One Nation Under Blackmail, by Whitney Webb

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One Nation Under Blackmail: The Sordid Union Between Intelligence and Crime that Gave Rise to Jeffrey
Epstein, Volume One.
Copyright © 2022 Whitney Webb
https://dn721605.ca.archive.org/0/items ... 20Webb.pdf

Table of Contents: Volume 1

• Publisher's Foreword
• Introduction
• 1) The Underworld
• 2) Booze and Blackmail
• 3) Organized Crime and the State of Israel
• 4) Roy Cohn’s “Favor Bank”
• 5) Shades of Gray
• 6) A Private CIA
• 7) A Killer Enterprise
• 8) Clinton Contra
• 9) High Tech Treason
• 10) Government by Blackmail: The Dark Secrets of the Reagan Era
• Documents
• Index

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PUBLISHER’S FOREWORD

PROSPERO: But you, my brace of lords, were I so minded,
I here could pluck his highness’ own upon you
And justify you traitors: at this time
I will tell no tales.

SEBASTIAN: The devil speaks in him.

– William Shakespeare, e Tempest, Act 5, Scene 1

I want something embarrassing! Something sexual! Lile boys, midgets, that sort of thing! Cows! I don’t give a goddamn!

– Sam Ellio as Kermit Newman, The Contender

“Where’s my Roy Cohn?”

– Donald Trump, New York Times, January 4, 2018

Why do folks lie, cheat and steal? Is it simply the survival of the fittest? What about our rule of law and the hoary moral codes left to us? Are they worth the paper they are printed on? Will we ever learn?

Whitney Webb takes us on a hidden history excursion – beyond the realm of the gatekeepers – delving into a deep netherworld where disgraceful actions seemingly trump noble principles. One Nation Under Blackmail: The Sordid Union Between Intelligence and Crime that Gave Rise to Jeffrey Epstein is a tour de force. A deep exposé into how the world actually works.

I will never forget my introduction to this underworld: a “talk” with my “spooky” father and his professor friend from Vanderbilt. It was a reality beyond my ken, way further than my teen-age experience. So I simply went on with growing up, but looking in the dark corners.

My education was through reading, magazine articles and books – so many books. There was much going on in the late 1960s and ’70s. My father and his friend had talked about an activity I call “CIA-Drugs,” and about “political forces,” using psychological warfare to move agendas.

It soon became apparent that within this milieu there were many players: intelligence agencies and their operatives, criminal gangs, secret societies, bag men, money launderers, financial institutions and governments.

As my studies into intelligence matters and protocols progressed, I became aware of “honey-traps” and the use of blackmail to compromise individuals and stilt honest political discourse. It floored me that there were, it appeared, federal agents running interference to some of the operations. Where was the country and the values I had been taught? How did we get here?

“It’s far more constructive to work for the church than to work for the Central Intelligence Agency. When you work for the CIA the ends justify the means,” my father was quoted in a local paper a few years before his passing.

Immoral methods skew our futures and lead to imbalance. Leaving us ruled by “rich men who are not quite respectable.”

British historian Eric Hobsbawm opined, “He [Roy Cohn] made his legal and political career in a milieu where money and power override rules and law – indeed where the ability to get, and get away with, what lesser citizens cannot, is what proves membership of an elite.”

A corrupt elite debasing our future. Trying to bully us into their depravity. With this book and others we can become educated and empowered to right our ship-of-state.

Whitney has done her homework and A Nation Under Blackmail shows with great alacrity the past actions, present situations, and future problems that we face. And must deal with in order to fulfill our founder’s aspirations, foster current needs, and foresee our children’s future.

A blackmailer believes that they are “in control,” but secrets can cut many ways, and ultimately we are in the driver’s seat. What will we do?

Onwards to the Utmost of Futures!
Peace,
R.A. “Kris” Millegan
Publisher
TrineDay
August 18, 2022

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INTRODUCTION, VOLUME 1

The July 2019 arrest of Jeffrey Epstein and his subsequent death that August brought national as well as international attention to a sex ring where certain members of the power elite sexually abused and exploited female minors and young women. Epstein’s death, officially ruled a suicide, has been treated skeptically by many, for a variety of reasons. Regardless of the real circumstances of his death, it has led to scores of Americans embracing the view that his death was both intentional and necessary to protect his powerful co-conspirators and the full extent of his covert and illegal activities.

Even if one chooses not to entertain such disconcerting possibilities, it is quite apparent that most of those who aided or enabled Epstein will never see the inside of a prison cell. Though Ghislaine Maxwell is now serving a 20 year sentence, others known to have been intimately involved in his illegal activities continue to enjoy protection from the so-called “sweetheart deal,” or plea deal that followed Epstein’s first run-in with the law for his sex trafficking activities in the mid-2000s. In addition, Ghislaine Maxwell’s recent trial saw information involving third parties redacted, leading many to believe that the public will never know the names of the “johns” or clients, who benefited from the sex trafficking activities of Epstein and Maxwell and who were potentially blackmailed by them.

Yet, for both Jeffrey Epstein and Ghislaine Maxwell, there is much more to the story. This became apparent when it emerged that Alex Acosta, then-serving as Secretary of Labor in the Trump administration, had disclosed to the Trump transition team that he had previously signed off on Epstein’s “sweetheart deal” because Epstein “had belonged to intelligence.” Acosta, then serving as US attorney for Southern Florida, had also been told by unspecified figures at the time that he needed to give Epstein a lenient sentence because of his links to “intelligence.” When Acosta was later asked if Epstein was indeed an intelligence asset in 2019, Acosta chose to neither confirm or deny the claim.

Other hints of a connection between Epstein and intelligence subsequently emerged, with reporting from a variety of sources that Epstein was affiliated with the CIA, Israeli intelligence, or both. Despite the implications and significance of these connection(s) to intelligence, most of mainstream media declined to dig deeper into these claims, instead largely focusing on the salacious aspects of the Epstein case. The narrative soon became that Epstein was an anomaly, the sole mastermind of an industrial sex trafficking enterprise and a talented con artist. Even his closest associates and benefactors, like retail billionaire Leslie Wexner, have been taken at their word that they knew nothing of Epstein’s crimes, even when there is considerable evidence to the contrary.

Indeed, it was later stated by Cindy McCain, wife of former Senator John McCain, that “we all knew what he [Epstein] was doing” at an event in January 2020, where she also claimed that authorities were “afraid” to properly apprehend him. If he was such an anomaly and a stand-alone con artist – how was he singlehandedly able to intimidate the law enforcement apparatus of an entire nation for decades? The claim that Epstein did not have powerful backers and benefactors stands on incredibly shaky ground.

Oddly enough, mainstream reporting on Epstein was once relatively open about his alleged intelligence ties, with British media reporting as early as 1992 and throughout the early 2000s that Epstein had ties to both US and Israeli intelligence. In addition, also in the early 1990s, Epstein’s name was mysteriously dropped from a major investigation into one of the largest Ponzi schemes in history even though he was labeled the mastermind of that swindle in grand jury testimony. Around the same time, subsequently released White House visitor logs show that Epstein visited the Clinton White House 17 times, accompanied on most of these visits by a different, attractive young woman. Reporting on those visitor logs was largely done by a single media outlet, Britain’s The Daily Mail, with hardly any American mainstream media outlets bothering to investigate these revelations about Epstein and a former US president.

Why was Epstein so heavily protected from justice for decades – in connection to both his sex trafficking crimes and his financial crimes? Why have the once commonly reported intelligence connections of Jeffrey Epstein now been relegated to “conspiracy theory” despite evidence to the contrary? If powerful Senators knew what Epstein was doing to young women and girls – who else knew and why wasn’t something done?

This two-volume book endeavors to show why Jeffrey Epstein was able to engage in a series of mind-boggling crimes for decades without incident. Far from being an anomaly, Epstein was one of several men who, over the past century, have engaged in sexual blackmail activities designed to obtain damaging information (i.e. “intelligence) on powerful individuals with the goal of controlling their activities and securing their compliance. Most of these individuals, including Epstein himself, have their roots in the covert world where organized crime and intelligence have intermingled and often cooperated for the better part of the last 90 years, if not longer. Perhaps most shockingly, these men are all interconnected to various degrees.

Following the formal establishment of the organized crime-intelligence in World War II through what is today remembered as Operation Underworld, the relationship between these two entities has since become so intertwined and so symbiotic that, today, it is nearly impossible to know where one ends and the other begins. As this book will show, many of the biggest scandals and events of the last century have not only been tied to these networks, but many of them also have counted with the involvement of sex traffickers and blackmailers, Epstein among them. Publicly, these men have been powerful lawyers, businessmen and lobbyists. Their more clandestine and shadowy activities, though a matter of record, are often known only to those who are well read on certain historical events or in the field of “deep politics.”

In order to understand Jeffrey Epstein and his activities in their full context, one must understand his powerful contacts and the structures that protected him. Those structures and those networks did not begin with Jeffrey Epstein and they also did not die with him. In revealing his broader milieu, and that of his past associates and clients, one is left not only with a damning indictment of Jeffrey Epstein, but a damning indictment of American institutions, particularly those involved in “national security” matters and law enforcement. We cannot properly address the crimes of Jeffrey Epstein, nor prevent them being committed by others in the future, unless we grapple with the covert power structures that have long wielded blackmail, bribes and assassinations as their weapons of choice to corrupt and control public institutions while manipulating and looting the public.

Jeffrey Epstein was not an anomaly and his activities represent just the tip of the veritable iceberg.

Whitney Webb, 8/14/22

***

“Who are these people? They are the group that is popularly called the Enterprise. They are in and outside [the] CIA. They are mostly Right Wing Republicans, but you will find a mix of Democrats, mercenaries, ex officio Mafia and opportunists within the group. They are CEOs, they are bankers, they are presidents, they own airlines, they own national television networks. They own six of the seven video documentary companies of Washington, DC and they do not give a damn about the law or the Constitution or the Congress or the Oversight committees except as something to be subverted and manipulated and lied to.

They abhor sunlight and love darkness. They deal in innuendo and character assassination, and planted stories, the incomplete thought and sentence. They burn and shred files if caught, they commit perjury, and when caught they have guaranteed sinecures with large US corporations.

If you let them, they will take over not only [the] CIA but the entire government and the world, cutting off dissent, free speech, a free media, and they will cut a deal with anyone, from [the] Mafia to Saddam Hussein, if it means more power and money. They stole $600 billion from the S & L’s and then diverted our attention to the Iraqis. They are ripping off America at a rate never before seen in history. They flooded our country with drugs from Central America during the 1980s, cut deals with Haro in Mexico, Noriega in Panama, and the Medillin and Cali cartels, and Castro, and recently the Red Mafia in the KGB.

They ruin their detractors and they fear the truth. If they can, they will blackmail you. Sex, drugs, deals, whatever it takes.”

–Former CIA officer and Iran-Contra whistleblower Bruce Hemmings, circa 1990

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Part 1 of 3

CHAPTER 1. THE UNDERWORLD OF SPIES AND CROOKS

At 2:30 in the afternoon on February 9th, 1942, a fire broke out on-board the Normandie, a ship that was then in the process of being converted into a troop transporter in New York City’s harbor. As the flames roared, winter winds fanned the flames, spiraling the fire up, and then down onto the ship’s top decks. Within hours, the Normandie began to lean to her port side, weighed down by the water that was being dumped onto the boat by fire crews. Soon, the ship capsized and an expensive, unprecedented salvage operation was mounted. Despite these efforts, repairing the ship was soon found to be too complicated and too costly, and the Normandie was scrapped in 1946.

Investigations into the destruction of the Normandie quickly revealed that the cause of the disaster had been incompetence and carelessness. Yet, nevertheless, rumors grew that it had been the work of German saboteurs, who were intent on disrupting America’s early war efforts. Proponents of these theories argued that the alleged saboteurs sought to break down the country’s logistical capabilities through attacks in ports and harbors as well as factories and other strategic, industrial locations. William B. Herlands, the then-New York Commissioner of Investigation, summed up the spirit of the times when he said, “We are faced with a grave national emergency.… A blackout was imposed over the … waterfront area within the Third Naval district, which included New York and New Jersey. Many of our ships were being sunk by enemy submarines off the Atlantic Coast … and the outcome of the war hung in the balance.”1

Management and regulation of these critical harbors and coastlines was the responsibility of the Office of Naval Intelligence (ONI). An ONI inquiry was opened in May 1942 into potential saboteurs and Nazi agents operating in the ports and the possibility of U-boat movements off the east coast. The man tasked with overseeing this inquiry was C. Radcliff Haffendon.2 Several of the agents assigned to work under Haffendon had previously worked with Thomas E. Dewey, the US State Attorney who later served as governor of New York. Dewey was best known for his prosecution of organized crime, and through these contacts, Haffendon learned of the role played by gangsters and other criminal elements on the New York City waterfront. Dewey’s chief of staff, attorney Frank Hogan, suggested to Haffendon and the ONI that they speak with a man named Joseph “Joe Socks” Lanza.

