Furthermore, Bernard Marcus was pardoned after just twenty-seven months in prison by Herbert Lehman when he was serving as New York governor.61 Lehman had been one of the judges presiding over Marcus’ appeal and was the only one who had argued for the conviction to be overturned.62 Lehman, who hailed from the German-Jewish Lehman Brothers banking family, was close to Albert Cohn, who had allegedly lobbied Lehman to grant the pardon.63 If the Lehmans and the rest of the German-Jewish banking establishment had indeed sought to destroy Marcus, it is highly unlikely that Herbert Lehman would have intervened to try to prevent his initial conviction and then intervened again by pardoning Marcus.

The trial and imprisonment of Bernard Marcus had a considerable impact on Roy Cohn, as “Bernie” was his favorite uncle. Roy, like other members of the Marcus family, took the view that the “anti-Semitic cabal” had used Bernard Marcus as a “scapegoat,” leading some of his cousins on the Marcus side to claim that it was this view that led Cohn to “fight the establishment.”64 Given other accounts and insights into Roy Cohn’s up-bringing, it seems more likely that he just resented the law and felt that it should not apply to him, a sentiment apparently shared by Bernard Marcus, as revealed by his conduct during the investigation and trial related to his role as the president of the Bank of the United States.

On Roy Cohn’s maternal side, it was not only his grandfather and uncle who were influential figures in New York (despite their very public fall from grace in the 1930s). His maternal grandmother, Celia Cohen Marcus, was the sister of Joshua Lionel Cowen (born Cohen), who cofounded Lionel Corporation, a producer of model railroads and toy trains. The origins of the prominent toy company lie in Cowen’s work for Acme Electric Light company, where he began registering patents for lamps and motors in 1899.65 That same year, Cowen was awarded a $12,000 contract from the US Navy to design and manufacture fuses to ignite submarine mines.66 Cowen used the money to finance the creation of Lionel Corporation in 1900. Though Cowen is best known as the long-time and founding president of Lionel Corporation, he was also a director of the Bank of United States at the time of its demise.67

While his nephew was sent to Sing Sing, Cowen managed to get off light through the help of Fred Piderit, the special deputy banking superintendent charged with overseeing the liquidation of the Bank of the United States.68 Piderit’s son later became a prominent fixture at the New York Federal Reserve.69 Cowen ultimately settled for $5,000 (about $107,000 in 2022 dollars), despite having personally attended bank directors’ meetings during which many of the fraudulent loans had been approved. He testified that he knew nothing of the bank’s criminal activities and learned about its many problems from media reports after its closure. Cowen’s avoidance of charges in the case further weakens the theory that the prosecution of Bernard Marcus over the bank’s collapse was a plot against the Marcus family perpetrated by other Jewish banking families.

Lionel’s influence grew and peaked in the early 1950s when it became the world’s largest toy manufacturer.70 Its glory days faded relatively quickly, and by the end of decade, Cowen and his son Lawrence stepped away from the company, selling their shares to none other than Roy Cohn. Cohn’s involvement with and role at the company would subsequently be linked to suspect financial activity and organized crime networks. Friends of Cohn’s, including former congressman Neil Gallagher, have alleged that Roy persuaded friends and acquaintances to buy Lionel stock while he privately shorted the firm, resulting in Cohn getting rich while those who had invested at his behest took a financial beating.71 Cohn also “side-stepped” federal regulations in the late 1950s by borrowing large sums from US and foreign sources to buy Lionel stock.72 At the time, Cohn had already become enmeshed in business interests tied to mob figures such as Moe Dalitz and Tony Salerno.

Regarding other notable claims about Roy Cohn’s family tree, it has been alleged by some, including his biographer Nicholas von Hoffman, that his maternal grandmother, Celia Cohen Marcus, was “deranged,” suffering from serious mental issues. One of his uncles on his mother’s side, Jesse Marcus, was “either mentally retarded or brain-damaged,” which the family speculated was due to the misuse of forceps by the doctor who delivered him, while others suspected a congenital condition. Von Hoffman also reported that some members of the Cohn family thought that Roy Cohn’s mother needed to be institutionalized, while others thought something similar but believed that being well-to-do made her eccentricities manageable.73

Other members of the Marcus family, including Roy Cohn’s cousins, have not made such extreme claims but have said that Dora’s neurotic and sociopathic tendencies left an undeniable mark on her son. According to one of his cousins, it all started the day Roy Cohn was born in 1927, with Dora telling Al, “This is my baby. I’m going to bring this child up and you’re going to have nothing to say about it.”74 Though dominated by his mother and having much less contact with his father, Cohn was aware from a young age of their unhappy marriage and was able to play his parents against each other with ease. Bernard Marcus’ wife, Libby Marcus, once stated to biographer von Hoffman that Cohn’s parents “saw quite differently in ways of discipline and so forth, so Roy was never said no to. He could always find one person on his side, and that’s the one he would use.” Cohn’s Aunt Libby, added, “I don’t think there was any [discipline] between Roy and his mother. It was always in a direction of power, influence, recognition, and there was no chance of Roy ever being stymied because he always, always got his way.… It was not a normal relationship.”75

This permissiveness was, perhaps, the most lasting impact Cohn’s mother had on his character. It was also expressed by one of his law partners, who was anonymously cited by von Hoffman as saying, “His doting mother created a person who was totally free of the rules that you and I or most people go by. What will people think, what’s the right thing, what does my religion say about this – Roy played by his own set of rules. Whatever he wanted at any given moment was the right thing.”76

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Part 2 of 3

ROY RISING

From a young age, Roy Cohn was known for being adept at “the trade of human calculus, of deal making, swapping, maneuver, and manipulation.”77 By the time he was twelve, for example, he was using his father’s political connections to secure men jobs at the post office, collecting a finder’s fee. Those who knew him all agree that he felt more comfortable in the presence of powerful businessmen and New York political power-brokers than with children his own age. Despite being so different from other children, Roy Cohn developed a few close childhood friends, some of whom would dramatically impact his career trajectory as well as his later ability to manipulate the media for political gain and for the gain of his clients.

These childhood pals of Cohn’s included Si Newhouse Jr., who went on to oversee the Conde Nast empire that now includes Vanity Fair, Vogue, GQ, the New Yorker, and many other publications; Edwin Weisel Jr., who became assistant attorney general under President Lyndon Johnson and whose father was a prominent lawyer in the movie business; and Generoso (Gene) Pope Jr., who eventually ran the National Enquirer. Cohn’s Aunt Libby Marcus stated that Roy “had very few contemporary friends, because even as a little boy, if he had a party there would be two youngsters, Generoso Pope [ Jr.] and Eddie Weisel, Jr. – those were his two friends. Every time he had a party, he had these two contemporaries and everybody else was somebody in politics or somebody with power. Older. He didn’t bother too much [with] people his own age.”78

Gene, like Roy, had an insatiable interest in politics and, more specifically, the politics of power. He was the favorite son of Generoso Pope Sr., an immigrant who had famously come to the US from Italy essentially penniless and who had risen to the top of New York City’s – and then the nation’s – concrete industry. Pope Sr. was a controversial man at the time due to his admiration and support for Italian fascism and his ties to Benito Mussolini as well as the Vatican and New York’s top mobsters.79 Pope Sr. was also close to William O’Dwyer, the mob-linked mayor of New York who was also a friend to the Cohn family. Pope Sr. also had the ear of prominent US politicians, including Democratic presidents Franklin D. Roosevelt and Harry Truman as well as Truman’s Republican challenger and governor of New York, Thomas Dewey.

Regarding the family’s mob ties, Pope Sr. was particularly close to Frank Costello, who he had known since his earliest days in New York and who had shaped the trajectory of his business, Colonial Sand and Stone, by securing the most lucrative city contracts for concrete for Pope’s company.80 The seemingly endless series of sweetheart deals led Colonial to become the largest concrete company in the country and allowed Pope Sr., its head, to become one of the wealthiest, “legitimate” businessmen with intimate organized crime ties.

So close was the tie that Costello – who was the real-life inspiration for Vito Corleone, the main character of the famous Mario Puzo novel The Godfather – was chosen to be Gene Pope Jr.’s actual godfather and served as his guide for years. Gene, after a brief stint working in psychological operations for the CIA, got a loan from Costello to construct his own media empire around the National Enquirer. Gene Pope Jr.’s son, Paul Pope, described Costello’s influence on his family as “like a guardian angel, his power felt but unseen.”81

The mafioso-style “deals” that brought the Pope family to prominence also became their modus operandi. Through his control of the city’s concrete industry and the local Italian immigrant voting bloc through his essential monopoly on Italian-language newspapers in New York, Pope was a force that major politicians, and any ambitious politician, could not afford to ignore. He operated through an elaborate system of quid pro quo that was later adopted by Roy Cohn, who called his own version of this system his “favor bank.”82 As Gene Pope Jr. later said of both his and his father’s roles in New York – and even national – politics: “We made deals. That’s how judges got made, DAs, things like that. That’s when you did all your talking. I mean I did everything from fixing parking tickets to making judges.”83

Cohn, later on in life, reminisced about his closeness to the Pope family, stating that “virtually every Saturday night, we would go out to dinner or have dinner at 1040 Fifth and then Mr. and Mrs. Pope, Gene and I would go see a new Broadway show.”84 According to Gene Pope Jr. and Cohn, Gene Pope Sr. served as a “mentor” to Cohn, whom he admired for his “magnetic personality.” Cohn later said that he “learned an awful lot about practical politics” from Pope Sr., including the politics of the “favor bank,” and that the mob-linked businessman “had more to do with my incipient political career than any other single person.”85

Pope Sr. certainly aided Cohn’s rise in the world of lawfare, having pulled strings to secure the appointment of Irving Saypol as US Attorney for the Southern District of New York (SDNY), where Cohn subsequently served as assistant attorney. According to Cohn, as cited by his biographer Nicholas von Hoffman, Saypol’s appointment as US Attorney was “thanks to the influence of an odoriferous triumvirate” of Pope Sr., Carmine de Sapio of Tammany Hall, and Frank Costello.86 Saypol’s focus on prosecuting Communists led to Cohn’s now infamous role in the trial of Julius and Ethel Rosenberg and, shortly thereafter, the McCarthy hearings.

It was Roy Cohn’s oddly cozy relationship with J. Edgar Hoover, described in Chapter 2, that was the deciding factor in Cohn’s appointment as Joe McCarthy’s chief counsel during the controversial anti-Communist hearings. The position had nearly gone to Robert F. Kennedy, who was a lifelong rival and bitter enemy of Cohn’s – with Kennedy attempting to nail Cohn on more than one occasion when he was Attorney General during his brother’s presidency. Though Cohn was ruthless and seemingly untouchable as McCarthy’s counsel, having played a pivotal role in destroying many careers and lives during the parallel “Red” and “Lavender” scares, his antics in relation to his work on the committee eventually led to his downfall after he attempted to blackmail the Army in return for preferential treatment for committee consultant and his rumored lover, David Schine. Notably, shortly before Schine became involved with Cohn and McCarthy, his sister, Renee Schine, married Lester Crown, the future Mega Group member and son of the “Supermob”-linked Henry Crown discussed in Chapter 1.87

While Cohn’s failed power play with the Army was his most well-known attempt to use blackmail during this period, he was also known to have used blackmail of various sorts to target diplomats, such as Charles Thayer, the US consul general in Munich, Germany, after Thayer’s brother-in-law, Charles Bohlen, was nominated for an ambassadorship by Eisenhower. Both Thayer, but especially Bohlen, were hated by the “McCarthyite right” despite there being no solid evidence of communist affiliations in either case.88 Cohn had learned that, during a stint in Mexico, Thayer had produced a son with a Mexican woman whom he had briefly married and then divorced. Cohn threatened to inform Thayer’s aged mother of this long-past affair by shoehorning it into the public confirmation hearings of Charles Bohlen, who had been nominated to serve as US ambassador to the Soviet Union. Thayer, fearing that the news would greatly distress his elderly mother, chose to resign from the State Department.89

Cohn also likely used blackmail obtained by other means, given that he had already become involved with the Rosenstiel-linked sexual-blackmail operation during this period. As discussed in chapter 2, this operation was allegedly tied to the anti-Communist “hunt” of the period, and its apparent target, homosexual men, were also being “hunted” due to so-called lavender scare. Ironically, one of the main motives behind the lavender scare was the concern that closeted homosexuals were vulnerable to blackmail. Though the idea was that Communists would use this information to subvert homosexuals in the US government, the evidence suggests that it was this specific anti-Communist group with which Cohn was directly affiliated, who were more adept at blackmailing these men. This group was also subversive, given that their top men, homosexuals such as Hoover and Cohn, where entangled with and compromised by organized crime. After all, it had been Hoover’s FBI and the Catholic Church, dominated by Cohn’s pal Cardinal Spellman, that had originally backed and legitimized McCarthy and his now infamous witch hunt.90