Lanza was officially a “business agent for the United Seafood Workers Union.” He was also a mobster in his own right and was known as the “rackets boss of the Fulton Fish Market … in downtown New York City.”3 Yet, compared to the stature of other criminal figures in the city, Lanza was a small-fry, and he knew it. As a result, he ended up telling the ONI that they would have better luck higher up the food chain. He suggested either Meyer Lansky, who controlled the longshoreman’s union, or Frank Costello, a gambling figure with numerous interests throughout the waterfront. But to get to them, Lanza told Haffendon, he would need to first speak to Charles “Lucky” Luciano.

Luciano, at the time, was locked away in prison, having been put there by Thomas Dewey. A delicate series of negotiations were subsequently launched in what is now known as “Operation Underworld.” This operation, which the government was forced to reluctantly acknowledge after decades of public denials, involved the recruitment of high-level organized crime figures for work with American intelligence services, justified by war-time necessity. Not long after Operation Underworld had been given the go-ahead, Luciano agreed to the ONI’s requests, and his prison cell soon became a hub for meetings between him and his criminal associates, meetings in which they would coordinate counter-intelligence activities with the Navy.

Despite Operation Underworld’s initial and relatively narrow objectives, the scope of the operation organically expanded. Before long, Luciano and his colleagues – Meyer Lansky, chief among them – were helping the ONI cultivate intelligence for the Allied invasion of Sicily. Lower ranking mob figures and immigrants were frequently brought to Haffendon’s offices for questioning. Names and contact information for friendly Sicilians, many of whom were Mafia figures, were provided to ONI agents for use in the military campaign. While the resulting collaborations between the Mafia and the military on the beaches and in the villages of Sicily have slipped into legend, the legacy of Operation Underworld has endured and undeniably forever altered the United States of America, and beyond. Indeed, Operation Underworld was the beginning of the creation of a new underworld entirely, one built on the cooperation, if not outright symbiosis, between organized crime and American intelligence.

SHADOWY ALLIANCES

Lucky Luciano was born in Sicily in 1897 and arrived on American shores in 1906. At a young age, he formed his own gang, which offered protection to Jewish immigrants from Italian and Irish organized crime elements in exchange for small fees. This protection, unsurprisingly, was tantamount to extortion, and the money he accrued allowed him to begin expanding into other rackets – including, notably, prostitution. Early on, he met and formed an alliance with another young gangster named Frank Costello, an immigrant from Calabria, Italy. Together, the two consolidated their power by taking control of the numerous environs now considered typical of organized crime: prostitution, narcotics, and even organized labor in New York City’s docks.

As their business expanded, so too did their revenue. Soon, Luciano and his cohorts were being propelled to the heights of power in New York City. Thomas Dewey once commented that Luciano’s “business was far-flung and brought in a colossal revenue. This was estimated to be far, far in excess of $12 million a year.”4 Key to Luciano and Costello’s operation was the fact that it had overcome the traditional bifurcation of organized crime into ethnic enclaves. For the first time, in Luciano’s growing criminal empire, Italian, Jewish, and Irish criminal networks intermingled and cooperated with one another. However, this early cooperation lacked the cohesion and integration that the networks born out of Luciano’s and Costello’s enterprise would develop in the years to come.

Joining Luciano and Costello in their criminal enterprise was Meyer Lansky and his close friend, Benjamin “Bugsy” Siegel. Lansky was well-connected in Jewish mob circles, and he, along with Siegel, had amassed significant wealth during the Prohibition era. Lansky, whose long shadow is cast across the entire history of organized crime in the twentieth century, was something of a visionary. Various accounts paint him as the intellectual architect behind the multi-ethnic organized crime model that Luciano successfully pursued. Lansky was also instrumental in bringing mob groups into the world of gambling, helping set up casinos in the Caribbean that would be utilized to wash the money generated by their various vices and rackets. Perhaps most important of all was that Lansky had also helped develop the use of a complex banking network, which he adopted in an effort to avoid the fate of Al Capone. After all, Capone had not been taken down not for murder or extortion, but for tax evasion.

This Luciano-Costello-Lansky-Siegel alliance was the basis of what subsequently became known as the National Crime Syndicate. Far from the well-organized image of the Mafia often promoted by the media, the National Crime Syndicate operated loosely at best – and, according to some commentators, did not actually exist in any meaningful way. Such arguments might be going a step too far, although they are worth considering. The National Crime Syndicate might be best understood as a social network – a sprawling, faction-filled web of associations and organizations that either collaborated or competed, depending on the situation or the spoils.

In 1936, this emerging crime network took what, at first glance, appeared to be a major blow following the arrest and successful prosecution of Luciano by Thomas E. Dewey in a spectacular, if not sensational, trial. Luciano’s apparent downfall came via an assault on New York City’s prostitution rackets, which his organization firmly controlled. As Alfred McCoy summarizes, “Dewey’s investigators felt that the forced prostitution charge would be more likely to offend public sensibilities and secure a conviction.”5 A handful of prostitutes who worked in Luciano’s brothels testified against him, and a New York court quickly sentenced the gangster “to a thirty-to-fifty year jail term.”

Dewey’s role in this affair is quite interesting. Six years later, when he ran to secure the presidential nomination for the Republican Party, he joined forces with John Foster Dulles, the brother of Allen Dulles – best known for his role as the first civilian head of the CIA in the early years of the Cold War. Dulles, a member of the “internationalist” camp of American politics that typified the attitudes of the elite “Eastern Establishment,” impressed upon Dewey the importance overcoming the isolationist factions of the Republican Party.6,7 What Dulles got in exchange for his steering of Dewey in pursuit of political power was his own rise through the ranks of the party, ultimately culminating in his service as President Dwight D. Eisenhower’s Secretary of State.

Even more curious was an investment that Dewey made, during the 1950s, in an entity called the Mary Carter Paint Company, later renamed Resorts International. Mary Carter was controlled by the Crosby family, and its operations were overseen by the most practical-minded of the family’s sons, James Crosby. Mary Carter was deeply tied to organized crime networks.8,9 It worked closely in developing businesses in the Bahamas, hand-in-hand with a number of Meyer Lansky frontmen, while James’ brother, Peter Crosby, was a notorious confidence man with an impressive roster of criminal contacts. It had also been widely rumored that Mary Carter was a CIA front company.10

THE OSS

Lurking in the background of Operation Underworld, which had seen the ONI directly recruit Luciano, was the Office of Strategic Services (OSS), the wartime forerunner to the CIA and America’s first robust national intelligence organization. The precise role that the OSS played in the affair isn’t exactly clear. According to George White, a notorious agent of the Federal Bureau of Narcotics who had been recruited into the OSS, he had been propositioned by an organized crime associate to enlist Luciano in exchange for a pardon – but this was a bridge too far. An alliance between the OSS and “a person of Luciano’s reputation ‘would be a very naive way of doing business’ … White maintained that he felt it was outrageous to entertain … [the] proposition, ‘even for the OSS’ who were willing to do almost anything.”11

White would make these statements in the course of Federal testimony, and, in all likelihood, he was lying to protect the OSS. According to Richard Harris Smith, an historian of the OSS, Earl Brennan, an OSS officer in Italy, was kept in the loop regarding negotiations between Luciano and the ONI.12 Meanwhile, Assistant District Attorney Murray Gurfein, who handled the legal end of the Luciano negotiations, subsequently went to Europe to serve as a colonel in the OSS.13

OSS was many things, operating in many different theaters. In Europe, it ran a fairly unsuccessful paramilitary campaign. However, in the China-Burma-India theater, its military operations achieved remarkable results. When it came to spycraft, its supporters gushed with praise, while its detractors regarded the tales later woven by its veterans as worthy of skepticism. The OSS was frequently – and accurately – seen as a social club. While its ranks did boast a great many military officers and figures from other government agencies like the FBI and the FBN, its leadership and higher-ranking administrative posts tended to be secured by the sons of the country’s wealthiest elite. In London, Madrid, Geneva, Paris and elsewhere, posts were held by members of the Mellon family of Pittsburgh, the family behind the Gulf Oil fortune. Heirs of the Morgan family also secured positions within the agency, as did members of the DuPont and the Vanderbilt families.

“Only the Rockefellers were conspicuously absent” from the OSS, writes Richard Harris Smith, adding that “Nelson [Rockefeller] headed his own agency, the Coordinator of Inter-American Affairs.”13 David Rockefeller, Nelson’s brother, also reportedly ran his own intelligence apparatus during the war.14

The agency itself was something of brainchild – at least partially – of General William J. Donovan, a prominent New York City anti-trust lawyer and veteran of World War I. Along with figures like Dewey and Dulles, Donovan was the consummate “Eastern Establishment” insider. He maintained a deep preoccupation with organization and rationalization, which filtered into his work defending the trusts and combines that dotted the corporate landscape of his day. He was also a firm internationalist when it came to his political outlook. During the inter-war years, Donovan had acted as an agent for various corporate interests, and had even traveled to Russia on behalf of the Morgans to collect information on the developments of the Bolshevik Revolution.15

In the course of his wartime intelligence work, Donovan was first appointed by President Roosevelt to head the Office of the Coordinator of Information (COI), which was intended to help coordinate the scattered intelligence outfits and military organizations that communicated infrequently and cooperated even less. COI was the seed from which the OSS would later spring. Under Donovan’s direction, it became a clearinghouse for military and political propaganda. This was in no small part thanks to Donovan’s close friend, a British intelligence operative named William Stephenson.

Stephenson was the wartime head of a British intelligence unit in the United States, headquartered in New York City and known as the British Security Coordination (BSC). He reported to Stewart Menzies, who was then serving as the head of MI6. Menzies had tasked Stephenson with “establish[ing] relations on the highest possible level between the British SIS [the Secret Intelligence Service, another name for MI6] and the U.S. Federal Bureau of Investigation.”16 Stephenson and the BSC operated from an office located in Rockefeller Center’s International Building, which was also the home of numerous, other BSC front organizations. Stephenson also worked closely with other British intelligence agencies, including MI6 itself and the Special Operations Executive (SOE), which had begun its life as Section D of MI6.

In agreement with Menzies’ mandate, Stephenson developed a close working relationship with J. Edgar Hoover, who seemed to be enthusiastic about being a liaison to British intelligence on matters concerning the war in Europe (at this stage, the US had yet to enter the conflict). Reportedly, the BSC “provided the FBI with over 100,000 confidential reports,” while Hoover kept the British in the loop with American reports on German naval movements and the like.17 The relationship between Hoover and Stephenson would ultimately break down by 1941. Soon after, Stephenson began to cultivate William Donovan, who increasingly challenged Hoover’s position as the sole conduit between the Americans and the British. When Donovan was appointed by Roosevelt as the Coordinator of Information – and subsequently formed the OSS – an intense bureaucratic struggle erupted between Hoover and his rivals. As will be discussed in greater detail in the next chapter, this struggle allegedly led Donovan to coordinate with organized crime kingpins, namely Meyer Lansky, to blackmail Hoover in an effort to bring him to heel.

Stephenson did more than simply cultivate Donovan. In 1940, he reported back to his handlers in England that “Thre is no doubt we can achieve infinitely more through Donovan than through any other individual.… He is very receptive … and can be trusted to represent our needs in the right quarters and in the right way in the U.S.A.”18 Donovan’s COI and OSS were, in all actuality, the offspring of these British-led efforts, and a great deal of the decisions Donovan made were influenced by figures tied to Stephenson’s BSC. Before the COI was up and running, for example, Donovan conferred closely with Robert Sherwood, a playwright, ardent interventionist and close confidant of President Roosevelt. “On June 16th, 1941,” writes Thomas Mahl, “Sherwood sent to Donovan a list of people he thought he could trust, ‘for the work we discussed … yesterday evening at your home’.”19 At the time, Sherwood was working closely with the BSC – even sending them copies of speeches he had written for the president prior to Roosevelt receiving them.20

As efforts were undertaken to get the American intelligence apparatus up and running, the BSC undertook a propaganda campaign aimed at garnering support for such an institution. Mahl, in his book Desperate Deception, shows how BSC assets seeded the idea throughout the mass media, which in turn was circulated up to the heights of political power. One characteristic incident took place in May 1941, just a month prior to Donovan’s meeting with Sherwood. It was on 9The of that May that:

Vincent Astor, FDR’s friend and New York area coordinator of intelligence, sent the president a clipping from the New York Herald Tribune that was probably a plant to build the consensus for voices calling for the plan British intelligence wanted. The Herald Tribune … was BSC’s favorite outlet for planted articles. Moreover, the putative author, George Fieling Eliot, was a devoted British sympathizer, one of the most influential people in the BSC front Fight for Freedom, and a favorite vehicle for planted articles. Citing the threat from fifth columnists and enemy agents, Eliot pointed out with alarm at the lack of a coordinator for the FBI, ONI, and G-2 intelligence.21

The idea of a “fifth column” was a prime component of BSC propaganda, and would later be adopted by the OSS itself. It was used to attack isolationist holdouts against American entry into the war, and was also used to generate fear and create an atmosphere of distrust among the general public. The term originated during the course of the early phase of the Spanish Civil War of the 1930s, and was used to describe something like a domestic military-in-waiting. The fifth column was purported to be composed of enemy agents and their sympathizers, with a mandate towards sabotage and other violent activities. According to Mahl, one of the strongest promoters of the notion of a Nazi fifth column active in America was a Chicago journalist and close associate of Donovan named Edgar Ansel Mowrer – who was subsequently identified as an asset of British intelligence.22

The fifth column, however, was simply an exaggerated threat. Axis sabotage efforts within the United States did occur, but were limited and ultimately ineffectual. Yet, this reality didn’t matter to the BSC and its American allies, as the promotion of fifth column fears had a legitimizing function for their activities. It formed the very justification and popular base of support for the creation and expansion of the emerging, organized intelligence apparatus.

It also spawned events like Operation Underworld. after all, it was the specter of fifth column activity that had first prompted the collaboration between the ONI and organized crime elements. Even more incredibly, it seems that the legitimization gained by intelligence services through BSC propaganda ultimately benefited these criminal networks as well. At the war’s end, naval intelligence began a campaign to have Luciano released from prison – and at the beginning of 1946, the very man who had put Luciano away, Thomas Dewey, commuted the mobster’s sentence in exchange for his deportation to Italy. In the year or two that followed, numerous other gangsters – perhaps as many as a hundred – were deported and joined him.

Luciano’s deportation was the beginning of an effort to cement in place a powerful organized crime network that was transnational in scope and wedded to the American intelligence services. Indeed, even though Luciano was no longer physically in the United States, he and his ilk continued to guide organized criminal activities from abroad while also establishing new rackets during their exile in the “Old World.” Deported alongside Luciano, for instance, was Frank Coppola, the powerful Detroit mob boss who had been something of a mentor to Jimmy Hoffa, the mob-linked head of the Teamsters union (the use of the Teamsters’ pension fund for organized crime-linked financing recurs throughout this book). By the 1960s, Hoffa and the Teamsters were working closely alongside the CIA, particularly on efforts to assassinate Fidel Castro, who had seized many of the mob’s casinos during the course of the Cuban revolution. Coppola himself was linked to American intelligence: he “was said to have been behind a 1947 May Day massacre in Sicily, allegedly financed by former OSS chief William Donovan, in which eight people were killed and thirty-three wounded; 498 people, mostly left-wingers, were killed in 1948 alone.”23

Also deported was Silvestro “Silver Dollar Sam” Carolla, a Sicily-born mobster who had arrived in New Orleans, Louisiana, in the early 1900s and had become the city’s boss. He was particularly close to the interests of New York City organized crime. In the 1930s, Carolla had worked with Costello and Luciano to provide New Orleans with slot machines under the watchful eye of their ally, Huey Long. The gambling operation was so successful that it soon attracted the attention of Lansky, and plans were put in motion to establish “centers of communication and money laundering operations to be used by the underworld, on a national scale, in New Orleans.”24 This included the opening of “three big Las Vegas-style gambling casinos” across Louisiana, and the introduction of a new, rising star in the underworld into this partnership.

That rising star was Carlos Marcello. Soon, Marcello was managing the whole of the Louisiana casino operation. When Carolla was deported to Sicily, Marcello was tapped to take his place – and so began the reign of one of the most powerful crime bosses of the twentieth century. “…[I]t was said,” wrote John Davis in his book Mafia Kingfish, “Frank Costello sent his blessing from New York, and Sam Carolla sent word from Palermo that he approved Carlos’ selection as caretakerboss until he, Silver Dollar Sam, returned from exile.”25

In Italy, Carolla linked up with Luciano in developing what was reported by American law enforcement to be a large-scale drug network. As will be discussed in Chapter 3, this network spanned the Middle East, Europe, and the United States, and one particularly well-oiled pipeline of this network – one that connected Lebanon to Sicily to Marseilles – was infamously known as the “French Connection.” Curiously, Carolla and Luciano turned up in Mexico in 1948 to oversee the development of a drug smuggling operation in that country. While Mexico had its own domestic drug production, it was also a key transshipment point for the flow of heroin, refined from opium produced in the East. Here, we again find the fingerprints of cooperation between intelligence services and organized crime.

THE DRUG CONNECTION AND “OPERATION X”

The story of the China’s Green Gang is complicated, partially due to the mixing of fact with rumor and legend. Yet, it is undeniable that their rise was a consequence of the rapid transformations that shook Chinese society in the early twentieth century. However, the Green gang itself began long before the twentieth century dawned, originating as a secret society with roots stretching back to Luoism, a folk religion that followed the teachings of Buddhist mystic Luo Menghong. During the late 1700s, this particular branch of Luoism had become a powerful force among boatmen whose trade was the transport of grain and other foodstuffs. Fearful of their growing power, authorities stepped in to suppress this network, driving it underground. Once bitterly ensconced in the margins of society, these Luoists began engaging in smuggling and formed alliances with other smuggling groups. Soon, they consolidated their power and became a formidable force in the world of crime.

Under the leadership of Du Yuesheng, the Green Gang helped bring to power the Kuomintang (KMT), later known as the Nationalist Chinese, under the direction of Chiang Kai-Shek.26 Chiang himself was not a member of the Green Gang, but his political mentor and protector, General Ch’en Ch’i-mei, had been. Between the 1920s and 1930s, the Green Gang was fully integrated with the government of Shanghai, and became a primary source of power for the KMT. They “relied on the Green Gang to conduct counter-espionage activities and gather political intelligence,” and called upon the resources of the organization to suppress trade unionists and communists.27

The Green Gang financed its activities through the cultivation and sale of opium – an activity that was fully sanctioned by Chiang and the KMT. Prior to the KMT’s rise to power, Chinese opium production was unorganized, distributed among many different warring figures. Under Chiang, however, a “suppression” was carried out with the ostensible goal of wiping out the opium trade in the name of public health. Behind the scenes, however, the KMT was doing quite the opposite: the “suppression” of opium production was actually an integrated effort to centralize it, placing production, distribution and ultimately control of the substance in the hands of a joint KMT-Green Gang monopoly.28

Support for the KMT opium monopoly came from Western modernizers – including the Rockefeller Foundation, which had set up shop in China during the 1910s with the creation of the China Medical Board.29 Through this apparatus, the Rockefeller Foundation undertook efforts to promote “modern science,” develop medical education programs, and set up hospitals. It is likely that the foundation’s support for opium monopolization was intricately bound up with their health crusade, since opium had important, wide ranging medicinal applications.

At the same time, it was also part of a larger tendency among internationalists like the Rockefellers to seek the regulation and control of the global drug trade. after the First World War, the nascent League of Nations formed an Advisory Committee on the Traffic of Opium and Other Dangerous Drugs. It worked closely with the Rockefeller Foundation’s International health Board, the “parent” of the China Medical Board. The overarching imperative of the League’s efforts for global drug regulation was to rationalize the production of opium and other precursors and to consolidate drug refining and distribution within a series of select major pharmaceutical corporations.

Under Chiang’s leadership, China simultaneously kowtowed to the League’s initiatives while using the monopolization drive to cement itself at the center of drug production for both the criminal underworld and the “legitimate” overworld. A full-blown narco-state was in the process of being formed, as opium cultivation came to be the central focus of the government’s revenue-raising programs. As Jonathan Marshall noted:

“In the central provinces of China, especially in Hubei and Hunan, nearly every government organization has come to depend on opium revenue for maintenance,” observed one expert. “Even law courts, Tangpus (Kuomintang organizations), and schools are no exception.” Thus in one locality, authorities charged one picul of opium $320 for general taxes, $32 for Communist suppression, $3.20 for national revenue, $1.50 for the Chamber of Commerce, $2.50 for Special Goods (opium) Association fees, $2.50 for the Hsih-tsun Girl’s School, and $7.00 for protection fees. Later, highway maintenance and more school taxes were added. When the opium finally reached Hankou, monopoly authorities added another $920 tax. The original cost of the opium was only $400.30

It was in this context that American organized crime figures arrived on China’s shores and began to organize an intensely lucrative global narcotics trading network. Among the first was Arnold Rothstein, who acted as a mentor to Lansky, Luciano, and Costello. He dispatched a series of frontmen to China: Sidney Sta__er, Jacob Katzenberg, and George Uffner.31 Uffner would later be described by Federal investigators as a long-time friend of Costello, while Katzenberg was a high-level figure in New York City’s Jewish crime syndicates. These syndicates, according to Alfred McCoy, “controlled much of New York’s heroin distribution.” Katzenberg – himself a Lansky flunky as much as a Rothstein frontman – was involved with a secret heroin processing laboratory in the city, which was refining opium flowing from Asia.32

Hans Derks, in his encyclopedic History of the Opium Problem: The Assault on the East, 1600-1950, suggests that the connections between American organized crime and the KMT/Green Gang-dominated Chinese opium trade more than likely involved the complicity of Western – predominantly Anglo-American – economic interests in the region.33 He singles out in particular the powerful Sassoon family.

Nicknamed the “Rothschilds of the East,” the Sassoons had emerged as economic administrators in Iraq before organizing one of the dominant opium trading complexes in the East. It is said, writes Derks, “that ‘one fifth of all opium brought into China was shipped on the Sassoon fleet.’ Thanks to opium they became not only the wealthiest family in India, but also the largest real estate dealers in Shanghai.”34 The family also became integrated into the world of oil: they invested heavily, at various times, in Britain’s Burmah Oil and the Anglo- Iranian Oil Company (a subsidiary of Burmah that eventually became British Petroleum), among others.

During the 1800s, the Sassoons competed for dominance of the opium trade with Jardine-Matheson, one of the great Anglo-Hong Kong trading houses that has been firmly controlled by the prominent Keswick family. Over time, the interests of the Sassoons and the Keswicks intermingled and became part of a vast network winding its way through Hong Kong, Shanghai, and elsewhere. This is by no means ancient history: as late as 2013, the Financial Times reported that Lord James Sassoon, having just finished a stint serving as the Commercial Secretary to the Treasury in the government of UK Prime Minister David Cameron, became an executive director of the Jardine-Matheson board.35

These dynastic-corporate structures not only influenced the shape of the international drug trade during the twentieth century, but also the evolution of Western intelligence services during and after World War II. Take, for example, the offspring of Henry Keswick, who served as one of the most powerful heads of Jardine Matheson and the controller of numerous affiliated entities (such as the Hong Kong and Shanghai Banking Corporation, the Hong Kong & Whampoa Company, and the Shanghai Municipal Council). Two of Henry’s sons, John Henry Keswick and William Johnston “Tony” Keswick, served in the Chinese theater as part of the UK’s Special Operations Executive. In addition to the SOE, John Henry Keswick served as the personal aide to Lord Mountbatten, the Supreme Allied Commander of the Southern Asia theater.36

Tony Keswick, meanwhile, crossed paths with Federal Bureau of Narcotics (FBN) veteran and OSS operative Garland Williams. When the OSS was still being organized and efforts were underway to expand its paramilitary capacities, Williams was dispatched by Preston Goodfellow – “a former Hearst executive and publisher of Brooklyn Eagle” who had become William Donovan’s special assistant – to meet with the SOE officer. “After meeting the British spymaster Keswick,” writes Douglas Valentine, “Williams returned to Washington with the SOE’s training manuals and helped establish OSS training schools in Maryland and Virginia.”37

After the war came to an end, Tony Keswick returned to the world of corporate affairs, taking up a position running one of the family’s correspondent companies in London. He also served, for a time, as a governor of the Hudson’s Bay Company in Canada. As discussed in the next chapter, the Hudson’s Bay Company was central to the rise of the Bronfman family, who have long straddled the murky line between “legitimate” corporate enterprises and the criminal underworld. In turn, the Bronfmans, as will be illustrated at length in this book, would be important to the rise of the network that later enabled the illicit activities of Jeffrey Epstein.