Like Hoover, Cardinal Spellman, the archbishop of New York from 1939 until his death in 1967, was incredibly powerful. As Gene Pope Jr., Roy Cohn’s lifelong friend, later recalled: “You couldn’t get a job in New York without Spellman’s okay. … Before anybody had a Chinaman’s chance, it had to be cleared by Spellman.… He controlled everything with an iron fist, he controlled the legislature, he controlled the city council. He controlled everything.”91 Spellman was very much a control freak, having been known to interpret “any sign of opposition to his will as a sign of Communist subversion.”92 Also like Hoover, Spellman’s power was likely the main reason why he was able to keep the facts about his homosexual life under wraps. Spellman’s double life not only allegedly involved the “blue suite” parties at the Plaza hotel, but also included private sex parties at his mansion. Even Spellman biographer John Cooney had to acknowledge Spellman’s private life, writing, “In New York’s clerical circles … Spellman’s sex life was a source of profound embarrassment.… There were stories about his seducing altar boys and choir boys. He had his favorites among handsome young priests and was known to have lovers outside the clergy.”93

One interesting anecdote shared by Cooney relates to a choir boy who had a relationship with Spellman and who was particularly vocal about it. A man named C. A. Tripp, who later became a sex researcher for the controversial Alfred C. Kinsey, stumbled on this relationship by accident after he met the choir boy, who was bragging about his trysts with Spellman. Tripp was stunned that the powerful Cardinal was not more discreet about his dealings. Tripp asked the boy to ask Spellman why he was not worried that news would get out and harm his reputation. The boy returned several days later and responded: “The archbishop says, ‘Who would ever believe that?’”94

It seems that Spellman was confident that his powerful position would shield him from any real scrutiny, allowing him to carry on his sex life as he saw fit. As Rod Dreher of the American Conservative wrote in a 2019 article that detailed various anecdotes about Spellman’s double life: “Cardinal Spellman was confident that he would never be outed, and that if someone tried, no one would believe it. And they wouldn’t have, until today.”95 As previously noted, Spellman was alleged to have been seen at the “blue suite” parties at the Plaza hotel.

While Spellman and Hoover apparently had similar, and potentially connected, private lives that carried the risk of exposure, it seems that only the latter was blackmailed. Such blackmail was not only wielded by organized crime interests to protect their rackets from FBI meddling, but also by American intelligence agencies. According to David Talbot in The Devil’s Chessboard, McCarthy’s efforts to target CIA analyst and CIA director Allen Dulles’ ally William McBundy in mid-1953 led Dulles to put the squeeze on Hoover, who (despite having expressed doubts about McCarthy’s campaign at this time) continued to feed the Wisconsin senator and Roy Cohn “a stream of damaging information on his [Hoover’s] Washington enemies.”96

Dulles, himself the subject of a thick dossier kept in Hoover’s office that documented his adulterous trysts, made sure the CIA maintained the blackmail on Hoover, including that which had been shared between OSS veterans, most likely James Jesus Angleton, and Meyer Lansky years earlier. As Talbot notes, “The CIA counterintelligence chief [ J. J. Angleton] was rumored to occasionally show off photographic evidence of Hoover’s intimate relationship with FBI deputy Clyde Tolson, including a photo of Hoover orally pleasuring his longtime aide and companion,” while one of Allen Dulles’ mistresses was known to refer to Hoover as “the Virgin Mary in pants.”97

Dulles had also compiled a lengthy dossier on Joe McCarthy’s sex life, which included allegations of homosexuality. Talbot details those allegations:

The senator who relentlessly hunted down homosexuals in government [i.e., McCarthy] was widely rumored to haunt the ‘bird circuit’ near Grand Central Station as well as gay hideaways in Milwaukee. Drew Pearson got wind of the stories but was never able to get enough proof to run with them. But the less discriminating Hank Greenspun, editor and publisher of the Las Vegas Sun, who was locked in an ugly war of words with McCarthy, let the allegations fly. Greenspun had been given access to the Pearson files, and he had picked up his own McCarthy stories involving young hotel bellboys and elevator operators during the senator’s gambling trips to Vegas. “Joe McCarthy is a bachelor of 43 years,” wrote Greenspun. “He seldom dates girls and if he does, he laughingly describes it as window dressing.… It is common talk among homosexuals who rendezvous at the White Horse Inn [in Milwaukee] that Senator Joe McCarthy has often engaged in homosexual activities.”98

In the world of Beltway blackmail, these allegations of McCarthy’s homosexuality were dismissed by those in Hoover’s inner circle, as Hoover had also compiled his own set of secret files on McCarthy’s sex life, should he ever need it. Instead, Hoover’s secret files were alleged to contain a series of disturbing stories of McCarthy drunkenly groping young girls, which was allegedly so frequent that they had become “common knowledge” around the capital.99 Talbot quotes Walter Trohan, Washington bureau chief of the Chicago Tribune, who witnessed McCarthy molest one such girl, as saying, “He just couldn’t keep his hands off young girls. Why the Communist opposition didn’t plant a minor on him and raise the cry of statutory rape, I don’t know.”100

Yet, as previously discussed, it appears that the anti-Communist forces that surrounded McCarthy, as opposed to the “Communist opposition,” was the side that most readily engaged in such operations, and it is entirely possible that McCarthy could have been targeted and entrapped by some of his ostensible allies, given that he wielded considerable power and his indiscretions were said to have been widely known in those circles.

For Dulles’ part, he didn’t need to “plant a minor” on McCarthy, as the compendium of stories of his actions alone was enough to give the CIA director leverage over the senator. As a result, Talbot states, “there was an explosive sexual subtext to the CIA’s power struggle with McCarthy, one that was largely hidden from the public but would eventually erupt in the Senate hearings that brought him down.”101 Though it is debatable as to whether McCarthy’s struggle with Dulles provoked his undoing, their scuffle did mark his first major failure and was a turning point in his anti-Communist campaign. It would be the relationship between Roy Cohn and David Schine, the chief consultant to McCarthy’s committee who has been described by one Cold War historian as Roy Cohn’s “dumb blonde,” that became the deciding factor behind both McCarthy’s and Cohn’s fall from grace.102 Though some Cohn biographers have cast doubt on the claims of a romantic relationship between Cohn and Schine, other historians of the period treat it as fact. There is really no way of knowing one way or the other, aside from a series of anecdotes that have been the subject of speculation for, at this point, several decades.

For instance, during Cohn’s and Schine’s infamous European tour, the German press reported on the two men’s “flirtatious antics in a hotel lobby” while also describing how the pair had left “their hotel room in a shambles after a vigorous round of horseplay.”103 Von Hoffman, who dismisses a homosexual relationship between Cohn and Schine in his book Citizen Cohn, nevertheless notes some eyebrow-raising stories. One such story that had been reported in TIME revolved around how Schine and Cohn “would fly down to Washington from New York on Monday, take adjoining rooms at the Statler Hotel for the week, then fly back on Friday night for a weekend of nightclubbing.” On one occasion, the Statler did not have adjoining rooms for the two men, instead only having two single rooms that were not connected. It was Schine, as opposed to Cohn, who then provoked “quite a hassle in the lobby” as he “roared his disapproval.”104

At the very least, even if there was no sexual relationship, the evidence points to Cohn having been enamored with Schine to the point that he was willing to aim the full force of the McCarthy machine squarely at the Army after Schine, who had been drafted in 1953, was due to be shipped overseas. Cohn’s reported response to the news was, “We’ll wreck the Army.… The Army will be ruined … if you pull a dirty, lousy, stinking, filthy, shitty double cross like that.”105 The targeting of the Army did lead to ruin, just not the Army’s.

Eventually, and with the full approval of the Eisenhower administration, the Army responded by compiling “the Schine report,” which revealed all of the ways that Cohn and McCarthy had sought to blackmail the Army to secure special privileges and favors on Schine’s behalf. This led to the now-infamous Army- McCarthy hearings in 1954, which ultimately ended McCarthy’s reign and humiliated Cohn to such an extent that it would overshadow him for the rest of his career, long after he left Washington. The intensity of the controversy would also provoke the dissolution of the close relationship between Cohn and Schine. What is undeniable about the whole affair is that it reveals how blackmail, particularly sexual blackmail, had become a major, even if largely invisible, force in American politics.

COHN UNDER FIRE

After the end of McCarthyism, Roy Cohn returned to New York and, thanks to Judge David Peck, joined the Saxe, Bacon & O’Shea law firm in 1957. Peck, a close friend of Roy’s father, was also very closely associated with Thomas Dewey and, prior to and after his judgeship, was a lawyer for Sullivan & Cromwell, the Wall Street firm long run by the Dulles brothers.106 The firm, later renamed Saxe, Bacon & Bolan, came to be dominated by Cohn, for better or for worse. One lawyer who worked there in the early days alongside Cohn has accused him of being the driving force behind the deterioration of its reputation, which declined rapidly in the 1960s.107 Yet, despite the firm’s decline in professional reputation, Roy was making quite a bit of money during this same period, as well as a name for himself.

What could have been good times for Roy Cohn were marred by his ongoing feud with the Kennedys, namely Robert F. Kennedy. “I knew when Bobby Kennedy was lurking nearby, nothing good could happen to me,” Cohn was known to have said.108 He was particularly concerned after learning of John F. Kennedy’s plans to run for president, as it would likely mean his “mortal enemy” would be appointed to a powerful position in a future administration. Cohn had done all he could to keep the Kennedys from power by vigorously supporting Lyndon Johnson in the Democratic primary.109 This involved him lobbying Carmine de Sapio of New York’s Tammany Hall to back Johnson.

Yet, the Kennedys were not so easily thwarted, and once Robert Kennedy became Attorney General, the feud became even more acrimonious and particularly dangerous for Cohn. Cohn sought refuge in his powerful connections, which now included even more overt ties to major figures in organized crime. Indeed, the same year that John Kennedy won the presidential election, in 1960, Cohn was the guest of honor at a New Year’s Eve party hosted by Moe Dalitz, the Ohio-based gangster who was a close associate of Meyer Lansky and a key figure in the Jewish mob. This same year, Cohn had also begun engaging in illegal financial schemes involving Lionel, his uncle’s company.110 Cohn’s control over Lionel had been arranged with the help of Los Angeles accountant Eli Boyer, who – along with Cohn – had invested in a project alongside Dalitz and his associates.111

Cohn initially attempted to smooth things over with Kennedy, writing a letter claiming he “harbored no ill will” toward him, a gesture that was ignored.112 Former congressman Cornelius “Neil” Gallagher, who had met and befriended Roy while representing him in a legal case, later remembered that “Roy was very set back at the fact that Bobby was now named as Attorney General. He was, to put it mildly, very disturbed.…Roy felt, and rightfully so, that they were coming after him. And in fact there was a Get-Roy-Cohn team put together and a Get- Jimmy-Hoffa team put together.”113

The creation of the “Get-Roy-Cohn” team by the Robert Kennedy-led Justice Department was attested to by Robert Arum, then Assistant US Attorney in New York, while many others have noted the obvious personal hatred that helped fuel Kennedy’s efforts to get Cohn. The combined hatred for Cohn shared by Robert Kennedy and Robert Morgenthau, then the US Attorney in New York, resulted in Cohn being taken to court three times over the next few years. He managed to avoid being found guilty in all three cases, thanks to pure luck in at least one instance.

The first case came in 1964, when a grand jury indictment charged Cohn with obstruction of justice for having tried to prevent the indictment of four men in a stock-swindle scheme involving a company called United Dye, as well as perjury for having lied that he had done so. The case focused considerable attention on Cohn’s dealings with Moe Dalitz and his associates, particularly those involved in the Desert Inn (discussed in more detail later in this chapter).

During the trial, the allegation was made that Cohn had called Dalitz in June 1962, demanding that the mobster return immediately from a vacation in Europe in order to assist Cohn in intimidating men tied to the United Dye swindle so they would lie under oath to the grand jury investigating the scheme. It also emerged during the case that Cohn, Dalitz, Eli Boyer, and stock swindler Sam Garfield (a close friend of Dalitz’s and a central figure in the United Dye scandal) had all been original investors, and thus business associates, in the Sunrise hospital, as had Desert Inn manager Allard Roen, another figure in the United Dye case. Roen was previously discussed in connection with Burton Kanter and the “supermob” in chapter 1. Media reports on the case also noted that Cohn, as previously mentioned, had been the guest of honor at Dalitz’s New Year’s Eve party in 1960.114

Other aspects of the United Dye case, which were ignored or merely glanced over during the trial, are critical for establishing Cohn’s ties not just to organized crime during this period but also to organized criminal activity that was intimately enmeshed with a series of CIA assets and other figures of interest in the context of this book. The United Dye web and its organized crime-intelligence links are explored later in this chapter. For now, the focus will be on Cohn and how he fared against the Kennedy-led Justice Department.