Through his acquisition of the SOE manuals from Keswick, Garland Williams played an essential role that paralleled – and was almost certainly framed by – the higher level cooperation between William Donovan and William Stephenson. At the same time, Williams appears to have operated at the intersection of the American intelligence services, still in their infancy, and the networks of American organized crime.

In his book Deep Politics and the Death of JFK, Peter Dale Scott theorizes that there existed a formation that he provisionally dubs “Operation X.” Williams, and other veterans of the FBN that were brought into the OSS and the CIA, are identified as players in this apparatus:

…the intelligence-mob collaboration established with Operation Underworld did not end after World War II. On the contrary, post-war narcotics operations overseas were subordinated to anti-Communist activities; and they were used as a cover for ongoing use of mob assets, above all drug traffickers, around the world. In developing these post-war mob contacts, White and his FBN associates, notably his former supervisor Garland Williams, and his protégé Charles Siragusa, even while formally back in the FBN hierarchy, ‘functioned as a counterintelligence unit, attached to the CIA and, at times, the Army.’… In the 1950s and 1960s it would appear that the FBN systematically subordinated the prosecution of drug cases to a second, hidden agenda, the use of traffickers as agents against communism.38

One example that Scott cites is the “selective arrests made by George White in a 1959 heroin case involving the anti-Communist (and pro-Kuomintang) Hip Sing tong or gang.”39 White, an agent for the FBN and OSS who was a contractor for the CIA after the war, had busted a heroin ring operating out of San Francisco that tracked back to these pro-KMT gangster elements – and then subsequently identified the heroin as originating from Chinese Communists.40 Interestingly, White himself had a history with the Hip Sing tongs. “In 1936 he infiltrated the notorious Hip Sing Tong brotherhood of Seattle by masquerading as a drug dealer,” leading to a massive sting operation that nabbed some thirty drug smugglers and their associates.41

It is worth saying a bit more about George White, who was no stranger to courting the services of organized crime figures to bolster the early American intelligence apparatus. The research carried out by the late Hank Albarelli has shown that White cultivated a protege named Pierre Laffite, who he had recruited into the CIA as a “special employee” in June 1952.42 Twenty years prior, Lafitte worked in France for Jean Voyatzis, “the greatest importer of manufactured Chinese opium into Europe” and a figure of considerable interest to the FBN.43 Later, Lafitte turned up in Cuba in the company of Amleto Battisti y Lora, a Corsican expat who had partnered with Meyer Lansky in a Havana hotel. Battisti, according to a 1955 FBI memo, was “for many years … known unofficially as the numbers king of Havana.”44

When White brought Lafitte to the CIA, the FBN agent was himself being recruited by Sidney Gottlieb, a chemist who was working at the Agency’s Office of Technical Service. There, Gottlieb oversaw the CIA’s research into potential “truth drugs,” which in time expanded into a sweeping inquiry that dealt with the effects of drugs, shock therapy and sensory deprivation, hypnosis and even more esoteric currents on the human mind. The most famous of these programs, MK-ULTRA, saw the CIA become the largest consumer of LSD, which it used to experiment on witting and unwitting subjects. The subjects included soldiers, patients in psychiatric hospitals, prisoners (sometimes organized crime figures), and private citizens. Under Gottlieb’s directions, CIA-run “safehouses” were established in New York City and San Francisco, where unsuspecting people were dosed with hallucinogenic substances while being monitored from behind two-way mirrors.

Gottlieb was impressed by White’s street smarts and his inclinations towards the other side of the law – traits that were necessary for the covert drug program. As one of Gottlieb’s Agency employees later stated, “We were Ivy League, white middle class.… We were naive, totally naive about this, and he felt pretty expert. He knew the whores, the pimps, the people who brought in the drugs.… He was a pretty wild man.”45 Under the alias of “Morgan Hall,” White maintained a safehouse in Greenwich Village, New York City, where he supplied unsuspecting people with LSD and other substances. In order to lure people into his web, he deployed false life stories – “He posed alternatively as a merchant seaman or a bohemian artist, and consorted with a vast array of underworld characters, all of whom were involved in vice, including drugs, prostitution, gambling and pornography.”46

In 1955, Harry J. Anslinger, the commissioner of the FBN, transferred White to San Francisco to fill a vacant post as the FBN district supervisor for the city. This was by no means the end of his work with Gottlieb and the CIA. Instead, he was granted control of MK-ULTRA Subproject 42 – or, as White called it, “Operation Midnight Climax.” Midnight Climax involved a safehouse, much like the one set up in New York City, which was then decked out with electronic surveillance equipment. Prostitutes were then enlisted, who would lure unsuspecting clients back to the “pad,” where they would then be slipped LSD. John Gittinger, a Harvard psychologist who was on the CIA payroll – best known perhaps for developing the Personality Assessment System – later admitted in Congressional testimony that the Agency “was interested in the combination of certain drugs with sex acts. We looked at the various pleasure positions used by prostitutes and others.… Some of the women, the professionals, we used, were very adept at this practice.”47

White wasn’t alone in obscuring the role of the KMT in the drug trade. This was also the modus operandi of Harry Anslinger, the FBN commissioner who served as boss to both George White and Garland Williams. Although Anslinger – like Donovan – was a bitter enemy of J. Edgar Hoover, he rode the rising tide of McCarthyism in the US, and identified China as the number one threat to public order.48 The Chinese Communist Party, he claimed in the media and in official FBN reports, was over-seeing vast opium fields and had trained thousands of agents to distribute heroin within the West. Per Anslinger, Chinese opium production totaled “more than 4,000 tons … a year,” with the “profits from the smuggling [being] used to finance the activities of the Communist Party and the obtain strategic raw materials.”49

Importantly, Anslinger did not have any agents located in Asia in the post-war years, with FBN posting taking place at a fairly late date in 1962.

The claims made by Anslinger in the 1950s were sourced from intelligence provided by the KMT itself and, in the early years, by the intelligence apparatus of General Douglas MacArthur’s military command in post-war Japan. Overseeing this intelligence web was MacArthur’s protege, a fascist sympathizer named General Charles Willoughby. Willoughby, as will be discussed in Chapter 5, would later become a player in the so-called China Lobby, a domestic political pressure network that supported the KMT and hardline Cold War politics.

It is doubtful that the misdirection being deployed by Anslinger, White, and others in their milieu was for propagandistic purposes alone. Scott’s “Operation X” thesis suggests a dual function. First, it bolstered Cold War propaganda efforts, which roughly followed the same template as the “fifth column” propaganda of the OSS during World War II. Second, it helped hide the roles of certain individuals, organizations, and networks that worked in tandem with Western intelligence services, militaries, governments, and businesses in the global drug trade. During this period, investigations into organized crime in America were soft-pedaled, if they took place at all, in part thanks to coercion and blackmail, particularly the blackmailing of FBI director J. Edgar Hoover. This also worked to obscure the role of the KMT in the drug trade due to the historical unity of American organized crime with Asian drug traffickers, forged in the inter-war period.

There is the stark possibility that this unity was maintained, well into the postwar epoch, through the efforts of American intelligence services themselves. This would result from the long-term effects of the OSS apparatus that had been set up in the China-India-Burma theater during the war. That apparatus had been concentrated around a powerful unit called Detachment 101 (which, incidentally, had been set up with the aid of Garland Williams). Many of the most notorious intelligence operatives and soldiers who dotted the landscape of the late 20th century can trace their roots back to this OSS theater – and many of them will appear throughout this book. Those who served there included E. Howard Hunt, later a CIA coup-master who achieved infamy during Watergate. Another was John Singlaub, a major player in the Iran-Contra affair. There was also Paul Helliwell, soon to become one of the architects of convoluted shadow banking strategies and a primary node between the worlds of intelligence and organized crime.

In 1943, William R. Peers – who would later lead the CIA’s first training program – became the head of OSS Detachment 101 after his predecessor, Carl F. Ei__er, was injured. Peers subsequently became the head of all OSS operations in the China-Burma-India theater, and personally oversaw commando operations carried out by KMT troops against Chinese Communist forces. Peers later rejected on his OSS years in an autobiography and, while discussing payment issues needed to finance the OSS’ operations in Asia, made a startling disclosure:

Simply stated, paper currency and even silver were often useless, as there was nothing to buy with money; opium, however, was the form of payment everybody used. Not to use it as a means of barter would spell an end to our operations. Opium was available to agents who used it for a number of reasons, from obtaining information to buying their own escape. Any indignation felt was removed by the difficulty of the effort ahead. If opium could be useful in achieving victory, the pattern was clear. We would use opium.50

The OSS activities in Burma would lay the groundwork for the country to subsequently act as an essential node in early Cold War activities against Communist elements in Asia. Importantly, after Chinese Communists drove the KMT out of the mainland and into Taiwan, Burma became one of their main outposts. There, the CIA organized a secret army with prospective plans to stage an invasion of China. “Although the KMT was to fail in its military operations,” writes Alfred McCoy, “it succeeded in monopolizing and expanding … the opium trade.”51 He continues:

The KMT shipped the opium harvests to northern Thailand, where they were sold to General Phao Siyanan of the Thai police, a CIA client. The CIA had promoted the Phao-KMT partnership to secure a rear area for the KMT, but this alliance soon became a critical factor in the growth of Southeast Asia’s narcotics traffic. With CIA support, the KMT remained in Burma until 1961, when a Burmese army offensive drove them into Laos and Thailand. By this time, however, the Kuomintang had already used their control over the tribal populations to expand Shan state opium production by almost 500 percent – from less than 80 tons after World War II to an estimated 300-400 tons by 1962.52

The CIA’s Burma-Thailand support for the KMT was code-named “Operation Paper.”53 One of the architects of the operation was a close associate of Thailand’s General Phao named Willis Bird – later nicknamed Mr. Opium. Bird, during World War II, had served with OSS in the Burma-China-India theater. after the end of the conflict, he remained in the region as a supplier to the Thai military and police. Whether or not Bird was an on-the-books asset of the CIA isn’t clear, though he certainly was a middleman for moving supplies that had been obtained via Agency financing.

These supplies arrived in Thailand by way of a company called South East Asia Supply Corporation, most frequently referred to simply as SEA Supply.54 Willis Bird acted as SEA Supply’s Bangkok office manager under the direction of Sherman Joost – a veteran of OSS Detachment 101. SEA Supply was not set up in Thailand, however. The business was instead registered in Miami, Florida by OSS-veteran- turned lawyer and banker Paul Helliwell. At the same time that Helliwell was handling the legal end of SEA Supply’s activities, he was also acting as consul for the Thai government in the US. In this capacity, he was closely linked to General Phao and the network of politicians who supported him.55

SEA Supply worked closely with Civil Air Transport (CAT), the CIA’s first proprietary airline. The roots of CAT were planted during the Second World War, when Claire Chennault organized the Flying Tigers, a volunteer aviation unit set up to provide support for the KMT in China in their fight against Japan. With ranks drawn from the US military, the Flying Tigers trained at bases in Burma, which acted as a logistics hub for their airlift. Chennault had long standing ties to the KMT: since the late 1930s, Chennault had served as a military advisor to Chiang Kai-Shek and his brother-in-law, the powerful Nationalist Chinese banker and diplomat T.V. Soong.

Besides his links to the KMT leadership and to the US military, Chennault maintained an impressive array of contacts. His lawyer was Thomas Corcoran, a top advisor in President Roosevelt’s New Deal brain trust. Corcoran was close to Helliwell, and both worked together to promote Chennault’s aviation plans when the war ended. Back in America, Chennault fell in with the so-called China Lobby, the network of politicians, businessmen, and other players who lobbied for support for the KMT as the only viable group who could oppose the Chinese communists. He set up and managed an impressive airlift of “American relief supplies in China” – with the supply flight contracts going to Chennault, of course.56 Central to this effort was the 1946 creation of a new airline called Civil Air Transport that Chennault had co-founded with Whiting Willauer.57 Willauer would go on to be US ambassador to Costa Rica and was also later involved in the 1954 CIA-led coup in Guatemala. When the KMT retreated to the island of Formosa (now Taiwan), Chennault used CAT to run arms and medical supplies to National Chinese fighters.

CAT was brought into the world of special operations thanks to the efforts of Helliwell. He had brought Chennault and the aviation company to the attention of Frank Wisner, then the head of a covert body called the Office of Policy Coordination (OPC). Within several years, the OPC was incorporated into the CIA, cementing in place a militarized command structure governing the dark arts of the clandestine services. By 1950, CAT was a full-fledged CIA proprietary airline, operating under the auspices of a holding company set up by the Agency called Airdale Corp58 Later, Airdale Corp was renamed Pacific Corp, and CAT would become Air America.

Air America was the CIA’s premier airline, and remained active from the 1950s into the 1970s. It was finally dissolved in the wind-down of the Vietnam War, though many of its assets were sold off and absorbed into a CIA-linked firm called Evergreen International Aviation. Meanwhile, several Flying Tigers pilots went on to create the air freighter firm Flying Tiger Line, a major commercial cargo airline that also operated military contract services and engaged in covert operations. Flying Tiger Line would later have a major presence at the Rickenbacker airfield near Lockbourne, Ohio. CAT’s later incarnation, Southern Air Transport, would relocate there in the early 1990s, a few years after Flying Tiger Line was absorbed into Federal Express. The airline’s relocation was thanks, in part, to Jeffrey Epstein and had chiefly relocated to manage cargo for Leslie Wexner’s The Limited (see chapter 17).

Connections to organized crime appear in nearly every corner of this web. Take, for instance, Margaret Chung, an “attending physician” for Chennault’s Flying Tigers. A member of the Hip Sing tong, she made “frequent trips” to Mexico City in the 1940s in the company of Virginia Hill – an inside player in organized crime circles with close ties to the likes of Bugsy Siegel and Meyer Lanksy.59 During this period, Hill “became intimate with a number of Mexico’s top politicians, army officers, diplomats, and police officials,” which likely facilitated the activities of her friends in the underworld.60 Hill was also particularly close to the Chicago Outfit during this time, the significance of which will become clear shortly.

As mentioned above, Mexico had become an important base of operations for the drug smuggling network of Costello and Carolla. Given their ties to Meyer Lansky, it is certainly possible that Hill’s own appearance in Mexico was connected to these earlier activities. Importantly, Mexico had also become a vital transshipment point for the KMT’s own drug trafficking during this same period. Does the presence of Margaret Chung alongside Hill, then, suggest that the KMT’s drug operations in Mexico directly intersected with those of Lansky and his milieu? Given the history of Lansky associates working with the KMT and the Green Gang, it is certainly possible, if not likely.

The structure of this apparently intricate network can be developed further when considering that Civil Air Transport, one of the successors to the Flying Tigers, was, by 1960, flying in and out of Laotian territory controlled by the Hmong tribesmen. The tribesmen were a major supplier of opium destined for refinement into heroin (the CIA’s covert support for the Hmong is discussed in Chapter 5). Airstrips for CAT’s flights were built by Bird and Sons, a “private engineering firm” controlled by “the CAT representative in Bangkok,” William H. Bird.61 Bird was the cousin of Willis Bird of the OSS and of Helliwell’s SEA Supply.

There was also the case of Helliwell himself. By this point, he had become a prominent player in Republican politics. He was, for example, a delegate for Dwight Eisenhower as he strove to clinch the Republican Party presidential nomination. Helliwell had also been a leader in the Florida chapter of Citizens for Eisenhower. That chapter was subsequently accused of “being taken over by professionals who refuse[d] to work with the regular GOP leaders and who are accountable to no one for the finances they collect.”62 Members of this cadre of operators aside from Helliwell included Curt Landon and James Guilmartin. Together, these three men were tightly-connected co-conspirators amassing unaccountable power:

Landon is a substantial client of Helliwell’s law firm; Guilmartin is a partner of Helliwell’s and Guilmartin is married to Landon’s daughter. We find these men closely allied by business and marriage who, if their plan succeeds, will find themselves in a position of enormous power in Florida and responsible to no recognized Republican authority.63

While Helliwell was making waves in the world of politics and in the world of covert operations, he was also making a foray into the world of Florida insurance. He was the consul for, and later secretary, then chairman, of American Bankers Life Assurance, located in Miami. Importantly, Helliwell utilized the offices of American Bankers Life as the hub for many of his activities. The Florida Thai consulate, for instance, was located at the same address as the insurance company – as was SEA Supply.

In addition to this important CIA linkage, American Bankers Life also shared important connections – one of which was Helliwell himself – with Miami National Bank. Founded with a loan from the Teamster pension fund, 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 inter-locking Exchange and Investment Bank in Geneva.”64 The importance of Lansky’s Geneva bank will be discussed in Chapter 3.

Helliwell’s ventures, and specifically his banking endeavors, were probably related to the flow of heroin that originated as KMT opium and then passed through the hands of American organized crime figures. In his book Hot Money and the Politics of Debt, offshore banking expert R.T. Naylor writes that “South Florida is … a major refuge for Latin American flight money, which pours into the Florida banking system and local real estate. The flight capital-into-real estate business is an old one. In the 1950s and 1960s, Kuomintang money from Thailand and Burma came via Hong Kong to be washed in Lansky-related property firms.”65

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Part 2 of 3

THE SUPERMOB

The global drug trade is a massive business, and the offshore banking system that enables it is even bigger. Although most imagine drug networks, their controllers and their users as existing on the fringes of society, in reality, the massive amounts of capital that result from the production and distribution of illicit drugs occupy a central place with-in the global economic system. Consider a statement made in 2009 by Antonio Maria Costa, who was then the head of the UN Office on Drugs and Crime. According to Costa, proceeds from the drug trade were an important source of liquidity for cash-starved banks at the height of the 2008 economic crisis. The amounts absorbed by the banking system were enough to prevent some banks from collapsing: “Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities…. There were signs that some banks were rescued that way.”66

In 2000, Le Monde Diplomatique suggested that the global drug trade was a billion dollar a year business – an incredibly low estimate. Seventeen years later, the Global Financial Integrity Project estimated that worldwide drug trafficking revenue stood somewhere between $426 to $652 billion annually.67 In the same report, the overall revenue of illicit activities was posited to be $2.2 trillion. The UN Office on Drugs and Crime, meanwhile, estimated that money laundering activities – encompassing the washing of illicit drug revenue and more – make up anywhere from 2 to 5% of global GDP, at around $800 billion to $2 trillion.68 This, again, is almost certainly a conservative estimate. In 2012, $21-$32 trillion was estimated to be sloshing through the offshore banking system.69 This number would have only increased in the wake of the earlier 2008 financial crisis.

When such immense sums of money are being generated, it isn’t left to idle in bank accounts in the Caymans, Bermuda, the City of London, or wherever. The end destination of a money washing process is to transform dirty money into seemingly-clean investment capital. Journalist Michael Ruppert, in his book Crossing the Rubicon, cites cases where companies have tapped illicit money flows in order to borrow money at a lower interest rate than they would receive from major banking institutions.70 The conversion of dirty or hot money into “credit capital” (capital that begins as a line of credit issued by a lending institution) is made easier by bank secrecy laws in tax havens, which makes it possible for legitimate and illegitimate pools of capital to intermingle freely.

Catherine Austin Fitts and Chris Sanders have gone even further by suggesting that there is a positive correlation between the upwards trajectory of stock market performance and the consistent ballooning of the drug trade. While there are a number of factors that impact stock market performance – such as easy money injected into the economy by the central banks of various countries – Fitts and Sanders write that:

It may seem strange to think of a positive correlation between narcotics trafficking and the stock market, but consider … the proceeds of crime need to find a way into legitimate, that is, legal, channels or they are worthless to the holders. If one further imagines that the banking system earns a fee of one per cent for handling this flow (rather low considering that money laundering is a seller’s market) then the profits for banks from this activity are of the order of $5 to $10 billion. Applying Citigroup’s current stock market multiple of 15 or so to this yields a market capitalisation of anywhere from $65 to $115 billion. One can thus readily see the importance of the illegal drug trade to the financial services industry.71

Another tactic for washing money is the “capital-into-real estate” operations that Naylor referred to in relation to KMT drug money flows in Florida. Indeed, it seems that the explosive growth of the world economy in the decades following World War II opened up countless investment opportunities where the funds from drugs and other sources of capital for organized crime would be socked away. It was this period, after all, that saw the great ballooning of real estate markets and the high tech industry, along with the modern tourism industry that spawned everything from destination resorts in “exotic” locales to the sparkling lights of Las Vegas casinos.

In his book Power Shift, Kirkpatrick Sale argues that the post-war era was characterized by a rising “Southern Rim” that came to confront the traditional seat of American economic and political power in the north-east. The Southern Rim was made of the southern states, portions of the Midwest and the Sunbelt – a large expanse that stretched from Florida to California. The Rim’s ascendancy, he argues, was connected to the opening up of vast real estate opportunities, related in part to tourism and retirement, to the oil and gas industries, and to the delirious growth of defense-related industries under the new Cold War paradigm.

Sale suggests that organized crime, so often associated with the American northeast, found a remarkable range of new opportunities in the Southern Rim, thus propelling these networks to previously inconceivable heights of power and influence. The blossoming trade of opium and heroin, clearly spurred and protected by the CIA, fit snuggly into these series of developments. Sale writes that:

Smuggling – especially of heroin, in which the trade grew steadily more lucrative after the opening up of Asia’s golden triangle in 1948 – tilted to the South, taking advantage of the enormous Rim coastline and the porous Mexican border, along which whole networks of “Latin connections” and “Mexican connections” were developed.… And everywhere in the booming Rim, millions of dollars were placed in legitimate investments, chiefly in those high-risk operations where venture capital is hard to come by – oil exploration, for example, and land speculation – and in those large-scale businesses where sizable amounts of capital are necessary – corporate farming, for example, technological manufacturing, and, above all, real estate development.72

The observations and arguments made by Kirkpatrick Sale, Michael Ruppert, and Catherine Austin Fitts neatly dovetail with the complicated yet organized history detailed by Gus Russo in his book Supermob. The term “Supermob,” per Russo, refers to a close-knit circle of Jewish and Italian mobsters and businessmen who arose in the corruption-ridden corridors of Chicago and who then installed themselves in California and elsewhere. What makes the “Supermob” unique is that it was particularly stark and fairly unmasked example of how criminal networks, political power, and “legitimate” commercial activity mixed together in the period of explosive economic and cultural growth in the wake of World War II.

A key player in this group was Jake Avery, who started off as a political fixer in Chicago’s 24th Ward. He acted as a precinct captain, and managed to swing the dominant political orientation of the ward from the Republican to the Democratic Party. He was later praised by Franklin D. Roosevelt for his efforts to make his district “the best Democratic ward in the country.”73 By 1928, Avery was the ward chairman – and a budding associate of organized crime. He forged an alliance with the gangster Al Capone, and the two worked together to elevate Anton Cermak to the mayor’s office.

On the business side of things, one of Avery’s closest associates was Henry Crown, who later became a major figure in the Hilton hotel company, the dominant controlling interest in the major defense contractor General Dynamics, and the owner of the Empire State Building. He subsequently sold the iconic building to Lawrence Wien, a New York City lawyer and real estate developer who was helping manage the assets of the Desert Inn in Las Vegas, which was controlled by mobster Moe Dalitz and, as will be noted in Chapter 4, tied up with the affairs of the infamous lawyer Roy Cohn.

Crown was also in business with David G. Baird, who ran a trio of foundations closely tied closely to organized crime and that moved CIA money. David Baird and his foundations will also be discussed in Chapter 4. Crown’s son, Lester, would later join the “Mega Group,” which was co-founded by Leslie Wexner and Charles Bronfman in 1991 and is discussed in detail in Chapter 14.

Henry Crown’s business empire first began with his company Material Services Corporation, a supplier of concrete and other materials for construction companies. During World War II, Crown took leave from Material Service to serve in the Army Corp of Engineers. During this same period, the company benefited greatly from Crown’s relationship with Jake Avery. As Russo writes, Avery, who had also joined the armed services, “managed to become, with no small thanks to friends in the Roosevelt administration, the overseer of countless international post exchange (PX) facilities on military bases. Soon, the military was supplying these PXs with goods purchased from buddy Col. Crown’s Material Service Corporation.”74

In 1959, Material Services Corporation merged with General Dynamics, which – at the time – was a producer of bomber aircraft, ballistic missile systems and other cutting-edge technologies for the American military. Crown received 20% equity in the company, making him the controlling stakeholder, and his righthand man, Patrick Hoy, was installed as vice president of the corporation. Hoy had earlier been president of the Hotel Sherman in Chicago, a popular watering hole for various denizens of the city’s organized crime community.75 Since General Dynamics’ board was populated by a cross-section of individuals tied to the Cold War military and intelligence structures, this chain of ownership and associates is a surprisingly straightforward instance of mutual collusion between these spheres and the criminal underworld. In 1966, after leaving General Dynamics, Hoy became vice chairman of the Penn-Dixie Cement Company – the CEO of which, Jerome Castle, “was an admitted ‘old friend’ of New York crime boss Frank Costello.”76

Avery, Crown, and Hoy were all close to an important Chicago lawyer named Sidney Korshak. The Korshak family had grown up with the Averys, and just like Jake Avery, Sidney Korshak forged an early working relationship with Al Capone. Even before he was officially an attorney, Korshak’s side gig, while he was in law school, had been to act as an advisor to the infamous gangster. His subsequent law partner, Edward King, was the “lawyer for Capone’s heir Frank Nitti,” before setting off for “greener pastures in New York,” where he worked for Meyer Lansky himself.77 Lansky and Korshak also did business together, as partners in the Acapulco Towers Hotel. Notably, the magazine New West stated in 1976 that Korshak was the “logical successor to Meyer Lansky.”78

Like Crown’s business associate Lawrence Wein, Korshak had ties to mobster Moe Dalitz’s circles. According to Russo, Korshak lent his considerable legal talents to helping arrange frontmen for organized crime interests in Las Vegas hotels and casinos. “[T]he hoods,” he writes, needed owners of record whose IRS statements reflected legitimate wealth. The obvious first choice was … Moe Dalitz.”79 Dalitz, his criminal background, and his webs of associations will be discussed mainly in Chapter 4.