Cohn’s defense in the case was based on his assertion that the “two Bobbies” – Kennedy and Morgenthau – were after him because of personal vendettas.115 In the case of Kennedy, it was because Cohn had beat him out to be counsel to Joe McCarthy; for Morgenthau, it was because Cohn had helped target his father, the former treasury secretary, during the McCarthy hearings.116 Though Cohn had the formidable media empires of the Newhouse family and the Hearst Corporation at his back, his ties to Hoover and Cardinal Spellman also proved useful in this particular legal battle. Spellman’s ties to Cohn, writes von Hoffman, were so well known throughout New York that it “enabl[ed] him to put the connection to use in his lawyerly tricks” and served as “Roy’s insurance that there would be some political constraints on what Bobby [Kennedy] might do” in his quest to send Cohn to prison, in large part because of the Kennedys’ own Catholic connections.117 Hoover was of more immediate assistance to Cohn at this time, with a lawyer who worked alongside Cohn at Saxe, Bacon & O’Shea claiming that Hoover “gave Roy the government’s case, not directly but from FBI agents and witnesses.”118

Yet, despite all this help, things were not going Cohn’s way in the trial, with a single juror holding out for conviction. It later emerged that Cohn and his legal team had done everything they could to have this juror, an African American woman, replaced prior to deliberation, as they assumed that she would surely vote to convict. Unfortunately for this woman juror, her father was killed in a car accident during deliberation, and she was excused from the jury. The judge reluctantly ruled a mistrial as a result of her dismissal.119

When the case was retried, it resulted in acquittal. One of the main reasons for this shift was that Cohn’s defense lawyer – Frank Raichle – had caught Sam Garfield, a key government witness, in a lie related to his denial that the government had offered him leniency for his role in the United Dye stock swindle if he testified against Cohn. The optics helped Cohn’s “vendetta” defense.120 The second trial Cohn faced, the Fifth Avenue Coach Lines case, saw him charged with “bribery, conspiracy, extortion and blackmail for allegedly bribing a city appraiser to help his client, Fifth Avenue Coach, snare a higher award in a pending condemnation trial.”121 This trial had a very different trajectory than the United Dye case, particularly when Cohn’s defense attorney Joseph Brill had a heart attack in the middle of the case. Brill’s heart attack was suspected by some as having been a ploy so that Cohn could serve as his own defense lawyer as the trial drew to a close. While it is debatable if such suspicions were warranted, Cohn becoming his own defense attorney allowed him to offer his own testimony without being cross-examined. It also allowed him to offer “an eloquent seven-hour summation, ending with a protestation of [Cohn’s] love for America.”122 That performance saw tears stream down the cheeks of both Cohn and the jurors, who then acquitted Cohn.

The third trial was also related to the Fifth Avenue Coach Lines case and saw Cohn accused of bribery, conspiracy, and filing false reports to the Securities and Exchange Commission. The government’s case against Cohn in this instance involved deposits that Cohn had arranged with the money Fifth Avenue Coach received as a result of the condemnation award. One of those two deposits arranged by Cohn, which the government asserted “provoked considerable controversy,” was a deposit of five hundred thousand dollars in Geoffrey’s Bank in Belgium, which was made the same day that Fifth Coach received the award. One hundred thousand of those funds were then sent to Cohn and deposited in his personal bank account the next day.

Cohn testified that the money was a payment he was owed by A. Newman, “a friend of Cohn’s with whom he had certain business dealings” and who was an officer of Geoffrey’s Bank.123 The other “mysterious” deposit made by Cohn was “never fully explained,” according to the judge who oversaw the case, despite having been a key point of focus during the trial.124 Cohn was acquitted when the government’s strategy of offering former business associates of Cohn leniency for testifying against him backfired yet again. Nevertheless, the acquittal came with caveats, as the court did find that “Cohn benefitted from the use of Fifth’s money to pay the loans made to him by” other directors and that he engaged in a “cover up” of the involvement of two company directors in suspect financial schemes.125

The appearance of “A. Newman,” or Arno Newman, in this case is worth noting as Newman, who used the last name “Nejman” in Belgium, and his family bank, named for Arno’s son Geoffrey, were later tied to illegal arms deals with Israeli intelligence in the 1980s, during roughly the same period as the Iran- Contra affair (see Chapter 7). Some of these deals, gone awry, bankrupted Geoffrey’s Bank by 1981, but no legal consequences for the bankruptcy ever befell the Newman/Nejman family.

A key figure in the Mossad-linked smuggling of weapons through Belgium at this time was David Benelie, a Belgian-Israeli dual citizen and an official business partner of the Nejman family. It later emerged that Benelie’s real last name was Azulay and that he was the brother of Avner Azulay, who worked closely with Marc Rich, a Mossad-connected commodity speculator and later fugitive. Belgian investigative reporter Willy Van Damme has claimed that both Azulay brothers worked for Mossad.126

While these were the three cases brought against Cohn by the “two Bobbies,” they were not Cohn’s only trials during the period, as he was also indicted for violating banking laws on more than one occasion. However, the conduct of the two Bobbies, particularly that of Robert Morgenthau, in their quest to nail Cohn, ultimately resulted in a flip of the narrative in which Cohn – once seen as an attack dog in McCarthy’s witch hunt – now became viewed as a victim of a witch hunt himself. There is some truth to that view, as Cohn’s mail had been illegally intercepted during his 1964 trial, and stories that painted Cohn in a negative light were leaked to the press by the government in a clear bid to sway jurors.

Yet, one of the motivating factors behind Kennedy’s and Morgenthau’s efforts to “get” Cohn, that he was a crooked lawyer with organized crime ties who felt himself to be above the law, was also true. Nevertheless, despite their best efforts, none of the cases stuck, and their failure granted Cohn “an aura of invincibility, respectability, and even sympathy.”127 Though he had garnered some public sympathy, that does not mean that Cohn did not try to get even with his arch nemeses, particularly Bobby Kennedy.

VENDETTA BEGETS VENDETTA

One of the many things that Roy Cohn and J. Edgar Hoover shared was having Robert Kennedy as an enemy. Hoover not only subverted the Kennedy-led effort to “get” Roy Cohn by passing Cohn the government’s case against him on at least one occasion, he also looked for ways to bring Kennedy down. This was not motivated by Kennedy’s efforts to indict Cohn but instead by his efforts as Attorney General to rein in Hoover and bring down the organized crime networks that had first blackmailed Hoover and later formed an “unsavory alliance” with him.128 According to von Hoffman, regarding Hoover’s strategy:

Hurting Kennedy demanded some ingenuity, for the target was clean on money, far cleaner on sex than his brother, in short not an easy one to bring down. One approach might be to embarrass him with his liberal constituency, to depict him as a ruthless Attorney General indifferent to the Bill of Rights and individual liberty. To put the plan into effect, Roy was needed as a membrane of protection for the Director; others were needed, including Congressman Gallagher who was making a reputation for himself in the House as a civil libertarian, a legislator committed to preventing the government from turning itself, by aid of computers, lie detectors and advanced electronics, into a free-world version of Big Brother.129

According to Cornelius “Neil” Gallagher, Cohn called him up and asked him if he would meet with “a friend of ours” who wanted to talk “about some real substantive abuses that are going on in the United States” that could form the basis for a series of Congressional hearings. This “friend” was Sid Zagri, chief lobbyist for the Teamsters Union. At the time that Robert Kennedy instructed his Justice Department to target Cohn he had also had his sights set on the organized crime-linked head of the Teamsters Union, Jimmy Hoffa, meaning that the Teamsters had their own score to settle with the Attorney General.

The meeting with Zagri went forward. Zagri had brought with him a trove of documents that were “aimed at Bobby Kennedy and the strike force concept, the IRS, the uses that Kennedy was making of them,” according to Gallagher. Zagri said that he wanted Gallagher to host hearings on the material. When Gallagher asked how he had acquired these “dangerous” documents, Zagri said, “Don’t worry about it.”130 In Gallagher’s version of what happened, he gave a noncommittal response to Zagri about the possibility of hearings. Zagri responded, stating that he had been promised by Cohn that Gallagher would do the hearings. The meeting went downhill from there and ended when Gallagher angrily ejected Zagri from his office.

Cohn called Gallagher the next day, telling him, “You made a big mistake,” to which Gallagher responded that he had not wanted to commit because he was unsure of the documents’ authenticity. Cohn then revealed that the documents were authentic, as they had come from the FBI, adding, “They all come from Mr. Hoover and Mr. Deke DeLoach [one of the two top assistants to the director]. Mr. Hoover will consider it a very personal favor if you chair these hearings. He’s sick and tired of the bullshit of Bobby Kennedy.”131 Gallagher responded that he wanted to stay out of the brewing battle between Kennedy and Hoover, stating, “I don’t agree with what Bobby’s doing; I think it’s terrible. I don’t agree with what Hoover’s doing; it’s even worse.” Cohn promised that if Gallagher did host the hearings both Hoover and Teamster boss Jimmy Hoffa would shower him with favors and aid his reelection efforts. Gallagher was still unwilling to step into the ring. Cohn warned him, “You’re going to be sorry.… I know how they [the FBI] work.… If you’re not their friend, you’re their enemy.”132

Cohn would repeated the same thing to Gallagher a second time. This next occasion saw Gallagher receive a letter prepared for his signature that demanded that the attorney general at the time, Nick Katzenbach, appear before a Congressional committee with the authorizations for the (illegal) bugging of civil rights activist Martin Luther King Jr. Gallagher asked who had produced this letter for him to sign, since he had never dictated it to anyone. His secretary responded that it had been Roy Cohn. Cohn, when contacted by Gallagher, asserted that Hoover had dictated the letter because “he’s sick and tired of Bobby Kennedy proclaiming himself the great liberal when he himself signed the authorizations of his bugging.”133 Gallagher declined to do the director’s bidding once more, to which Cohn again replied, “You’re going to be sorry.… I told you before, if you’re not their friend, you’re their enemy. They’re gonna get you.”134

Hoover made good on his threat, and, in 1968, he leaked a story to LIFE magazine that tied Gallagher to mobster Joe Zicarelli in the middle of Gallagher’s reelection campaign. The story relied on transcripts of taped conversations allegedly between Gallagher and Zicarelli, whose organized criminal activities and role in arms smuggling was discussed in the previous chapter. The FBI later denied the authenticity of these recordings, though some have posited that the tapes might have been authentic, with the FBI only denying their validity to avoid admitting they had illegally wiretapped Gallagher. Given that Gallagher had long been friendly with Cohn, the Zicarelli tie is not outside the realm of possibility, as Zicarelli was an alleged business associate of Lewis Rosenstiel, who was close to Cohn as well as Hoover.

However, the story in LIFE is a bit odd for a few reasons. For instance, it failed to establish any benefit to Gallagher from his alleged dealings with the Mafia. It did claim that Gallagher had asked for the Mafia’s help in disposing of a dead body, yet Gallagher was not accused of killing him, and the person appeared to have died of natural causes as there were no indications of foul play. The article provided no explanation as to why Gallagher would not have just called a doctor or the police if the man had died of natural causes on his property. The article also asserted that Gallagher’s criticisms of the FBI’s and the Justice Department’s wiretaps were mainly motivated by his purported “alliance” with these Mafia figures. Considering that the FBI itself was later revealed to have been the source of the accusations detailed in the LIFE article, as well as Hoover’s own conflicts of interest relating to organized crime, the claims about Gallagher in this article are best taken with a grain of salt.135

After publication of the LIFE story, Gallagher claimed he was again threatened by Hoover, with Roy Cohn again serving as the conduit. Gallagher was told that he had to resign or an even more sensational story would be published, this one involving a man allegedly dying in his bed after fornicating with his wife and with Gallagher again asking for Mafia help in disposing of the body. Gallagher was told by both Roy Cohn and a mutual friend of theirs, Neil Walsh, that Hoover was going to have the story published in LIFE unless Gallagher resigned from Congress in the next ten days. According to Cohn, Hoover wanted Gallagher out of Congress because he was “too dangerous” for them, as he had not agreed to Hoover’s demands now on two occasions. Walsh summed up the situation by telling Gallagher, “You’re not their friend, so you’re finished.”136 Needless to say, Gallagher did not take kindly to the threats and delivered a speech on the House floor, exposing Hoover’s threats and claiming that the FBI had leaked false information to LIFE in a plot against him. Gallagher won reelection despite the FBI director’s efforts, but he was indicted in 1972 for perjury and tax evasion.137

Regarding Hoover’s attempt to blackmail him, Gallagher later stated:

“The Faustian contracts that were daily made by important parts of the United States media on these kinds of deals, without any recourse as to what the hell they were really building up, has become part and parcel of why we don’t have a goddamn presidential candidate around anymore.… You know it’s okay to talk about these things, but information is controlled and the bastards [i. e., men like Hoover] have the information, and they use guys like Roy as the interlocutors.”138

Von Hoffman notes that Gallagher’s statement here has “special meaning” given Cohn’s subsequent role in similar political power plays, such as those that doomed the vice presidential candidacies of Thomas Eagleton in 1972 and Geraldine Ferraro in 1984.139 The weaponization of the media, however, was but one of the methods employed by Cohn and allies such as Hoover in their elaborate “favor bank” system.