Another associate of the “Supermob” was Julius Caesar Stein, an “ophthalmologist and musician” that abandoned “his medical career to book dance bands and singers into speakeasies and nightclubs on Chicago’s South Side.”80 In 1924, he founded the Music Corporation of America (MCA) as an umbrella company for his booking efforts; reportedly, Al Capone owned a secret piece of the company. While this cannot be confirmed, it is true that Capone and Stein had a cozy relationship, with the gangster ensuring that Chicago’s bars, clubs, and music halls directed their business towards Stein and MCA.81

In 1936, Stein brought a man into the MCA fold who would go on to fundamentally shape the character and direction of the American entertainment industry forever – Lew Wasserman. Unsurprisingly, Wasserman already boasted a background in mob circles: he had been the publicist for Cleveland, Ohio’s Mayfair Casino, which was controlled by Moe Dalitz’s network. Dalitz and Wasserman maintained life-long ties – Wasserman would even marry Edith Beckerman, the daughter of Dalitz’s lawyer, Henry Beckerman.82 Wasserman knew Beckerman from his days at the Mayfair Casino: Beckerman’s name was listed on the club’s liquor license.83 Wasserman’s and MCA’s connections to organized crime are discussed in greater detail in chapters 9 and 10.

Soon, the Chicago mob began its slow creep into Los Angeles, moving into Hollywood and adjacent industries. The man who started off their advance was Johnny Roselli, who would later land in Las Vegas as the Chicago mob’s frontman in the casino business. He was placed in charge of skimming operations, which, as will be discussed in Chapter 3, moved money into offshore banks in the Caribbean that were themselves controlled by representatives of Meyer Lansky. Perhaps it was his intimate familiarity with this world that helped Roselli become the CIA’s mafiosi of choice when it came to recruiting organized crime figures for its covert assassination plots against Fidel Castro in Cuba.

Through the operations that took shape in California, massive amounts of illicit money began to be dumped into “above-board” industries. Real estate was a particularly hot commodity, and the architect of many of the investments made by the “Supermob” was a protege of Avery and Korshak named Paul Ziffren. Ziffren’s granddaughter would later marry Lew Wasserman’s grandson, later bringing these families even closer together. Ziffren acted as the LA representative of Hilton Hotel interests, and he was the source of the seed capital that launched Store Properties Inc., a real estate holding company whose ostensible owner was a man named Sam Genis. Genis was most likely a conduit for enabling the flow of organized crime money into real estate. Per Russo, Genis was:

…a known associate of mob bosses Longy Zwillman, Doc Stacher, Frank Costello, Joey Adonis, and Meyer Lansky. Genis’ criminal record showed that he had been arrested for bad checks in Florida, embezzlement in New York, and mail fraud and securities law violations in Georgia.… By 1957, Store Properties had bought thousands of acres of land in over three hundred transactions worth $20 million in Los Angeles alone. When Store’s other California purchases are factored in (in San Bernardino, Fresno, Oakland, and San Francisco), the estimate approaches $100 million. Then there were the additional investments in such states as Arizona, Utah, Colorado, Oklahoma, Florida, Illinois, and New York.84

Genis, interestingly, was the member of an organized circle of businessmen who helped provide the start-up capital for the Committee on the Present Danger (CPD), an early Cold War-pressure group set up to build public support for the militarization plan that had been drawn up by NSC 68. NSC 68 was a National Security Council policy paper that called for the remarkable expansion of the US’ military budget. Naturally, the CPD counted among its members many representatives of defense contracting companies, a field that, as noted above with the case of Crown, Hoy, and General Dynamics, was becoming increasingly infiltrated by elements of organized crime.

The organizers behind this California group (CPD) were the movie producer Samuel Goldwyn and industrialist Floyd Odlum. Odlum, a shadowy figure who is now largely forgotten, was the man behind the towering Atlas Corporation, through which he invested heavily into a vast array of aviation companies, film studios, real estate, and natural resources. Atlas Corporation would later gain lucrative government contracts; in particular for its interests in uranium mining inside the United States and abroad. Odlum’s interests were certainly diverse: through Atlas, his money seeped into Hilton hotels, into the United Fruit Company, and into Pan Am. Atlas also controlled Convair, the aircraft manufacturer and defense contractor, which it sold to General Dynamics in 1953. As part of the deal, Atlas received large amounts of General Dynamic stock and a representative on the company’s board. Odlum and Harry Crown, in other words, were directly affiliated.85

Other associates of the California group backing the formation of the CPD were a number of film industry figures, including future president Ronald Reagan. Reagan was a MCA man through and through, having been represented by the company when it bought out the agency that had previously represented him in 1940. “Based on the success of King’s Row in 1942,” wrote Dan Moldea in his book on MCA, Dark Victory, “[Lew] Wasserman renegotiated Reagan’s contract with Warner Brothers, obtaining a deal that paid Reagan $3,500 a week for seven years. The deal gave Reagan the distinction of being Wasserman’s first ‘million-dollar client’.”86

As will be noted again in Chapter 10, the rise of Reagan to the heights of political power in the United States was facilitated in large part by Wasserman and MCA. At the same time, Reagan was vital to the survival and success of MCA in Hollywood. At the behest of Wasserman, Reagan ran for, and won, the presidency of the powerful Screen Actors Guild (SAG). At the time, Reagan was also acting as an FBI informant, reporting to the bureau on leftists in Hollywood. Once in charge of the SAG, Reagan began to change the rules to benefit his benefactors. SAG had previously restricted companies like MCA – that is, talent agencies – from becoming producers. However, in 1952, Reagan granted the company a special waiver. MCA thus gained “an insurmountable edge over competing agencies in Hollywood” and “began to exponentially increase its hold over the entertainment industry.”87

Later, when Reagan secured the governorship of California in 1966, MCA’s hidden hand was again lurking in the background. The co-chairman of his campaign was Taft Schreiber, the long-running vice president of MCA, while the company’s founder Jules Stein went to work arranging funding. According to Moldea, a “standing joke in Hollywood was that ‘MCA even had its own governor’.”88 MCA had actually hedged its bets in that election. Running against Reagan was the incumbent Pat Brown, who was being backed by Wasserman and Korshak. Henry Denker, a playwright and producer with numerous Hollywood connections, stated that:

MCA was divided into two groups. There was a Democratic group and a Republican group. They always wanted to have a hand in the White House, no matter which party was there. When Reagan was doing the General Electric show, somebody came up with the idea that he would promote GE to the plants, make visits. These appearances were very successful. They saw how the workers loved him, and somebody at MCA said, ‘Hey, he could be governor of the state.’ In show business you go with what’s working – that’s an old maxim.89

After being defeated by Reagan, Pat Brown took a directorship at Investors Overseas Services (IOS), an international mutual fund with connections to Meyer Lansky. He had been brought to the fund by James Roosevelt, one of the sons of former President Franklin D. Roosevelt. James, it seems, had organized crimes ties of his own, as he had done business with Store Properties, the mob-controlled real estate company that had been set up by Ziffren and Genis. Also partnered alongside Roosevelt in Store Properties was James Swig, who would serve earlier as “Pat Brown’s statewide finance chairman in his successful California gubernatorial campaign.”90

The Roosevelt boys seemed to have a penchant for fostering ties to the underworld. James’ brother, John Roosevelt, had arranged for Jimmy Hoffa to get a job at Bache & Company, a New York City securities and stock brokerage that “handled about 25 percent of the [Teamster Pension’s] funds $160 million dollar investments.”91 The president of Bache & Co., incidentally, was Frank T. Ryan, a veteran of the OSS, who was partnered with the spymaster William Donovan and other veterans of US and British wartime intelligence in the World Commerce Corporation (WCC). WCC itself was capitalized by a handful of firms, including Bache & Co. itself and Floyd Odlum’s Atlas Corporation, which was represented on the WCC board by Odlum’s brother-in-law, L. Boyd Hatch.92

With this set of ties, the specter of intelligence connections begins to emerge once again. It is no surprise, then, that there is a direct line running from the Chicago-Los Angeles “Supermob” to the networks that were simultaneously being organized by Paul Helliwell.

KINGS OF THE CASTLE

On the forty-fifth page of the most-well known of Jeffrey Epstein’s two black contact books are the names and numbers of two individuals from the same prominent Chicago family: Nicholas and Thomas Pritzker. Epstein listed two addresses, five phone numbers and one email address for Nicholas; for Thomas, he had two addresses, one email, and twelve phone numbers ranging from his main office number to his farm to his emergency contact line. Under Nicholas Pritzker, Epstein placed the name “Hyatt Development Corp” – the Hyatt hotel company had been taken over by the Pritzker family late in the 1950s – while under Thomas he cryptically noted “Numero Uno.”

The Pritzkers have long been a potent force in local, state and national politics. Penny Pritzker, a cousin to Thomas (and a board member of the Council on Foreign Relations), had met Barack Obama in the early 1990s, and the future president’s political career has long relied on lucrative donations made by her and her family. Obama repaid his debt by making Penny Pritzker a member of the President’s Economic Recovery Advisory Board. During Obama’s second term, Penny was nominated – and confirmed – as his Secretary of Commerce.

Penny’s brother J.B. Pritzker, meanwhile, served as the co-chair of Hillary Clinton’s 2008 campaign before working to broker an agreement between Clinton and Obama. In 2019, he was elected Governor of Illinois. The third sibling, Anthony Pritzker, has avoided taking public office, but maintains a post on the advisory board of the Center for Asia Pacific Policy at the RAND Corporation.

Travel up the family tree and one begins to find that the Pritzker family’s wealth and influence might have originated in darker corners. Take Abram Nicholas Pritzker, grandfather to Nicholas, Thomas, Penny, J.B. and Anthony. One of three sons of Nicholas J. Pritzker, Abram had worked with his brothers at the family law firm, Pritzker & Pritzker, where he specialized in business law. In the 1930s, he decided to dip into the world of business himself, and he and his brother Jack invested in a string of companies across Chicago. One of these was Hyatt, which would help the family secure lasting influence. As was the case with Henry Crown, the Pritzkers had to deal with the Hotel and Restaurant Employees Union – where Sidney Korshak was the labor negotiator.

Then, there was the case of the Frontier Finance. As Gus Russo writes:

Jack Clarke, a renowned Chicago private investigator, recently recalled what he heard on the streets: “Frontier Finance was used and owned by the Pritzkers as a holding company and is believed to be the secret to the origins of the family’s involvement with criminals. Pritzker lent to immigrants ‘five for seven,’ or five dollars lent against seven dollars repayment with interest. It was started on the West Side and the Pritzkers let the mob run it for them. This company office was where the mob held their meetings.” Frontier Finance was a state-licensed loan company, with a number of legit investors, such as the postmaster of Chicago, a former chairman of the Cook County Republican Party, and a retired Chicago police captain. But curiously, the president of the firm was Frank Buccieri, brother of the notorious Fiore “Fifi” Buccieri, one of the Outfit’s top gambling bosses and a dreaded “juice” collector.93

Another Abram Pritzker venture was the Franklin Investment Company, which later went on to dominate the hotel business in Columbus, Ohio. It had been set up with the aid of Paul Ziffren, who acted as a partner in the venture. Joining them was a friend of Abram named Arthur Greene. Described by the Chicago Crime Commission as the “brains of all the Chicago rackets,” Greene – a close associate of the aforementioned James Roosevelt – was reported to have facilitated investments on behalf of Meyer Lansky. Additionally, “Greene somehow figured in the California expansion of Jules Stein’s MCA, through a relative named Edwin Greene” – a vice president at MCA.94

The Pritzker family employed Burton Kanter to serve as the tax attorney for their burgeoning empire, and Kanter gained a spot on the Hyatt board. Kanter would, in time, boast connections to powerful operatives from international criminal networks – not to mention the CIA and Israel’s Mossad. Yet, earlier on, Kanter received massive kickbacks from Abram Pritzker after Kanter arranged for the family to take over a San Francisco hotel built by Prudential Financial (Kanter, in characteristic fashion, opted not to pay any taxes on his gains).95 As part of the deal, Kanter had arranged for secret payments to be made to Prudential executives. What’s remarkable about this story is that it took several decades to unravel: Kanter and Pritzker had put this scheme in motion in the 1970s, but it was not revealed until 2007.

Kanter was deeply connected to the world of mob-linked business. In 1968, for example, he was listed as the agent for the La Costa Club near San Diego. La Costa, for all intents and purposes, was built for and by organized crime figures. Gene Ayres and Jeff Morgan, writing in the Oakland Tribune, noted that “La Costa’s original developers include Allard Roen, who was convicted in 1962 on stock fraud charges, and Morris Barney ‘Moe’ Dalitz, who, with Roen, was part of the old-time Cleveland gambling crowd.”96

Ayres and Morgan then added that “Among La Costa’s visitors have been Chicago ‘politicians’ Marshall Korshak [brother of Sidney Korshak] and Jake Avery; St. Louis attorney Morris Shenker, a legal defender of James Hoffa.… One man who reportedly spends more time at La Costa than anyone else is Allen Dorfman, the Chicago insurance magnate who wields tremendous influence over the Teamsters Central State Pension Fund”.97 La Costa itself managed to tap into $62 million in Teamster pension fund loans.98 Importantly, a close associate of Kanter named Stanford Clinton – himself a partner at the Pritzker & Pritzker law firm and Hyatt board member – was a trustee for the fund.99

Other Kanter ventures were located far from the windswept cityscapes of Chicago and the sunny, beach-adjacent plains of Southern California. He was also connected to a most curious bank located in the Bahamas: Castle Bank and Trust. When the IRS came knocking on Castle’s door, Kanter told them he was merely a tax consultant to the bank. That was a lie – he was one half of the bank’s top management, and he was shepherding money from his various clients into its coffers. The Pritzker family itself would later be revealed to be the bank’s largest depositors, while a number of people tied closely to them maintained accounts there as well. Stanford Clinton held money in Castle, as did the actor Tony Curtis, a close friend of Sidney Korshak.100 Playboy’s Hugh Hefner was there as well; he intriguingly “planned to join with a Pritzker company in an Atlantic City casino venture.”101

Castle maintained accounts for the usual crew of organized crime suspects. Morris Kleinman, Sam Tucker and Lou Rothkopf, as well as major parts of the Cleveland mob scene that surrounded Moe Dalitz, held money in Castle. However, accounts vary as to whether or not Dalitz himself had money there.102 Kleinman, whose attorney was Kanter, was reportedly a secret co-owner in the bank. Either way, his accounts in Castle reflected his hidden interest in a company called Karat Inc., which operated the Stardust Casino in Las Vegas. The Stardust itself was owned by Lodestar Inc., a company controlled by Dalitz.

Authorities had been put on the trail of Castle Bank in 1971 after a man named Allan George Palmer and several of his associates were busted flying marijuana from Florida to Oakland, California. Palmer was subsequently revealed to have been “a major producer of LSD, mescaline, and THC” in the San Francisco Bay area since around 1968.103 Palmer fell under the scrutiny of the San Francisco IRS office, which was then leading a program against drug money networks. That office soon discovered that the dealer had used the then-unknown Castle Bank, whose services he accessed via American National Banker & Trust Company in Chicago. Palmer, it seems, had been brought to Castle via Roger S. Baskes, Kanter’s brother-in-law and a partner in his law firm.

This was not the only LSD-related banking taking place at Castle. Accounts were also maintained by William Mellon Hitchcock, a scion of the Mellon family, who will appear again in connection with the UK’s Profumo Affair in Chapter 4. Hitchcock was one of the financial backers of the Brotherhood of Eternal Love, the so-called “hippie mafia” that produced and distributed psychedelics on an international scale.104 Given that they were based in Orange County, California, it is possible that Palmer’s ring was part of their operation – though that cannot be confirmed at this time.

The San Francisco IRS requested aid from the IRS intelligence apparatus in Chicago, which promptly tracked down Castle’s information. They found a card that listed the bank’s principals, several of whom were revealed to have been fictitious characters. At the top of the list was Kanter and his partner, the other half of Castle’s management: Paul Helliwell. Alan Block writes that “Kanter and Helliwell had known each other since the late 1950s, having met while working on a deal between a Kanter client and one of Helliwell’s.”105

Castle Bank was a melding of worlds. On the one hand, there was Kanter’s specialty in offshore trusts and his connections to both the city’s political power centers and the sprawl of its “supermob”. On the other hand, there was Helliwell – the Republican Party insider, intelligence veteran (and continued intelligence asset), and an offshore specialist in his own right with intimate connections to the blossoming heroin traffic coming out from Southeast Asia. Together, they organized a complicated money laundering operation that silently moved the funds of powerful gangsters, politicians, businessmen, and intelligence services around the globe.

When Castle was first established, it was a just a paper company – a company that existed only as a legal entity, with no officers, infrastructure or business activity to speak of. It sat for three years from when it was registered in 1964 until 1967, when it was finally activated. A physical headquarters was established in Nassau and a law firm – that of a British expat living in Argentina named Anthony James Tullis Gooding – was retained. Shortly thereafter, the number of accounts at the bank began to balloon. Banking relations were then established with banks in the United States; namely, Bank of Perrine and Bank of Cutler-Ridge.

Bank of Perrine and Bank of Cutler-Ridge were small, Florida-based institutions that were intimately interconnected. They shared relationships not only with Castle Bank, but with one another as well. Both had the same chairman – Paul Helliwell – and they were also owned by the same sets of holding companies, HMT Corporation and later Florida Shares, Inc. The shares of these companies were owned by Helliwell and his circle of associates, with one being a mysterious figure by the name of E.P. Barry. Helliwell and Barry had known each other since their days together in the OSS, though the details of the particulars of their relationship are murky. Barry had spent time in the Middle East during his clandestine service, but, by the end of the war, he was serving as the head of OSS’ X-2 Vienna branch (i.e. the OSS counterintelligence division).106

Following the war, Barry remained in Europe and became immersed in the world of Zurich banking. Through Barry and his connection to Helliwell and HMT/Florida Shares, a number of connections can be found. As will be discussed in Chapter 3, Barry, at the same time that he was involved with these Florida banks, could also be found at the ground floor of Inter Maritime Bank, which was controlled by a close friend of future CIA director William J. Casey and a businessman-underworld operator named Bruce Rappaport (Casey, also an OSS veteran, was reportedly close to Barry as well).

Another bank, discussed in later chapters, is the Bank of World Commerce, a Lansky-controlled bank that helped move casino skim and other “hot money” funds abroad. According to Tom Farer, Bank of Perrine had banking relations with the Bank of World Commerce in addition to Castle Bank and Trust.107 What was taking shape, in other words, appears to have been an elaborate “daisy chain” of offshore banks.

One of the early ventures that Castle engaged in was a convoluted land fraud that netted millions and intimately involved Kanter. The fraud was carried out under the auspices of a company called International Computerized Land Research (ICLR). Gooding, the British-Argentine attorney who represented Castle, registered the company, and Kanter appears to have kept the company afloat financially, in addition to it using the services of Castle Bank. Thanks to the Bahamas’ bank secrecy structures, Kanter was able to obscure his position as hidden partner in ICLR.

ICLR was run by James McGowan and James Farrara, the latter of whom was a “fairly sleazy operator with a criminal record stretching back to 1926 when he was fined for running a whorehouse. He spent some time in prison in the 1930s and 1940s for violations of the Mann Act, having to do with transporting women across state lines for immoral purposes.”108 ICLR was just one, albeit the largest and most complex, in a string of companies this pair had formed in order to hawk low-value California land at high price to unsuspecting investors in Europe and Asia. “The promotional material,” reads one press report, “lists Nassau, Okinawa, Hong Kong, Zurich, and Munich as sites of real estate agencies representing ICLR.”109

Like Kanter’s elaborate kickback schemes on behalf of the Pritzkers, authorities took decades to untangle the web left by ICLR. When indictments were finally brought against McGowan and Farrara in 1982, the Los Angeles Times reported that the duo stood accused of running a “far-flung land sales empire” that defrauded “buyers of more than $15 million over a 17-year period. ‘The $15 million is a very conservative number,’ said Assistant U.S. [Attorney] Gary Feess.”110 Given that Kanter and his associates effectively structured ICLR, provided it with financing, took a financial stake in the company, and provided it with banking services, there are obvious questions as to the ultimate purpose – and destination – of this pilfered money.

Castle Bank wasn’t only a repository and conduit for money belonging to tax-evading billionaires, shady businessmen, drug dealers and land fraudsters. It seems some of their other clients wielded a different kind of power that helped grant the bank its knack for evading official inquiry. First, a sweeping IRS probe into Castle that had unearthed an expansive network dedicated to tax evasion was shut down. In addition, the list of names of Castle clients investigators had obtained was declared to have been found through illegal means. Then, a Department of Justice probe into the bank was dropped in 1977. Three years later, in 1980, the real circumstances of this obstruction were revealed:

It now appears that pressure from the Central Intelligence Agency, rather than any legal problem, was what caused the Justice Department to drop what could have been the biggest tax evasion case of all time. Moreover, the supposed legal obstacle to using the Castle Bank Depositors’ list was questionable at best – the government already had in its possession the same list, legally obtained – What caused the Justice Department to back off seems to have been the CIA’s argument that pursuit of the Castle Bank would endanger “national security.”111

According to an unnamed Federal source, Castle Bank was “one of the CIA’s finance channels for operations against Cuba.” Helliwell – and presumably Castle – was purportedly involved with the Agency in “financing a series of covert forays between 1964 and 1975 against Cuba by CIA operatives working from Andros Island,” one of the many islands located in the Bahamas not too far from Florida’s southernmost coastline. Declassified CIA files show that, going back to the pre- Bay of Pigs invasion era, Andros was used as a staging ground for the CIA’s cadres of Cuban exiles that the Agency had armed and trained to fight against Castro. Later, in the 1980s, Andros would serve as one of the transshipment points for Colombian cocaine flowing into the United States by way of Nicaragua. Involved in this particular channel was a figure who will be addressed at length in future chapters, Robert Vesco.112

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Endnotes

1 Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade: Afghanistan, Southeast Asia, Central America, Colombia, Rev. ed (Chicago: Lawrence Hill Books: Distributed by Independent Publishers Group, 2003), 31.

2 The role of Haffendon is discussed at length in Rodney Campbell, The Luciano Project: The Secret Wartime Collaboration of the Mafia and the U.S. Navy (New York: McGraw-Hill, 1977).

3 McCoy, The Politics of Heroin, chap. 1.

4 Campbell, The Luciano Project, 76.

5 McCoy, The Politics of Heroin, 30.

6 Priscilla M. Roberts in "The American 'Eastern Establishment': A Challenge for Historians" describes the concept as encompassing "A body of individuals committed to what are often loosely term 'internationalist' policies, men drawn from the leading financial and business institutions, law firms, Ivy League universities, major philanthropic foundations, and communications media of the East Coast, who take a particular Interest in and have a substantial impact upon the direction of twentieth century foreign affairs." From the SHAFR Newsletter, XIV, December 1983, 9.

7 Richard H. Immerman, John Foster Dulles: Piety, Pragmatism, and Power in U.S. Foreign Policy (Rowan & Littlefield Publishers, 1998), 23-24.

8 Donald Janson, "Resorts Head Tells of Dropping Partner." New York Times, January 17, 1979, https://www.nytimes.com/1979/01/17/arch ... rtner.html.

9 Joan Cook, "James M. Crosby, 58, Founder of Hotel and Casino Concern, " New York Times, April 12, 1986, https://www.nytimes.com/1986/04/12/obit ... crosby-58- founder-of-hotel-and-casino-concern.html.

10 Sally Denton and Roger Morris write that the Mary Carter Paint Company "was widely considered to be a CIA front that laundered money to the Cuban exile army in the early 1960s." Sally Denton and Roger Morris, The Money and the Power: The Making of Las Vegas and Its Hold on America, 1947-2000, 1st ed (New York: Alfred A. Knopf, 2001), 284, https://archive.org/details/moneypowermakingOOdent.

11 John C. Williams, "Covert Connections: the FBN, the OSS, and the CIA." The Historian, Vol. 53, No. 4, Summer, 1991, 668.