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Part 3 of 3

COHN AND CORBALLY

Roy Cohn served Hoover politically through various means, including by acting as his intermediary in political battles and other power struggles. Cohn and Hoover understood the power of blackmail quite intimately, with both allegedly having been blackmailed themselves, leading to their roles in the Plaza hotel “blue suite” parties. Not only is there evidence of Cohn and Hoover participating in sexual-blackmail rackets alongside Lewis Rosenstiel and (in Hoover’s case) Sherman Kaminsky, but there is also evidence of Cohn and Hoover having ties to another sexual-blackmail scandal of the 1960s, one which took place in the United Kingdom and is remembered today as “the Profumo Affair.” The key link between Hoover, Cohn, and the Profumo Affair is a man named Thomas Corbally, who used Cohn as a conduit to pass inside information on the scandal to Hoover’s FBI as it was unfolding.

Corbally came from a family of private investigators, and his family’s detective agency had close ties to organized crime, particularly Meyer Lansky and his immediate network. These ties were extensive enough that the Corbally family used their detective agency to benefit organized crime interests, which included spying on federal agents in the 1920s and 1930s. As a young man, Thomas Corbally served in World War II in the OSS according to Anthony Summers and Stephen Dorril, though this is disputed by others such as author Steven Snider, who calls the claim a “Corbally embellishment.”140 Corbally does appear to have served in intelligence during the war but in military intelligence via the Army Counterintelligence Corps. He subsequently served in the War Department Detachment, a group whose name has been used interchangeably with the Department of the Army Detachment. The latter was a name used as cover by the CIA in Europe in the immediate post-war period.141

In the 1950s, Corbally became a jet-setting private detective who courted the rich and famous, particularly in London and New York. During this period, he met and befriend Roy Cohn, and the two remained close, with Cohn serving as Corbally’s attorney over the years. In the 1960s, Corbally began living in London, sharing an apartment with William Mellon Hitchcock of the wealthy Mellon family, who was previously mentioned in Chapter 1. Mellon Hitchcock was the former in-law of David Bruce, an OSS station chief and close ally of William Casey. During the time Corbally and Mellon Hitchcock shared an apartment in London, Bruce was US ambassador to the United Kingdom.

While living together, Mellon Hitchcock and Corbally developed a reputation for throwing “wild parties” or “orgies” for the elite.142 At the same time, Corbally was courting organized crime networks in the United Kingdom, becoming close to Irish gangster Johnny Francis, who later facilitated the entry of Philadelphia mob boss Angelo Bruno into various businesses in London. Those interests included the Colony Sports Club, where Meyer Lansky associate and Washington, DC-based mobster Joe Nesline held a significant stake.

Both Bruno and Francis worked closely with Ronnie and Reggie Kray, twin brothers and nightclub owners who ran the London-based organized crime gang known as “The Firm” for over a decade. As Stephen Snider and Douglas Thompson have both noted, the Kray brothers “were known to have supplied ‘rent boys’ [teenage boys] to Lord Boothby [Conservative MP and former Churchill aide] during” the time they were associated with Johnny Francis.143 Declassified MI5 documents reveal that British intelligence was aware of the Boothby-Kray association that included “sex parties” and “rent boys” at the time these events took place, with those documents also referring to both Boothby and Ronnie Kray as “‘hunters’ of young men.”144

Corbally was not only plugged into the more powerful crime networks in the UK, but he was also a member of the Clermont Club, an elite group of gamblers in 1960s London. Many of Clermont’s members became extremely powerful during the government of Margaret Thatcher. Several members also later developed close ties to Robert Maxwell, Ghislaine Maxwell’s father, and the global arms trade. The Clermont Club was opened by John Aspinall in London’s Mayfair district in 1962. Aspinall gave £3,000 to Corbally shortly after he opened the exclusive casino. While he publicly claimed the payment was to settle an old gambling debt with the detective, others associated with the club claimed it was meant as tribute to the organized crime networks that, by that time, were deeply connected to Corbally.

The Clermont Club, as noted in Adam Curtis’ documentary series The Mayfair Set, acted as a catalyst for the formation of a power nexus around a series of powerful businessmen and politicians who were incredibly influential during Margaret Thatcher’s government during the 1980s.145 At the center of this nexus were figures such as David Stirling, Sir James Goldsmith, and Roland Walter Rowland. Goldsmith later employed Thomas Corbally directly. Lord Boothby was also a member of the Clermont Club.

Stirling and Rowland, in particular, had significant ties to the global arms trade as well as relationships with Saudi weapons dealer Adnan Khashoggi, who later became a client of Roy Cohn as well as Jeffrey Epstein around the same time, as well as a key figure in the Iran-Contra affair. Both Stirling and Rowland also had their own associations with the Iran-Contra operation. Roland Walter Rowland, better known as “Tiny” Rowland, was also a very close associate of Robert Maxwell, as was fellow Clermont Club member and corporate raider James Goldsmith. Goldsmith not only had ties to Maxwell, but also to white collar crime-linked figures including Charles Keating, Michael Milken, and, later, Jeffrey Epstein. Both Keating and Milken were directly connected to the savings and loan scandal of the 1980s that, according to Pete Brewton and others, was largely the result of a collaboration between the CIA and organized crime. The Goldsmith- Epstein connection is revisited in Chapter 11. Another figure at the Clermont Club was Jack Dellal, whose family business later backed Christine Maxwell’s homeland-security-focused software venture, Chiliad (see Chapter 21).

In the context of Corbally and the Profumo affair, another very important member of the Clermont Club was a man named Stephen Ward. Ward was an osteopath, who became intimately acquainted with top figures in Britain’s aristocracy through W. Averell Harriman. Harriman was the former governor of New York whose Wall Street firm, Brown Brothers Harriman & Co., had been financially entangled with assets of Nazi Germany well after World War II had begun. Harriman’s bank employed George H.W. Bush’s father Prescott Bush and his maternal grandfather father George Herbert Walker. At the time he was promoting Ward, Harriman was an “Ambassador at Large” of the Kennedy State Department.146

Ward’s friends among the British elite included the Churchills and photographer of the royal family Sterling Henry Nahum.147 Nahum was particularly close to Lord Louis Mountbatten, Prince Philip’s uncle and mentor to Prince Charles.148 Nahum, Ward, and Lord Mountbatten were attendees of the so-called Thursday Club, which Nahum is said to have founded. Other attendees at the Thursday get-togethers included Prince Philip and the Kray twins.149 Many of the attendees of the Thursday Club dinners were involved in sex parties, such as those hosted by Corbally and Mellon Hitchcock. Nahum was also a regular host of such parties at his apartment in Piccadilly, some of which featured “girls dressed only in Masonic aprons.”150 Ward regularly attended Nahum’s sexually explicit get-togethers as well as analogous events hosted by elite members of British society.

Ward’s “talents” were quickly recognized by British intelligence outfit MI6, which had a “reputation for targeting visiting dignitaries in the UK with sexual blackmail operations and recognized Ward’s potential in this regard,” according to Steven Snider.151 Ward was first approached by MI6 agent Harold Tracey in 1952 and Tracey cultivated him for years with the help of a close confidant of Ward’s, Warwick Charlton. Tracey regularly passed MI6-derived money to Ward via Charlton, but MI6 has since claimed that they never made “operational use” of Ward, despite their known interest and funding.152

During the early 1960s, when Corbally and the Clermont Club were becoming established in London, a British politician named John Profumo, who was then serving as the UK’s Secretary of State for War, met Christine Keeler. Keeler was a nineteen-year-old model who lived with Stephen Ward, and she began having an affair with Profumo shortly after they met. Keeler was simultaneously having an affair with Eugene Ivanov, a Soviet military attache and GRU agent in London. Ward allowed Keeler and Ivanov to use his apartment over the course of their affair, and Ivanov had his own ties to Ward, having sought to use Ward as a back channel between the Soviet Union and the UK during the 1962 Cuban Missile Crisis. MI5 began to have concerns that Ivanov was “working” Ward, and Keeler later asserted that Ward was a British and Soviet double agent. Incidentally, Ward was also close to the Astor family and rented a cottage from them. The Astor family’s estate at Cliveden was the site of Profumo and Keeler’s first meeting, which led to their subsequent affair.

The scandal began only after Keeler, for reasons that are still unclear, told Labour MP John Lewis that she was having affairs with both Ivanov and Profumo. Lewis subsequently informed Profumo’s political enemy, Labour MP George Wigg. Wigg, like Ward, was an asset of British intelligence at the time. Between her testimony to Lewis and via him to Wigg, Keeler also told her story to the British press, causing a scandal to erupt around Profumo and leading not only to his resignation but to the breakdown of Harold Macmillan’s Conservative government. As an aside, Macmillan’s wife was allegedly in a long-term adulterous relationship with the aforementioned Lord Boothby, who was a member of the Clermont Club along with Stephen Ward and tied to the same organized-crime networks as Corbally.

According to Phillip Knightley and Caroline Kennedy in An Affair of State, as cited by Steven Snider, it was David Bruce – William Mellon Hitchcock’s former in-law and former OSS station chief – who involved Corbally directly in the Profumo affair.153 According to the authors, Bruce was asked by Macmillan to uncover the truth surrounding Profumo’s relationship with Keeler, and Bruce turned to Corbally for information due to Corbally’s relationship with Ward, his profession as a private detective, and his close friendship with Mellon Hitchcock. Snider also notes a different account of these events is offered by Anthony Summers and Stephen Dorril in their book The Secret Worlds of Stephen Ward. Summers and Dorril assert that it was Ward himself who “dropped in” on Corbally and Mellon Hitchcock, where he confessed everything to them and begged them for help in preventing Keeler’s story from going to press.154

Whatever the details, Ward, Corbally, and Mellon Hitchcock ultimately met with David Bruce’s assistant Alfred Wells, and Ward told Wells how the incidents at the heart of the Profumo affair had transpired. At least a month prior to that meeting and apparently before Keeler had revealed the affair to John Lewis, both Corbally and Mellon Hitchcock had known about Profumo and Keeler via Ward. Bruce’s role in these meetings with Wells seems odd, as he sat on this inside information about the affair despite its security implications for the US State Department and the Anglo-American establishment.

Hoover’s FBI got the inside scoop from Corbally and began investigating other women of interest in Stephen Ward’s circle while the Profumo affair was just beginning. Corbally kept the FBI informed of developments in the scandal through Roy Cohn, Corbally’s longtime friend and attorney. In the public release of the FBI case files on the affair, nicknamed the “Bowtie dossier,” the information that Cohn gave to the FBI is entirely censored, as is a seventeen-page interview the FBI had with Corbally.155 One of the reasons for these extensive redactions likely owes to the ties between the other women associated with Stephen Ward and efforts to sexually blackmail John F. Kennedy. Peter Dale Scott discusses this subject in Deep Politics and the Death of JFK, drawing partially on the work of Anthony Summers in Official and Confidential:

[Meyer] Lansky had by the 1930s acquired compromising evidence of Hoover’s homosexual activities. In the 1950s, Meyer Lansky, and other mob figures such as Sam Giancana, supplied women to John F. Kennedy, some of whom were logged into Hoover’s growing files of dirt on the young senator. In the 1960s this deep political equilibrium was threatened by Robert Kennedy’s war on organized crime, which alienated Hoover. Feeling increasingly threatened, especially after the Kennedys began to collect their own files on Hoover, both Hoover and the mob began to escalate their collection of Kennedy sexual dirt. At first Hoover gained White House influence by protecting the Kennedys against mob blackmail, but in 1963 Hoover, desperate, began to leak some of his own dirt on Kennedy to the public.

Hoover’s sexual dirt on the Kennedys began to surface in late June 1963, after the President’s “peace speech” at American University with its appeal, “Let us reexamine our attitude toward the Cold War.” On June 20, the United States and the Soviet Union signed an agreement establishing a “hot line” between the Kremlin and the White House.

A week later, there was a flurry of veiled hints linking the President to the Profumo story, such as the Drew Pearson-Jack Anderson column for June 29: “Britishers who read American criticisms of Profumo throw back the question ‘What high American official was involved with Marilyn Monroe?’”

On the same day, in a front-page story, the Hearst paper in New York, the Journal-American, linked the Christine Keeler-Stephen Ward sex ring itself to a” ‘high U.S. aide,” one of the biggest names in American politics. Back in 1960, after his election but before his inauguration, the President had slept with two members of the ring, including Mariella Novotny (a former stripper in London’s Club Pigalle).156

Mariella Novotny, born Stella Marie Capes, met Stephen Ward through her job as a stripper at the Mayfair nightclub The Black Sheep. The owner of that club, Horace Dibben, was a close friend of Ward’s who also had an interest in sex parties. Dibben’s sex parties were alleged to have a notably occult element, with allegations of “black magic and men in masks” as well as “ritual sadomasochism” based around a master/slave dynamic. Novotny was directly involved in Dibben’s occult-themed sex parties, which reportedly attracted prominent individuals in Harold Macmillan’s government as VIP guests as well as Stephen Ward.157

Novotny was subsequently whisked away from London to New York, where she began working as an upscale prostitute, servicing a lengthy list of powerful men out of four different apartments just months after she arrived. She had been brought to New York through her affair with Harry Alan Towers, a British television producer, and both were charged with operating a sexual-blackmail ring in New York that specifically targeted UN diplomats and other men of influence. John F. Kennedy was also reportedly one of her “clients.”

Before she fled the US in 1961, Novotny left her address book, replete with the names and contact information of America’s rich and powerful, with the FBI. For “mysterious reasons,” the FBI dropped its case against Novotny and Towers and chose to destroy Novotny’s address book as well as their files on both Novotny and Towers.158

The other woman linked to both Stephen Ward and efforts to sexually blackmail John F. Kennedy was Suzy Chang, a former nurse turned model who moved to London at nineteen. How Chang met Ward is still unknown, though Chang later described Ward as “a good, good, good friend” whom she had met sometime in the early 1950s.159 Chang was associated with Ward’s close friend and Thursday Club founder Sterling Henry Nahum and lived at the Nell Gywne House in London, where another woman working with Ward also lived. William Mellon Hitchcock, Corbally’s London roommate, later referred to Chang as “one of Stephen’s girls,” and Chang later confirmed that she knew Corbally as well.160

Novotny is the source of the claim that Chang had sex with John F. Kennedy, which is possible given that Chang was in the US in both 1960 and 1961. Chang acknowledged knowing Kennedy but denied having sex with him. According to Snider, she reportedly denied the affair with “less vigor” as time went by, however.161 Another noteworthy event that, according to Snider, was more indicative of “shadowy purposes” was Chang’s mother hiring the law firm of former OSS chief William Donovan to secure Suzy Chang a visa to the US in 1962.162 The year 1962 was a critical year for John Kennedy, and it also happened to be the year that the Profumo affair first surfaced.

The first stories on the Profumo affair emerged in the midst of the Cuban Missile Crisis, which may explain why Keeler decided to go public with her story and create a scandal around her lover, costing him his career and setting in motion the destruction of the entire Macmillan government. As previously mentioned, Ivanov had attempted to use Ward as a back channel during the crisis. Not only that, but Ivanov and Ward were also working with Permanent Undersecretary of the British Foreign Office, Harold Caccia, to arrange a summit conference in England to resolve the crisis. The precise timing of the Profumo affair ensured that Ivanov would be rapidly recalled to Moscow, thus scuttling plans for the summit.

In addition, as Peter Dale Scott points out, the reports attempting to link President Kennedy to the Profumo affair only emerged after Kennedy’s June 1963 “peace speech.” That speech deeply unsettled the anti-Communist network that included Hoover, Cohn, and others, and stories attempting to tie Kennedy to Profumo’s scandal were published by the Hearst Journal-American. The paper’s editor, Guy Richards, was very much involved in this anti-Communist network and had “excellent intelligence contacts,” according to Peter Dale Scott, citing Anthony Summers.163 Summers also noted that the story was published shortly after Richards brought an anti-Communist friend of Keeler’s, Michael Eddowes, to the United States.

In addition, Roy Cohn was a longtime close personal friend of Richard Berlin, the top manager of the Hearst newspaper conglomerate, which owned the Journal- American.164 Cohn was notorious for placing stories in Hearst newspapers, as well as publications controlled by his other close friends, such as Si Newhouse, for the benefit of his clients and his network.

The Profumo affair was probably Corbally’s most notable tie to a sex-blackmail ring, but it was hardly his only such connection. Years later, Corbally was deeply connected to the so-called Hollywood madam, Heidi Fleiss, as well as a VIP S & M scene in the Hamptons. Corbally claimed, in the case of the latter, to have started that ring, which he said he had “imported” from the UK.165 He was also said to possess numerous “pictures of various individuals engaged in some rather strange sexual practices that were staples of these parties.”166 Another important association of Corbally’s, though not tied necessarily to sexual blackmail, was his connection to Jules Kroll of Kroll and Associates, with many early Kroll employees crediting Corbally for the firm’s initial success. Kroll and Associates, long known as the “CIA of Wall Street” and believed by French intelligence to have been an actual front for the CIA, makes a few, yet critically important appearances in the last days of Robert Maxwell and other events related to Maxwell’s posthumous legacy in the US, which are discussed in more detail in Chapter 15.

THE UNITED DYE WEB

Another interesting figure in Corbally’s close orbit worth exploring is his mentor, John G. “Steve” Broady. Broady was a private investigator who had more than a few run-ins with the law, including for his role in the wiretapping of then mayor of New York William O’Dwyer on behalf of Broady’s longtime employer Clendenin Ryan.167 Ryan was not only Broady’s principal sponsor, but also the main financial backer of the International Services of Information Foundation, a private intelligence outfit that had been formed by Ulius Amoss, a veteran of the OSS. Amoss was known, after his service in the OSS, for investing in companies embedded in the country’s growing military-industrial complex, some of which were alleged to be CIA fronts for money laundering.168 Another prominent figure linked to the foundation was Charles Willoughby, Douglas MacArthur’s former intelligence chief, who was a trustee.

Clendenin Ryan’s son, Clendenin Ryan Jr., was close to a man named Douglas Caddy, who led an anti-Communist group called Young Americans for Freedom (YAF). Clendenin Ryan Jr. and Caddy were roommates at Georgetown University, and the former was “tangentially involved in founding YAF.”169 Another key member of YAF was former CIA officer, National Review founder, and close friend of Roy Cohn, William F. Buckley. Caddy’s ties to the George Town Club, “established in 1966 for the purpose of bringing together leaders who had an impact on the United States, and the world,” via another of his college roommates, Tongsun Park, and the sex blackmail rings that surrounded both that club and the Watergate scandal are discussed in the next chapter.170

Another associate of Broady’s was Peter Crosby, whose brother – James Crosby – was the chairman of Resorts International (formerly Mary Carter Paint) in the Bahamas. Top investors in Resorts International included the Moody family company American National Insurance Company (ANICO) and Delafield & Delafield. ANICO and the Moody family, specifically Roy Cohn’s close friend Shearn Moody Jr., are mentioned in future chapters. Delafield & Delafield is worth noting as it was William Mellon Hitchock’s employer.171

Peter Crosby was a stock manipulator and associate of organized crime figures who made an appearance in the financial webs surrounding the United Dye stock swindle, the aftermath of which resulted in the indictment of Roy Cohn in the early 1960s. During their “adventures” together in the 1970s, Crosby and Broady were arrested in 1973, though only Crosby went to prison. According to the late journalist Gary Webb, Broady evaded conviction because of his past work for the CIA, an association Broady denied but that was attested to by Crosby associates. Webb, citing reports in the Kentucky Post, also noted that the papers confiscated from Crosby and Broady at the time of their arrest showed that the two men dealt “with many of the same men believed by investigators to be part of a nationwide network of confidence men and organized crime figures.”172 Crosby certainly seems to have been part of such a network.

Before his 1973 arrest, for example, he was involved in shady financial dealings with William McCarthy, brother of Texas oil tycoon Glenn McCarthy. Those dealings centered around American Montana Oil & Gas, a dummy corporation through which McCarthy aimed to seize properties then controlled by Ajax Oil Company. Other companies were involved in McCarthy’s Ajax takeover plan, including Sundown Oil Company, which counted Paul Roland Jones as a director. Jones was a known figure in Chicago’s organized crime scene who had relocated to Texas in 1947 and was implicated in narcotics trafficking.173 He also, incidentally, had connections to Jack Ruby (born Jacob Rubenstein), the gangster who is now best known for killing Lee Harvey Oswald after the assassination of John F. Kennedy. Ruby also had connections to the Moody family of ANICO. Crosby and McCarthy entered into an arrangement with Satiris “Sonny” Fassoulis as part of this elaborate scheme. Fassoulis also had a business relationship with a man named Alexander Guterma and the Bon Ami company, which played a critical role in the United Dye swindle.

Guterma was a Russian national who came to the United States in the 1950s, arriving first in California before relocating to Florida. There he launched Shawano Corporation and began acquiring other companies by trading Shawano stock. He soon made his way to Las Vegas, where “he found the Vegas mob at the Desert Inn eager to unload the hotel.”174 Guterma “then traded Shawano stock for the little Isle d’Capri Hotel, Bay Harbor Islands, forming the nucleus of United Hotels Inc., which was to dump the Desert Inn on the public if need be.175 The Desert Inn was very much a focus of Cohn’s trial related to United Dye. As previously mentioned, the Desert Inn’s manager, Allard Roen, was also in the employ of mobster Moe Dalitz and was a key figure in the United Dye trial. So was Sam Garfield – a lifelong friend of Dalitz.

The government asserted in its case against Cohn that Eli Boyer, the accountant who helped Cohn take control of Lionel Corporation, had been used by Cohn to pipeline threats to Roen to keep him from giving truthful testimony to the grand jury investigating United Dye. Boyer confirmed this in his testimony. In addition, Boyer, Roen, Garfield, Dalitz, and Cohn had all been the original investors together in a venture called Sunrise hospital.176 In June 1955, Guterma and Sam Garfield as well as Irving Pasternak teamed up to acquire the Franklin County Coal Corporation. That same month, Guterma became an associate of Virgil Dardi, who was then a director at United Dye and subsequently arranged to sell Guterma a large bloc of shares in the company. Guterma then distributed that stock between himself, Garfield, Pasternak, and others. By that September, Guterma had become chairman of the United Dye board, with Dardi serving as its president.177

The following year, Guterma took control of a manufacturing company called F. L. Jacobs. The intention of Guterma and his associates was to “loot and divert for their own purposes the assets of F. L. Jacobs and to use its credit as collateral for loans, the proceeds of which were diverted to Guterma’s own use and benefit.”178 Soon after, Dardi informed Guterma that the Bon Ami company had 63,000 shares for sale; they then arranged for the purchase of those shares by United Dye via a loan from F. L. Jacobs. Guterma later testified that they had taken control of Bon Ami to “enable Garfield and Pasternak to satisfy the $519,000 obligation owed by them to United Dye.” To support Guterma’s testimony in the United Dye case, the government “introduced evidence of various ‘loan’ transactions involving Garfield and Pasternak and, as directors of Bon Ami, Guterma and Dardi,” many of which involved United Dye.179

When the decision was made to use the United Dye grand jury to “get Cohn,” Garfield and Pasternak evaded being sentenced in exchange for their testimony against Cohn and other accomplices. As previously mentioned, their deals to obtain immunity, which were not publicly acknowledged, helped convince a jury to acquit Cohn during the retrial (i. e., the second trial that followed the initial mistrial) of the United Dye case. Guterma had already been found guilty and was serving a four-year prison sentence for having looted millions from F. L. Jacobs when Cohn’s case went to trial. He was sentenced in 1961.

Before Guterma was caught and the United Dye swindle unraveled, Guterma and Dardi used Bon Ami company to establish ties with some interesting figures as they obtained a controlling stake in the company. In 1957, Guterma and Dardi entered into negotiations with an entertainment executive named Matthew Fox in which they sought to purchase $5 million worth of spot time for TV commercials for Bon Ami.180 Bon Ami loaned Fox $115,000, and Fox arranged for Guild Films to supply Bon Ami spot time if Fox defaulted on the loan, which he did.

Fox was much more than a television/movie executive, however, as he had led a CIA front in Indonesia, the American-Indonesian Corporation, until the early 1950s.181 In that capacity, Fox had controlled extensive rights to develop Indonesia’s natural resources and also controlled all Indonesian government buying and selling in the United States.182 He was also involved in covertly supporting the CIA-backed prime minister of the country, Mohammed Hatta, at the behest of agency intermediaries.183

That same year, 1957, Guterma entered into negotiations with Sonny Fassoulis, leading to Fassoulis’ acquisition of over 100,000 shares of Bon Ami stock. At the time, 25,000 of these shares were owned by another Gutermacontrolled company, the Chatham Corporation. Fassoulis did not have the money for the purchase, however, and sold film rights held by a company he controlled, Icthyan Associates, to Bon Ami to cover the cost. The so-called Icthyan package was intended to “enable Bon Ami to obtain television spot time by transferring the ‘Icthyan Package’ to Guild Films as credit against the purchase price of a large quantity of television spot time.”184

Well before Fassoulis and Fox entered the scene as it related to Bon Ami, they appeared to have already been involved in a shadowy financial network that involved Virgil Dardi. In 1953, Fox was the chairman of a company called Pola- Lite, and Fassoulis was its president. Pola-Lite was actually the subsidiary for an intelligence-linked company named Commerce International Corporation that Fassoulis ran.185 Around the same time, in 1954, it was reported that Matthew Fox was president of C & C Television corporation, a subsidiary of C & C Super Corporation, where Virgil Dardi served as a director. This connects Fassoulis, Fox, and Dardi together years before Guterma and Dardi became involved in the events surrounding the United Dye situation.