12 Richard Harris Smith, OSS: The Secret History of America's First Central Intelligence Agency (Guilford, Conn: Lyons Press, 2005), 80.

13 Smith, OSS, 14.

14 David Rockefeller's wartime intelligence activities is discussed in David Rockefeller, Memoirs (New York: Random House, 2003).

15 Richard B. Spence, Wall Street and the Russian Revolution, 1905-1925, ePub (Oregon: Trine Day LLC, 2017), 507-08. Spence notes that when Donovan returned to New York City in October 1920, another passenger on the same ship was William Wiseman, the British spymaster who maintained a post in New York City during World War I (sort of a model for the later activities of William Stephenson and the British Security Coordination during World War II). In 1920, Wiseman went to work for Kuhn Loeb, and two years later became head of the New York & Foreign Development Corporation - a "spin-off" of Kuhn Loeb set up to "capitalize on Eastern European opportunities."

16 Thomas E. Mahl, Desperate Deception: British Covert Operations in the United States, 1939-44, ePub (Washington [D.C.]: Brassey's, 1998), 44.

17 Curt Gentry, J. Edgar Hoover: The Man and the Secrets (New York, N.Y.: Norton, 2001), 265-66.

18 Smith, OSS, 29.

19 Mahl, Desperate Deception, 65.

20 David Ignatius, "How Churchill's Agents Secretly Manipulated the U.S. Before Pearl Harbor," Washington Post, September 17, 1989, https://www.washingtonpost.com/archive/ ... -secretly- manipulated-the-us-before-pearl-harbor/0881f7a8-7c9d-49d0-8338- eac3be333134/

21 Mahl, Desperate Deception, 64.

22 Mahl, Desperate Deception, 96

23 Peter Dale Scott, Deep Politics and the Death of JFK (University of California Press, 1996), 174.

24 John H Davis, Mafia Kingfish: Carlos Marcello and the Assassination of John F. Kennedy (New York: New American Library, 1989), 50.

25 Davis, Mafia Kingfish, 59.

26 For an excellent overview of this history, see Shiu Hing Lo, The Politics of Controlling Organized Crime in Greater China, 2016.

27 Lo, Controlling Organized Crime, 12.

28 The most in-depth treatment of the KMT's opium monopoly efforts is Jonathan Marshall, "Opium and the Politics of Gangsterism in Nationalist China, 1927-1945," Bulletin of Concerned Asian Scholars, No. 8, Vol. 3, 1976.

29 On the Rockefeller Foundation and the KMT, see Marshall, "Opium and the Politics of Gangsterism," 21. On the activities of the China Medical Board, see the "Rockefeller Foundation Annual Report, " 1922, https://www.rockefellerfoundation.org/wp- content/uploads/Annual-Report-1922-1.pdf.

30 Marshall, "Opium and the Politics of Gangsterism," 22.

31 Marshall, "Opium and the Politics of Gangsterism," 30.

32 McCoy, The Politics of Heroin, 27.

33 Hans Derks, History of the Opium Problem: The Assault on the East ca. 1600-1950 (Boston: Brill, 2012), 689.

34 Hans Derks, History of the Opium Problem, 93.

35 George Parker, "Lord Sassoon to Join Jardine Matheson," Financial Times, January 3, 2013, https://www.ft.com/content/1a7c4e5c-55a ... 144feab49a.

36 "All the World's a Fair, Parts 1-4," January 3, 2021, Pseudodoxology Podcast Network, https//patreon.com/posts/45747840.

37 Douglas Valentine, The Strength of the Wolf: The Secret History of America's War on Drugs, ePub (London: Verso, 2004), 44.

38 Scott, Deep Politics and the Death of JFK, 167-68.

39 Scott, Deep Politics and the Death of JFK, 168.

40 Valentine, Strength of the Wolf, 195.

41 "Guide to the George White Papers." https://oac.cdlib.org/findaid/ark:/13030/tf6k40059bl.

42 H. P Albarelli, Coup in Dallas: The Decisive Investigation Into Who Killed JFK (NY: Skyhorse Publishing, 2021), 94.

43 Albarelli, Coup in Dallas, 101.

44 "NRO, Mafia, Organization A/O Membership, BKG, Criminal Act, Method of Operation, Legitimate Enterprises, Polit Act, Cuba." FBI Memo, October 11, 1955, https://www.archives.gov/files/research ... 301903.pdf.

45 Stephen Kinzer, Poisoner in Chief: Sidney Gottlieb and the CIA Search for Mind Control (New York: Henry Holt and Company, 2019), 123.

46 Kinzer, Poisoner in Chief, 126.

47 H. P. Albarelli, A Terrible Mistake: The Murder of Frank Olson, and the CIA's Secret Cold War Experiments, 1st ed (Oregon: Trine Day, 2009), 744.

48 Jonathan Marshall, "Cooking the Books: The Federal Bureau of Narcotics, the China Lobby and Cold War Propaganda, 1950-1962." The Asia-Pacific Journal 11, no. 37 (September 15, 2013), https:ljap-jjf.org/-Jonathan-MarshaI1l3997/article.pdf.

49 Marshall, "Cooking the Books."

50 Bertil Linter, Burma in Revolt: Opium and Insurgency Since 7948 (Routledge, 2019), 62.

51 McCoy, The Politics of Heroin, 162.

52 McCoy, The Politics of Heroin, 162.

53 Peter Dale Scott, "Operation Paper: The United States and Drugs in Thailand and Burma," The Asia-Pacific Journal 8, no. 44 (November 1, 2010), https://ap-jjf.org/-Peter-Dale-Scott/ 3436/article.pdf.

54 Linter, Burma in Revolt, 104.

55 See, for example, "20 Children," Miami Herald, November 20, 1954, https://miamiherald.newspapers.com/image/618421882.

56 Peter Dale Scott, The War Conspiracy: The Secret Road to the Second Indochina War (Indianapolis: The Bobbs-Merril Company, Inc., 1972), 7, https:// archive.org/details/warconspiracysOOscot.

57 John Prados, Safe for Democracy: The Secret Wars of the CIA (Chicago: Ivan R. Dee, 2009), 125.

58 Prados, Safe for Democracy, 196-197.

59 Valentine, Strength of the Wolf, 44.

60 Ed Reid, The Mistress and the Mafia: The Virginia Hill Story (Bantan Books, 1972), 42.

61 Scott, The War Conspiracy, 207.

62 "GOP 'Regulars' Hit At 'Harmful' Tactics In State Ike Group," Tampa Bay Times, August 25, 1952.

63 "GOP Regulars' Hit."

64 Scott, The War Conspiracy, 241.

65 R.T. Naylor, Hot Money and the Politics of Debt (Linden Pub, 1988), 292.

66 Rajeev Syal, "Drug Money Saved Banks in Global Crisis, Claims UN Advisor," The Guardian, December 12, 2009, https://www.theguardian.com/global/2009 ... rug-money- banks-saved-un-cfief-claims.

67 "Transnational Crime Is a $1.6 Trillion to $2.2 Trillion Annual 'Business,' Finds New GFI Report." Global Financial Integrity, March 27, 2017, https://gfintegrity.org/pressrelease/ transnational-crime-is-a-1-6-trillion-to-2-2-trillion-annual-business-finds-new-gfir-report/.

68 "Money Laundering," United Nations: Office on Drugs and Crime, https://www.unodc.org/unodc/en/money-la ... rview.html.

69 "Super Rich Hold $32 Trillion in Offshore Havens," Reuters, July 22, 2012, https://www.reuters.com/article/us-offs ... 3U20120722.

70 Michael C. Ruppert, Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil (New Catalyst Books, 2004), 60.

71 Chris Sanders and Catherine Austin Fitts, "The Black Budget of the United States: The Engine of a 'Negative Return Economy,'" World Affairs 8, no. 2 (April-June 2004), 29-30.

72 Kirkpatrick Sale, Power Shift: The Rise of the Southern Rim and Its Challenge to the Eastern Establishment (Random House, 1975), 86.

73 Gus Russo, Supermob: How Sidney Korshak and His Criminal Associates Became America's Hidden Power Brokers, 1st U.s. ed (New York: Bloomsbury, 2006), 16.

74 Russo, Supermob, 20.

75 On Patrick Hoy at the Hotel Sherman, see the Chicago Tribune, July 22, 1957, 52. Interestingly, the operator of the Hotel Sherman was famed hotelier Ernie Byfield. Byfield's son, Ernie Byfield Jr., served in the OSS. After he passed away, his wife remarried to Robert McNamara in 2004. "Ex-U.s. Defense Secretary Remarries, " AP News, September 16, 2004, https://aRnews.com/articie/7a9915a3b31 cd47f69ge07c586224518.

76 Jonathan Marshall, Dark Quadrant: Organized Crime, Big Business, and the Corruption of American Democracy: From Truman to Trump, Additional Endnotes (Lanham: Rowman & Littlefield, 2021), 28, https://rowman.com/WebDocs/Dark_Quadran ... _Notes.pdf.

77 Russo, Supermob, 37.

78 "New West," New West Communications, 1976, Volume 1, p. 27, https:/lwww.google.com/books/edition/New West/6SkcAQAAIAAJ?hl=en&gbpv=0.

79 Russo, Supermob, 202.

80 Jane Applegate, "The History of MCA," Los Angeles Times, November 27, 1990, https://www.latimes.com/archives/la-xRm ... story.html.

81 Russo, Supermob, 43.

82 Mike Barnes, "Edie Wasserman, Wife of Lew Wasserman, Dies at 95," The Hollywood Reporter, August 18, 2011, https://www.hollywoodreporter.com/news/ ... wasserman- wife-lew-wasserman-225101/.

83 Russo, Supermob, 204.

84 Russo, Supermob, 100.

85 Marshall, Dark Quadrant, 252-253.

86 Dan E. Moldea, Dark Victory: Ronald Reagan, MCA, and the Mob (New York, N.Y: Viking, 1987), 37.

87 Russo, Supermob, 231.

88 Moldea, Dark Victory, 254.

89 Russo, Supermob, 306.

90 Russo, Supermob, 100.

91 Scott, Deep Politics and the Death of JFK, 285.

92 "Trading Unit Bridges Foreign Exchange Gap," Los Angeles Times, September 24, 1947; "Foreign Trade: Idealism, Inc.," TIME, October 6, 1947, https://content/time.com/time/subscribe ... 40,OO.html.

93 Russo, Supermob, 68-9.

94 Russo, Supermob, 93.

95 David Cay Johnston. "Court Upholds Tax Evasion Ruling," New York Times News Service, February 4, 2007.

96 Gene Ayres and Jeff Morgan, "Pension Fund Loans Buy Luxury," Oakland Tribune, September 23, 1969.

97 Ayres and Morgan, "Pension Fund."

98 Russo, Supermob, 67.

99 Lee Dembart, "Teamster Pension Chiefs May Quit," New York Times, October 13, 1976, https://www.nytimes.com/1976/10/13/arch ... y-quit-11- trustees-of-teamsters-pension.html.

100 Russo, Supermob, 440.

101 Penny Lernoux, In Banks We Trust, 1st ed (Garden City, N.Y: Anchor Press/Doubleday, 1984), 80.

102 Alan A. Block and Constance A. Weaver, All Is Clouded by Desire: Global Banking, Money Laundering, and International Organized Crime (Connecticut: Praeger, 2004), 45.

103 Alan A. Block, Space, Time & Organized Crime, 2nd ed (New Jersey: Transaction Publishers, 1994), 354.

104 Martin A Lee and Bruce Shlain, Acid Dreams: The Complete Social History of LSD: The CIA, the Sixties, and Beyond (New York: Grove Press, 2007), 245.

105 Block and Weaver, All is Clouded By Desire, 40.

106 Block and Weaver, All is Clouded By Desire, 35.

107 Tom J. Farer, Transnational Crime in the Americas: An Inter-American Dialogue Book (New York: Routledge, 1999), 67.

108 Block and Weaver, All is Clouded By Desire, 42.

109 Subcommittee of the Committee on Government Operations, Oversight Hearings Into the Operations of the IRS, 1975, 917.

110 Victor Merina, "Two Promoters Indicted in Southland Land Fraud," Los Angeles Times, October 5, 1982.

111 Jim Drinkhall, "CIA Helped Quash Major, Star-Studded Tax Evasion Case," Washington Post, April 24, 1980, https://www.washingtonpost.com/archive/ ... ia-helped- quash-major-star-studded-tax-evasion-case/a55ddf06-2a3f-4e04-a687-a3dd87c32b82/.

112 "Fugitive Vesco Indicted In Drug Conspiracy," New York Times, April 18, 1989, https://www.nytimes.com/1989/04/18/us/f ... iracy.html.

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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

_______________

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.