Around the same time the United Dye scandal erupted, in the early 1960s, an investigation was launched into the David, Josephine and Winfield Baird Foundation and the Lansing Foundation, both of which were controlled by New York businessman David Baird. The Baird Foundation was listed as owning 24.5 percent of the C & C Television Corporation that Matthew Fox ran, and the foundation also owned significant rights to several other C & C subsidiaries. The Baird Foundation’s clients included several organized crime associates, such as Lansky front man Louis Chesler; real estate magnate William Zeckendorf; and Lawrence Wien, another real estate magnate who was a partner in the Dalitz-linked Desert Inn that was tied to the United Dye case. As mentioned in Chapter 1, Wien had bought the Empire State Building from “Supermob” figure Henry Crown.

Other clients of the Baird Foundation included Allen & Co., which later became closely involved with Les Wexner’s “mentor” Max Fisher, as well as the director of Maurice L. Rothschild, Nathan Cummings. Cummings was a director of Bon Ami company and was personally involved in selling the controlling stake of that company to United Dye when it was controlled by Guterma and Dardi.186 Cummings subsequently departed Bon Ami, which opened spots for Guterma and Dardi on its board.

As for David Baird himself, he and Charles Allen of Allen & Co. were known to have dealings with Guterma, even after the Las Vegas mob, specifically the Desert Inn crowd tied to Moe Dalitz, “had exhausted its use” of Guterma in the aftermath of United Dye’s unraveling.187 In addition, Louis Mortimer Bloomfield, attorney for Permindex and whose law firm was deeply enmeshed with the Bronfman family, wrote to Carlo d’Amelio of Permindex’s Italian subsidiary in 1961, describing the interest that Permindex had cultivated among American businessmen, specifically David Baird, in their affairs and projects.188

Another interesting thread concerning David Baird is related to his client and the de facto banker for the Baird Foundation, Serge Semenenko. Semenenko was the vice president of First National Bank of Boston, whose executives were close to the CIA. The Baird Foundation itself was later revealed to be an asset of the CIA’s International Organizations Division and, between 1961 and 1964, received $456,800 of agency funds in “pass throughs” that were piped into CIA programs in the Middle East and Africa.189

In addition to the direct CIA connection, there is also some level of connection between Baird and Meshulam Riklis. As mentioned in Chapter 2, Riklis took over not only Lewis Rosenstiel’s business empire but purchased his blackmail-ready townhouse at around the same time.

Jonathan Marshall, in his article “Wall Street, the Supermob and the CIA,” notes:

Not long after Semenenko left First National, at the height of the 1960s merger mania, he began wheeling and dealing with Baird over the fate of Stanley Warner Corp., a leading theater owner that Baird had advised on financial matters since 1956. The first public hint of their dealings came in November 1967, when New York City newspapers touted Baird’s philanthropy by reporting that he was chairing the annual Celebrity Ball of the Variety Club of New York in honor of Democratic Rep. Emmanuel Celler. Vice chairmen for the ball were Semenenko, Stanley Warner Corp. Chairman S. H. Fabian, and Meshulam Riklis, the young, Odessa-born chairman of Glen Alden Corp., a fast-growing conglomerate that was angling to acquire Stanley Warner.”190

Marshall goes onto reveal that Celler, once the chairman of the House Judiciary Committee, was a “notable friend” of Lewis Rosenstiel. He also notes that David Baird received a $3 million finder’s fee for his role in arranging sale of Stanley Warner stock to Riklis’ Glen Alden Corporation. Shortly thereafter, Riklis, via Glen Alden, took control of Rosenstiel’s Schenley Industries. Incidentally, another Baird associate, Charles Allen of Allen and Co., had previously considered acquiring Schenley before Riklis succeeded in doing so.

Ultimately, this series of serpentine financial connections reveals a dense web linking several organized crime figures, their intermediaries, organized crime– linked businessmen, and intelligence agencies. Some key figures in this network, as mentioned in this and previous chapters, engaged in various forms of blackmail and power plays to ensure the continued growth of both their legal and illegal financial interests. As we shall see, this incestuous web of crime, intrigue, and covert action that was tightly interwoven throughout major events of the 1960s would continue its expansion, largely unimpeded and employing many of the same tactics, throughout the decades that followed.

_______________

Endnotes

"Samuel Bronfman Dead at 80; Founded Distillers Corporation;' New York Times, July 11,
1971, httQs:llwww.nytimes.com/1971/07/11/archiveslsamuel-bronfman-dead-at-80-
foundeddistillers-corRoration-his.html.
2 Peter C. Newman, Bronfman Dynasty: The Rothschilds of the New World (Toronto: McClelland
and Stewart, 1978), 46.
3 "Samuel Bronfman;' Entrepreneur, October 10, 2008,
httRS:ljwww.entreRreneur.com/article/197618.
4 Wolfgang Saxon, "Rudolf Sonneborn Dies at 87; A Zionist Leader in the US;' New York Times,
June 4, 1986, httQs:llwww.nytimes.com/1986/06/04/obituaries/rudolf-sonneborn-dies-at-
87-a-zionist-leader-in-the-us.html.
5 Ricky-Dale Calhoun, "Arming David: The Haganah's Illegal Arms Procurement Network in the
United States, 1945-49;' Journal of Palestine Studies 36, no. 4 (July 1,2007): 22-32,
httj:2S:lldoi.org/l 0.1525/jRS.2007.36.4.22.
6 Calhoun, "Arming David;' 25.
7 Calhoun, "Arming David;' 26.
8 "Marina Request Rouses Protest;' Miami News, October 31, 1958.
9 Robert Rockaway, "Gangsters for Zion;' Tablet, April 18, 2018,
httQs:llwww.tabletmag.com/sectionsl a rts-Iettersl a rti desl ga n g sters-for-zi on.
10 Michael Feldberg and American Jewish Historical Society, Blessings of Freedom: Chapters in
American Jewish History (NJ: KTAV Publishing House, 2002), 223.
11 "Federal Bureau of Narcotics Memo on Joseph Zicarelli;' Doug Valentine Drug War
documents, April 1, 1961, httr,d/archive.org/details/DougValentineDrugWarDocuments.
12 Scott M. Deitche, Garden State Gangland: The Rise of the Mob in New Jersey (Lanham:
Rowman & Littlefield, 2018), 84.
13 Jonathan Marshall, Dark Quadrant: Organized Crime, Big Business, and the Corruption of
American Democracy: From Truman to Trump, ePub (Lanham: Rowman & Littlefield, 2021),
107.
14 Valentine, "Memo on Joseph Zicarelli:'
15 Gordon Thomas and Martin Dillon, Robert Maxwell, Israel's Superspy: The Life and Murder of a
Media Mogul (New York: Carroll and Graf, 2003), 54.
16 Calhoun, "Arming David;' 30.
17 See, for example, Ignacio Klich, "Latin America, the United States and the Birth of Israel: The
Case of Somoza's Nicaragua;' Journal of Latin American Studies 20, no. 2 (November 1988):
389-432, httRS:lldoi.org/1 0.1 017/S0022216X00003047.
18 Calhoun, "Arming David;' 27.
19 Margo Gutierrez, "Israel in Central America;' Middle East Research and Information Project,
June 1986, https:llmerip.orgI198610Slisrael-in-central-americal.
20 Jim Hougan, Spooks: The Haunting of America: The Private Use of Secret Agents (New York:
Morrow, 1978), 172.
21 Hougan, Spooks,l72.
22 Sandy Smith, "Monsters in the Marketplace: Money, Muscle, Murder;' Life, September 8,
1967.
23 Smith, "Monsters."
24 Marshall, Dark Quadrant, 204.
25 Dennis Eisenberg, Uri Dan, and Eli Landau, Meyer Lansky: Mogul of the Mob (New York:
Paddington Press, 1979), 266.
26 Marshall. Dark Quadrant, 247-48.
27 Jonathan Marshall, "Nixon's Caribbean Milieu, 1950-1968;' Dark Quadrant Appendix,
http-s:!!rowman.com!WebDocs!Dark Quadrant Ap-p-endix Nixon-Caribbean.p-df.
28 Marshall, "Nixon's Caribbean Milieu:'
29 Peter Dale Scott, Deep Politics and the Death of JFK (University of California Press, 1996), 202-
5.
30 Alan A. Block, Masters of Paradise: Organized Crime and the Internal Revenue Service in the
Bahamas (Routledge, 1991), 51.
31 R. T. Naylor, Hot Money and the Politics of Debt (New York: Linden Press, 1987),34; Jonathan
Marshall, The Lebanese Connection: Corruption, Civil War, and the International Drug Traffic
(California: Stanford University Press, 2012),49.
32 Marshall, The Lebanese Connection, 50.
33 Marshall, The Lebanese Connection, 53 .
34 Sen. John Kerry and Sen. Hank Brown, The BCCI Affair: A Report to the Committee on Foreign
Relations, 1 02nd Congress 2nd Session US Senate, December 1992, 299.
35 Marshall, The Lebanese Connection, 43.
36 Marshall, The Lebanese Connection, 134.
37 Douglas Valentine, The Strength of the Wolf: The Secret History of the War on Drugs, ePub
(Verso, 2004), 407.
38 Marshall, The Lebanese Connection, 47.
39 Hougan, Spooks, 213.
40 Henrik Kruger, The Great Heroin Coup: Drugs, Intelligence & International Fascism (Montreal:
Black Rose Books, 1980)' 88.
41 Valentine, The Strength of the Wolf, 261.
42 Hougan, Spooks, 213.
43 Jonathan Beaty and S.c. Gwynne, The Outlaw Bank: A Wild Ride Into the Secret Heart of BCCI
(Ramjac Inc, 1991), 309.
44 Alan A. Block and Constance Weaver, All is Clouded by Desire: Global Banking, Money
Laundering, and International Organized Crime, (Praeger, 2004), 27.
45 "Top Ten Fugitives - Global Con Artist and Ruthless Criminals;' FBI, October 2009,
http-s:l!www.fbi.gov!news!stories!2009!october!mogilevich 102109.
46 The use of Safra's Republic National Bank by Russian organized crime interests, some of
which involving Mogilevich, is discussed in Constance and Weaver, All is Clouded By Desire;
Robert I. Friedman, Red Mafiya: How the Russian Mob Invaded America (Little, Brown &
Company, 2000).
47 Block and Weaver, All is Clouded by Desire, 8.
48 Rockaway, "Gangsters for Zion:'
49 Marc Goldberg, "Teddy Kollek: The British Spy Who Never Was;' Tablet, December 15,2020.
50 "Baruch Rappaport, the man who founded and continues to support the Faculty of
Medicine at the Technion, speaks for the first time in the media;' Hayadan, October 19,2004.
51 "Baruch Rappaport:'
52 Jonathan Nitzan and Shimshon Bichler, The Global Political Economy of Israel (Pluto Books,
2002), 116.
53 Noga Tarnopolsky, "Ehud Barak: I Visited Epstein's Island But Never Met Any Girls;' The Daily
Beast, July 15,2019, httl~s:1 Iwww.thedailybeast.com/israels-ehud-barak+visited-eRsteinsisland-
but-never-met-any.:girls.
54 "Yehuda Assia Banker to the Mossad, Dies at 99;' Haaretz, September 3, 2016.
55 Avner Cohen, Israel and the Bomb (Columbia University Press, 1998), 70.
56 Jonathan Marshall, "'Bayonne Joe' Zicarelli, Irving Davidson, and Israel,"
httRs:llrowman.com/WebDocs/Dark Quadrant Addendum to ChaRter 4.Rdf
57 American Bank & Trust appeared in the strange story of Argentine financier David Graiver,
who controlled the bank at the time of its collapse in 1976. Graiver had maintained a bank
in Belgium called Banque pour L' Amerique du Sud (BAS), which according to Barron's
journalist Richard Karp was simply a money laundering operation. In order to finance BAS,
Graiver took control of American Bank & Trust and systematically looted it via the aid of
roughly 13 dummy companies set up to create a byzantine maze of money flows. In the
end, both BAS and American Bank fell apart, and Graiver allegedly died in a fiery plane crash
near Mexico City - though suspicions abounded that he faked his death. It was
subsequently revealed that Graiver may have been the banker for the Montoneros, a leftwing
Peronist paramilitary organization. See Richard Karp, "Hands Across the Sea: Millions
Were Looted from the American Bank & Trust;' Barron's, December 27, 1976; Steven Rattner,
"Financial Intrigue, Mystery Shroud American Bank and Trust Collapse," New York Times,
September 25, 1976, httP-s:/ Iwww.nytimes.com/1976/09/25/archives/financial-intriguemystery-
shroud-american-bank-and-trust-coliaRse.html; Karen DeYoung, "'Argentine
Watergate': Charges of Guerrilla High Finance;' Washington Post, April 18, 1977,
httRS:I Iwww.washingtonRost.com/archive/Rolitics/1977 104/18/argentine-watergatecharges-
of-guerrilla-high-finance/5e3b5b2b-d260-48da-a284-gea9b4b33825/.
58 Marshall, Dark Quadrant, 185-86.
59 Block and Weaver, All is Clouded By Desire, 9.
60 See Atlantic Steamers Supply Co., Inc against Manuel E. Kulukundis, New York Supreme Court
61 "Margaret P. Grafeld Declassified," US Department of State, May 22, 2009,
httRS:I larchive.org/details/State-DeRt-cable-1977-243051 IRage/n 1 Imode/2uP-l
g=Weisscred it&view=theater.
62 "4 Swiss Bankers Convicted;' New York Times, March 1, 1979,
httRS://www.nytimes.com/1979/03101/arch ... icted.html.
63 Steven Greenhouse, "A Secret Emperor of Oil and Shipping," New York Times, February 4,
1988, httRS:llwww.ny.times.com/1988/02/04/world/a-secret-emReror-of-oil-andshigging.
html
64 Greenhouse, "Secret Emperor:'
65 "Liberia's Flags of Convenience;' AI-Jazeera, November 15,2011,
httRS:I Iwww.aljazeera.com/news/2011 11 0/15/Iiberias-flags-of-convenience.
66 "The New Bank of Liberia;' Liberia Today, Vol. 3-4, 1954,8.
67 On Bank of Monrovia and First National City Bank, see Area Handbook for Liberia, US
Government Printing Office, 1964,340. The influence of the Rockefeller family at First
National City came via the presence of James Stillman Rockefeller. He went to work for the
bank in 19305, was elected president in 1952, and became its chairman in 1959. Wolfgang
Saxon, "James S. Rockefeller, 102, Dies; Was a Banker and '24 Olympian;' New York Times,
August 11, 2004, httRS:ljwww.nytimes.com/2004/08/11 Ibusiness/james-s-rockefeller-l 02-
dies-was-a-banker-and-a-24-
0IymRian.html#:~:text=Rockefeller%20joined%20the%2ONational%20City,as%20a%20wori
d%20financial%20Rower.
68 See Ian Smillie, Blood on the Stone: Greed, Corruption and War in the Global Diamond Trade
(Anthem Press, 2010). FO a historical background on the role of Israel in the global diamond
trade and diamond cutting industry, see David De Vries, Diamonds and War: State, Capital
and Labor in British-Ruled Palestine (Berghahn Books, 2010).
69 Libbie Park and Frank Park, The Anatomy of Big Business (Progress Books, 1973),71-77.
70 Park and Park, Anatomy of Big Business, 21.
71 Michele Metta, "Gershon Peres (brother of former Israeli president) was a member of the
CMC," Anti-Diplomatico, November 22, 2017, httRS:llwww.lantidiRlomatico.it/dettnewsesclusivo
ad gershon Reres fratello dellex Rresidente israeliano stato membro del c
mc il centro occulto della cia legato allomicidio kennedy/6 22228/; Michele Metta, On
the Trail of Clay Shaw: The Italian Undercover CIA and Mossad Station and the Assassination of
JFK (Independent, 2019), 141-42.
72 For an overview of Jim Garrison's interest in Clay Shaw and Shaw's ties to the CIA, see Joan
Mellen, "Clay Shaw Unmasked: The Garrison Case Corroborated"
httR1!joanmelien.com/wordRress/2013/1 0/21 Iclay-shaw-unmasked-the-garrison-casecorroborated/
2/. .
73 One of Metta's most fascinating discoveries is that board meetings of CMC and its
subsidiary, the Italo-American Hotel Corporation, were held in the law offices of Robert
Ascarelli at 72/A Piazza di Spagna, in Rome. When Licio Gelli was first organizing the
infamous P2 Masonic Lodge, which operated as a sort of shadow government within Italy,
the early meetings took place in these same law offices. Gelli stated that "In the first phase
we celebrated the initiation rituals [to P2] in Ascarelli 's office, at number 72 in Piazza di
Spagna, on the third floor ... As it wasn't a Masonic headquarters, we used a portable temple
which we carried in a briefcase that we opened on the table ... For each initiation, I provided
Ascarelli with the new Freemason's curriculum vitae, so that when the ceremony was
finished he could talk to the neophyte about his job and his experiences." Metta, On the Trail
of Clay Shaw, 39.
74 Metta, On the Trail of Clay Shaw, 143.
75 Metta, On the Trail of Clay Shaw, 142. One of the directors of Banque Belgo-Centrade was
one Arturo Klein, described by Metta as a 'Chilean right-winger'. Interestingly, a heavilyredacted
CIA report published in a US Senate Subcommittee on International Operations n
assassination plot against Jimmy Carter. "A Staff Report Concerning Activities of Foreign
Intelligence Agencies in the United States;' Subcommittee on International Operations,
Senate Committee on Foreign Relations, January 18, 1979, 118-122.
76 "Louis M. Bloomfield;' Canadian Jewish Chronicle, April 7, 1967.
77 "Israel Day Observation Here Monday;' The Gazette (Montreal), May 25, 1965; Matitiahu
Hindes, "Israel and the Sea," Wisconsin Jewish Chronicle, September 23, 1949.
78 Bernard Reich and David H. Goldberg, Historical Dictionary of Israel (Maryland: Rowman and
Littlefield, 2016), 558.
79 Letter from George H.W. Bush to Louis M. Bloomfield, February 11, 1976,
http-s:llwww.kennedxsandking.com/images/2019/kowalski-metta/exhibit-9.p-df.
80 Maurice Phillips, "Revelations from the Bloomfield Archives (4): Perm index, Bloomfield
Linked to Freemasons and Rothschilds;' I Have Some Secrets For You, April 14, 2010,
http-:llsomese-cretsforxou.blog2P-ot.com/20 1 0104/reveiation s-from-bloomfi eld-a rch ives-
4.html.
81 "Cable from Louis M. Bloomfield to Tibor Rosenbaum," July 12, 1961.
http-s:l/www.kennedxsandking.com/images/2019/kowaIski-metta/exh ibit-8.p-df.
82 "Dov Biegun Dead at 66," Jewish Telegraphic Agency, January 22, 1980,
http-s:llwww.jta.org/archive/dov-biegun-dead-at-66.
83 "Realty Equity Official, Others Indicted on Charges Tied to Sale of Firm's Notes;' Wall Street
Journal, April 14, 1969.
84 Randall Cannon and Michael Gerry, Stardust International Raceway: Motorsports Meets the
Mob in Vegas, 7965-7977 (McFarland, Incorporated, 2018), 346.
85 Maurice Phillips, "The Permindex Papers II: Canadian Attorneys, Venezuelan Corporation,
and French Rothschild;' I Have Some Secrets for You, May 16,2010,
httj:;1:llsomesecretsforxou.blog2p-ot.com/201 0105/p-ermindex-RaRers-ii.html.
86 "Israeli Corporation - Rosenbaum - International Credit Bank Controversy;' Wikileaks (Israel
Tel Aviv, September 30, 1974), http-s:llwikileaks.orgLp-lusd/cables/1974TELAV05552 b.html.
87 Clyde H. Farnsworth, "Israeli Investing Scandal Unveiled By Rothschild;' New York Times,
October 19, 1974, http-s:llwww.nxtimes.com/1974/1 0/19/archives/isra eli-investing-scandalunveiled-
bx-rothschild.html.
88 Oil and Petroleum Year Book, Volume 58, 1967, p. 58; Report of the Royal Commission
Appointed to Inquire Into the Failure of Atlantic Acceptance Corporation, Limited,
September 12, 1969, vol. 3, p. 1484, http-s:llarchive.orgLdetails/rep-ortofroxatlantO30nta.
89 "Seven Oil Companies Prepare to Drill in Israel, Agency Reports;' Jewish Telegraphic Agency,
September 2, 1953, httRS:I Iwww.jta.org/archive/seven-oil-comp-anies-p-rep-a re-to-dri II-inisrael-
agencx-reRorts.
90 Alan Philips, "The Inner Workings of a Crime Cartel," Macleans, October 5, 1963,
httRsj/archive.macieans.ca/articleL1963/1 O/S/the-inner-workings-of-the-crime-cartel.
91 FBN Memo on Joseph Zicarelli.
92 "Cable from Louis M. Bloomfield to Joseph Kowalaski," June 27, 1959,
http-s:LLarchive.orgLdetailsLbloomfield 201907 iTri%20Continental%20PiRe%20Lines/model
l1!R.
93 Galina N ikitina, The State of Israel: A Historical, Economic and Political Study (Progress
Publishers, 1973),290.
94 Nikitina, The State of Israel, 292.
95 Metta, On the Trail ofC/ay Shaw, 167-168.
96 Metta, On the Trail of Clay Shaw, 167.
97 Metta, On the Trail of Clay Shaw, 167. Further information on the relationship between Israeli
intelligence services, Sou stelle and the OAS can be found in Sylvia K. Crosbie, A Tacit
Alliance: France and Israel from Suez to the Six Day War (Princeton University Press, 2015), 140-
41. The Italian newspaper Paesa Sera reported that Permindex's president, Ferenc Nagy, had
helped finance the activities of Sou stelle and the OAS. "The Kennedy Conspiracy:' Paesa
Sera, date unknown, httR:llwww.kenrahn.com/Marsh/Scans/Permindex.txt. Ferenc Nagy's
papers archives at Colombia University libraries in New York City show extensive
correspondence between him and figures like Tibor Rosenbaum, William Donovan, and a
"Dr. Rappaport:' It is unknown whether or not Dr. Rappaport is Bruce Rappaport.
98 Metta, On the Trail of Clay Shaw, 1 70.
99 Mario Ugazzi, "The Mysterious Activity in Rome of the Businessman Prosecuted for the
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100 Ugazzi, "The Mysterious Activity in Rome:'

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Part 1 of 3

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.

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Part 2 of 3

TASK FORCE 157

he 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 nonintelligence 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

eoman 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 oneworld 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 cowri tten 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 cooperation 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 twoway 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

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Part 3 of 3

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, videorecording 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 frontpage 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 highpro file 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 breakins, 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 nowfamous 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

_______________

Endnotes

Nicholas Von Hoffman, Citizen Cohn, 1 st ed (New York: Doubleday, 1988),414.
2 Von Hoffman, Citizen Cohn, 465.
3 Von Hoffman, Citizen Cohn, 49.
4 Von Hoffman, Citizen Cohn, 49.
5 "Albert Cohn Dies; A Former Justice;' New York Times, January 9, 1959,
ht!f2s:Utimesmachine.nytimes.com/timesmachine/1959101/091891 04614.html?
p-ageNumber=27.
6 Von Hoffman, Citizen Cohn, 50.
7 Wheres My Roy Cohn?, 2019, [DVDl Directed by M. Tyrnauer, Sony Pictures.
8 "Albert Cohn Marries; First Assistant District Attorney Weds Miss Dorothy Marcus;' New York
Times, January 12, 1924, http-s:llwww.nytimes.com/1924/01 /12/archives/albert-cohnma
rries-fi rst -assi stant -d istri ct -attorney-wed s-m i ss.htm I ?sea rch Resu It Positi on= 11
9 Von Hoffman, Citizen Cohn, 414.
10 Robert Shogan, No Sense of Decency: The Army-McCarthy Hearings: A Demagogue Falls and
Television Takes Charge of American Politics (Chicago: Ivan R. Dee, 2009), 139.
11 Kenneth T. Jackson, The Encyclopedia of New York City, 2nd edition (New Haven: New York:
Yale University Press; New-York Historical Society), 2010, p. 1015.
12 Christopher M. Elias, Gossip Men: J. Edgar Hoover, Joe McCarthy, Roy Cohn, and the Politics of
Insinuation (Chicago, The University of Chicago Press, 2021), 120.
13 Michael Whitney Straight, Trial by Television and Other Encounters, 1 st ed. (New York: Devon
Press, 1979), 180; "Justice Albert Cohn Takes Office;' New York Times, April 3, 1929,
http-:lltimesmachine.n)'.!imes.com/timesmachine/1929/04103/95902552.html?
p-ageNumber=37.
14 "Justice Albert Cohn Promoted;' New York Times, April 28, 1937, p.17.
15 Nicholas Pileggi, "The Mob and the Machine;' New York Magazine, May 5, 1986.
http-s:llnymag.com/news/features/crime/4661 01.
16 David Samuels, "The Mayor and the Mob," Smithsonian, October 2019,
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180973078/.
17 Pileggi, "The Mob and the Machine:'
18 Sally Denton and Roger Morris, The Money and the Power: The Making of Las Vegas and Its
Hold on America, 7947-2000, 1 st ed (New York: Alfred A. Knopf, 2001), chap. 1,
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19 James Cockayne, "How the Mafia Almost Fixed the 1932 Democratic National Convention,"
The New Republic, July 25,2016, http-s:llnewrep-ublic.com/article/135466/mafia-almostfixed-
1932-democratic-national-convention; Martin A Gosch and Richard Hammer, The Last
Testament of Lucky Luciano: The Mafia Story in His Own Words (Enigma Books, 2013), 163.
20 Dennis Eisenberg, Uri Dan, and Eli Landau, Meyer Lansky: Mogul of the Mob (New York:
Paddington Press: distributed Grosset & Dunlap, 1979), 173; Gosch and Hammer, Last
Testament of Lucky Luciano, 163-64.
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
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Gosch and Hammer, Last Testament of Lucky Luciano, 105.
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Shogan, No Sense of Decency, 122.
Denton and Morris, Money and Power, chap.l.
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murder-inc-trials-1941.
Samuels, "Mayor and Mob:'
Samuels, "Mayor and Mob:'
Samuels, "Mayor and Mob:'
Samuels, "Mayor and Mob:'
Samuels, "Mayor and Mob:'
Von Hoffman, Citizen Cohn, 83.
"High-Titled Bank Can Hold Its Name," New York Times, June 24, 1913.
"High-Titled Bank Can Hold Its Name:'
"High-Titled Bank Can Hold Its Name:'
"High-Titled Bank Can Hold Its Name."
Beth S. Wenger, New York Jews and the Great Depression: Uncertain Promise (Syracuse
University Press, 1999), 11.
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"Joseph S. Marcus, Banker, Dies at 65;' New York Times, July 4, 1927,
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45 "B.K Marcus Dies; Led Bank of US;' New York Times, July 18, 1954,
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46 "$300,000,000 Merger of Banks Approved;' New York Times, May 10, 1929,
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47 Michael A. Whitehouse, "Paul Warburg's Crusade to Establish a Central Bank in the United
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48 "B.K Marcus Dies; Led Bank of US;' New York Times, July 18, 1954,
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49 "President of Bank Reviews Its Growth," New York Times, February 2, 1930,
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50 "$1,000,000,000 Union of Banks Completed;' New York Times, November 25, 1930,
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RageNumber=9.
51 "$1,000,000,000 Union of Banks Completed:'
52 "$1,000,000,000 Union of Banks Completed:'
53 John Olszowka et aI., America in the Thirties: America in the Twentieth Century (NY: Syracuse
University Press, 2014), 30.
54 "Bank Heads Face Contempt Action;' New York Times, February 25, 1931,
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55 Von Hoffman, Citizen Cohn, 47; Christopher, Gray, "Streetscapes: The Bank of the United
States in the Bronx;' New York Times, August 18, 1991,
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56 "Marcus Is Arrested as He Defies Steuer;' New York Times, February 21, 1931,
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57 Von Hoffman, Citizen Cohn, 45; Beth S. Wenger, New York Jews and the Great Depression:
Uncertain Promise (NY, Syracuse University Press, 1999), 14,
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58 Von Hoffman, Citizen Cohn, 45.
59 "Justice Cohn Is Honored Here;' New York Times, June 7, 1930,
httrd!timesmachine.nyjimes.com!timesmachine!1930!06!07 19614671 O.html?
p-ageNumber=9.
60 Wenger, New York Jews and the Great Depression, 11.
61 Elias, Gossip Men, 109.
62 "Marcus and Singer Must Serve Terms," New York Times, March 15, 1933,
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P-p-eals-court-up-holds-their.html.
63 Elias, Gossip Men, 109.
64 David L. Marcus, "5 Things You May Not Know About My Vile, Malicious Cousin Roy Cohn;'
The Wrap, September 27,2019, http-s:llwww.t hewrap-.com/roy-cohn-cousin-5-things-toknow!.
65 David B. Green, "1965: Pioneer of Electric Model Trains Dies;' Haaretz, September 8, 2013,
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66 "Joshua Lionel Cowen;' Jewish Virtual Library, n.d.
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68 "J.L. Cowen Settles:'
69 "Fred W. Piderit, Bank Aide, 79, Dies;' New York Times, June 20, 1961,
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70 "Joshua Lionel Cowen:'
71 Von Hoffman, Citizen Cohn, 273.
72 Von Hoffman, Citizen Cohn, 300.
73 Von Hoffman, Citizen Cohn, 52.
74 Von Hoffman, Citizen Cohn, 51.
75 Von Hoffman, Citizen Cohn, 54.
76 Von Hoffman, Citizen Cohn, 68.
77 Von Hoffman, Citizen Cohn, 70.
78 Von Hoffman, Citizen Cohn, 69.
79 Tate Delloye, liThe Godfather ofTabloid: How childhood friend of Roy Cohn and son of an
influ ential political fixer with ties to Mussolini left the CIA to start the National Enquirer with
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80 Delloye, "Godfather of Tabloid:'
81 Delloye, "Godfather ofTabloid:'
82 Tate Delloye, "Roy Cohn: New Documentary Explores the Man Who Made Donald Trump;'
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83 Delloye, "Godfather of Tabloid:'
84 Delloye, "Godfather of Tabloid:'
85 Delloye, "Godfather ofTabloid:'
86 Von Hoffman, Citizen Cohn, 82.
87 "Miss Renee Schine Becomes a Bride;' New York Times, December 29, 1950,
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88 Von Hoffman, Citizen Cohn, 169.
89 Von Hoffman, Citizen Cohn, 168-70
90 David Ta lbot, The Devil's Chessboard: Allen Dulles, the CIA, and the Rise of America's Secret
Government, First Harper Perennial edition (New York: Harper Perennial, 2016), 176.
91 Delloye, "Godfather ofTabloid:'
92 "Catholic Anti-Communism;' Crisis Magazine, March 1, 1996,
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93 Von Hoffman, Citizen Cohn, 280.
94 Von Hoffman, Citizen Cohn, 280-81.
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96 Talbot, Devil's Chessboard, 188.
97 Talbot, Devil's Chessboard, 188.
98 Talbot, Devil's Chessboard, 188.
99 Talbot, Devi/'s Chessboard, 189.
100 Talbot, Devils Chessboard, 189.
101 Talbot, Devil's Chessboard, 189.
102 Talbot, Devil's Chessboard, 186.
103 Talbot, Devil's Chessboard, 187.
104 Von Hoffman, Citizen Cohn, 188.
lOS Talbot, Devil's Chessboard, 192.
106 Von Hoffman, Citizen Cohn, 249; Joan Cook, "David W. Peck, 87, Former Justice And Court
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107 Von Hoffman, Citizen Cohn, 250.
108 Von Hoffman, Citizen Cohn, 259.
109 Von Hoffman, Citizen Cohn, 259-60.
110 Von Hoffman, Citizen Cohn, 272, 300.
111 Keith Wheeler and William Lambert, "Roy Cohn: Is He a Liar under Oath?;' LIFE, October 4,
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112 Von Hoffman, Citizen Cohn, 260.
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114 Wheeler and Lambert, "Cohn: Is He A Liar?;' 1 00.
115 Foster Hailey, "Cohn Scheduled for Trial Today;' New York Times, March 23, 1964,
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120 Von Hoffman, Citizen Cohn, 296-97.
121 Auletta, "Don't Mess with Roy Cohn:'
122 Auletta, "Don't Mess with Roy Cohn:'
123 Securities & Exchange Commission v. Fifth Ave. Coach Lines, Inc., 289 F. Supp. 3 (SD.N.Y. 1968),
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124 Securities & Exchange Commission v. Fifth Ave. Coach Lines.
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128 Von Hoffman, Citizen Cohn, 284.
129 Von Hoffman, Citizen Cohn, 284.
130 Von Hoffman, Citizen Cohn, 284-85.
131 Von Hoffman, Citizen Cohn, 285-86.
132 Von Hoffman, Citizen Cohn, 287.
133 Von Hoffman, Citizen Cohn, 331.
134 Von Hoffman, Citizen Cohn, 332.
135 Russell Sackett, Sandy Smith, and William Lambert, "The Congressman and the Hoodlum,"
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136 Von Hoffman, Citizen Cohn, 333-37.
137 Sam Roberts, "Cornelius E. Gallagher, 7-Term New Jersey Congressman, Dies at 97," New York
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147 Snider, A Special Relationship, 264-26.
148 Snider, A Special Relationship, 268.
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150 Snider, A Special Relationship, 270-71.
151 Snider, A Special Relationship, 288-89.
152 Snider, A Special Relationship, 288-89.
153 Snider, A Special Relationship, 387.
154 Snider, A Special Relationship, 387.
155 Summers and Dorri!, Honey trap, 189.
156 Peter Dale Scott, Deep Politics and the Death of JFK (University of California Press, 1996), 229-
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157 Snider, A Special Relationship, 356-59.
158 Snider, A Special Relationship, 360-63.
159 Snider, A Special Relationship, 364.
160 Snider, A Special Relationship, 364-65.
161 Snider, A Special Relationship, 366.
162 Snider, A Special Relationship, 364-66.
163 Snider, A Special Relationship, 230.
164 Robert Sherrill, "King Cohn," The Nation, August 12,2009,
http-s:/ /www.thenation.com/a rticl el arch ive/ki ng-coh nl.
165 Snider, A Special Relationship, 345-46.
166 Snider, A Special Relationship, 345-46.
167 "Broady Found Guilty In Wiretapping Case;' New York Times, December 9, 1955,
http-s:l/www.nyjimes.com/1955/12/09/archives/broady-found-guilty-in-wiretap-p-ing-casebroady-
is-guilty-in-wiretap-.html.
168 H. P Albarelli, Leslie Sharp, and Alan Kent, Coup in Dallas: The Decisive Investigation into Who
Killed JFK (Skyhorse Publishing, 2021),229-32.
169 Douglas Caddy, "Clendenin J. Ryan - Baltimore Millionaire and CIA Funder;' The Education
Forum, November 18,2007. htq~s:lleducationforum.iRbhost.com/toRic/11614-clendeni n-j:
n~an-ba lt imore-millionaire-and-cia-funder/.
170 "Home - The George Town Club;' The George Town Club, httRS:llwww.georgetownclub.orgL
171 Alan A. Block, Masters of Paradise: Organized Crime and the Internal Revenue Service in the
Bahamas (Routledge, 1991), 85-102.
172 Gary Webb, The Killing Game (New York: Seven Stories Press, 2014), 106.
173 "House Select Committee on Assassinations Appendix to Hearings;' March 1979. Vol. 9,
p.518. httRs:ljaarclibrary.orgLRublib/contents/hsca/contents hsca voI9.htm.
174 Bock, Masters of Paradise Island, 85-102.
175 "Guterma Died Taking Just One More Gamble;' Fort Lauderdale News, April 9, 1977.
176 Wheeler and Lambert, "Cohn: Is He A Liar?," 100.
177 "United States of America, Appellee, v. Virgil D. Dardi, Robert B. Gravis, Charles Rosenthal and
Charles Berman, Defendants-Appellants, 330 F.2d 316 (2d Cir. 1964)," Justia Law, March 17,
1964, httRs:lllaw.justia.com/cases/federal/aRReliate-cou rts/F2/330/31 6/116165/.
178 Hearings, Reports and Prints of the Senate Committee on Banking and Currency, 1964,
p.299,
httRS:llwww.google.com/books/edition/Hearings ReRorts and Prints of the Senat/9Tc4AAAAIAAJ
179 "US vs. Dardi :'
180 "Decisions and Reports: Volume 40;' Securities and Exchange Commision, 1960, p. 936,
httWRlay..,google.com/store/books/detaiis/United States Securities and Exchange Com
mission D?id=4z2-9QYg4X4C.
181 Jeremy Kuzmarov, Modernizing Repression: Police Training and Nation Building in the American
Century (Amherst: University of Massachusetts Press, 2012), 101 .
182 Chester L. Cooper, The Lost Crusade: America in Vietnam (New York: Dodd, Mead, 1970), 52.
183 Kuzmarov, Modernizing Repression, 101.
184 "Decisions and Reports;' 938.
185 Regarding ClC's intelligence connections: Scott, Deep Politics, 168-69; Alfred Friendly, "Four
Agencies Probe Act of Chiang's United States Contractor;' Washington Post, September 10,
1951, printed in P.11 066-67. Senate Congressional Record,
httRS:llwww.congress.gov/bound-congressional-record/1951 /09/1 O.
186 "Memorandum In The Matter ofThe Bon Ami Company: File No. 1-685," Securities and
Exchange Act Release no. 34 - 6677, 1934, p. 3, httRs:IIRlay..,google.com/store/booksMetails?
id=YhM7AQAAMAAJ.
187 J. C. Louis and Harvey Yazijian, The Cola Wars, 1 st ed (New York: Everest House, 1980), 302.
188 "Letter from Louis Mortimer Bloomfield to Carlo d'Amelio;' January 26, 1961,
ht!f;2s:ljarchive.org/details/Damello.
189 Frances Stonor Saunders, The Cultural Cold War: The CIA and the World of Arts and Letters
(New Press: Distributed by w.w. Norton & Co, 2000), 298.
190 Jonathan Marshall, "Wall Street, the Supermob and the CIA," Lobster, May 2022,
httRS:llwww.lobster-magazine.co.uk/free/lobster83/10b83-wall-street-suRermob-cia·Rdf.