The Secret State
[Speech to the Massachusetts Libertarian Party on the 200th Birthday of the Bill of Rights, December 19, 1991.]
occasion of the two-hundredth anniversary of the Bill of Rights reminds us to be
very worried about the growth since World War Il of a national-security
oligarchy, a secret and invisible state within the public state.
The national-security state has come upon us not all at once but bit by bit over a span. of several decades. It is useful to review the episodes—the ones that are now known to us—through which the current situation evolved.
1945: The Gehlen Deal
Wild Bill Donovan of the wartime Office of Strategic Services, the OSS, proposed to President Roosevelt before the war was over that the United States should setup a permanent civilian intelligence agency, but military foes of Donovan leaked his plan to a conservative journalist, Walter Trohan, who exposed the idea in the Chicago Tribune and denounced it as an" American Gestapo."
But only a few weeks after this. after Roosevelt's death and the inauguration of Harry Truman. in the utmost secrecy, the Army was taking its own much more dangerous steps toward a quite literal American Gestapo.
Days after the Nazi surrender in May 1945, a US Army command center in southern Germany was approached by Nazi Brigadier General Reinhard Gehlen. Gehlen was the chief of the Nazi intelligence apparatus known as the FHO, Foreign Armies East. The FHO ran spy operations throughout East Europe and the Soviet Union during the war, and it remained intact during the late-war period when the rest of the Wehrmacht was crumbling. In fact, the FHO was the one part of the Nazi war machine that continued to recruit new members right through the end of the war. SS men at risk of war crimes charges in particular were told to join with Gehlen, go to ground, and await further orders.
Gehlen presented himself for surrender to the American forces with an arrogant, take-me-to-your-leader attitude and was for a few weeks shunted aside by GIs who were unimpressed by his demand for red-carpet treatment. But he had an interesting proposal to make and was soon brought before high-level officers of the Army's G-2 intelligence command.
Gehlen's proposal in brief: Now that Germany has been defeated, he told his captors, everyone knows that the pre-war antagonism between the Soviet Union and the United States will reappear. Who emerges with the upper hand in Europe may well depend on the quality of either side's intelligence. The Soviets are well known to have many spies placed in the United States and the American government, but the Americans have almost no intelligence capability in East Europe and the Soviet Union. Therefore, Gehlen proposes that the United States Army adopt the FHO in its entirety, including its central staff , as well as its underground intelligence units, several thousand men strong, throughout East Europe and the U.S.S.R. Thus, the FHO will continue doing what it was doing for Hitler that is, fighting Bolshevism—but will now do it for the United States.
The OSS was formally dismantled in the fall of 1945 at the very moment at which General Gehlen and six of his top aides were settling into comfortable quarters at the army's Fort Hunt in Virginia, not far from the Pentagon. For the next several months, in highly secret conversations, Gehlen and the U.S. Army hammered out the terms of their agreement. By February 1946, Gehlen and his staff were back in Europe, installed in a new village-sized compound in Pullach, from which they set about the business of reactivating their wartime intelligence network, estimated at between 6,000 and 20,000 men, all of them former Nazis and SS members, many of them wanted for war crimes but now (like the famous Klaus Barbie) protected through Gehlen's deal with the United States both from the Nuremberg Tribunal and the de-Nazification program.
Thus it was that the superstructure of the United States' post-war intelligence system was laid on the foundation of an international Nazi spy ring that had come to be the last refuge of SS war criminals who had no other means of escaping judgment. The Gehlen Org, as it came to be called by the few Americans who knew about it and needless to say, the United States Congress knew nothing of the Gehlen deal, and the evidence is strong that Truman knew very little about it continued to serve the United States as its eyes and ears on Europe and the U.S.S.R. until 1955. At that time, fulfilling one of the terms of the secret treaty of Fort Hunt in 1945, the entire Gehlen Org was transferred to the new West German government, which gave it the name of the Federal Intelligence Service, or BND, and which the descendants of General Gehlen serve to this day. The BND continued to serve as the backbone of NATO intelligence and is said to have supplied well into the 1960s something in the order of seventy percent of the NATO intelligence take.
This is the base upon which the U.S. intelligence system was founded. The National Security Act of 1947 reorganized the military and created the CIA, but the Gehlen Org was the base from which U.S. intelligence developed throughout the decades of the Cold War. I am not trying to imply here that Stalin was not a villain or that Soviet communism was not a threat to Europe. I am saying rather that everything American policymakers believed they knew about Europe and the U.S.S.R. on most reliable report well into the 1960s was sent to them by an intelligence network made up completely of Hitler's most dedicated Nazis. I believe this fact helps to explain how the American national-security community evolved the quasi-fascistic credo we can observe developing in the following incidents.
1945: Operation Shamrock
This program, set up by the Pentagon and turned over to the National Security Agency after 1947, was discovered and shut down by Congress in 1975. As a House committee explained in a 1979 report, Shamrock intercepted "virtually all telegraphic traffic sent to, from, or transiting the United States." Said the House report, “Operation Shamrock was the largest government interception program affecting Americans” ever carried out. In a suit brought by the ACLU in the 1978 to declassify Shamrock files, the Defense Department claimed that either admitting or denying that the Shamrock surveillance took place, never mind revealing actual files, would disclose "state secrets.'' A judicial panel decided in the Pentagon's favor despite the ACLU's argument that to do so was “dangerously close to an open ended warrant to intrude on liberties guaranteed by the Fourth Amendment.”
1945: Project Paperclip
This is perhaps the most famous of such programs but it is still not well understood. The U.S. Army wanted German rocket scientists both for its own interest in rocketry and to keep them out of the hands of the Soviets, who had the same ambitions. United States law forbade these scientists' entry into the U.S., however, because they were all Nazis and members of the SS, including the prize among them, Dr. Werner von Braun. The Army acted unilaterally, therefore, in bringing the rocket scientists to the United States as prisoners of war and defining the Redstone rocket laboratory in Huntsville as a POW compound. Later the Paperclip scientists were de- Nazified by various bureaucratic means and emplaced at the center of the military space program. What is not well understood is that hundreds of additional Nazi SS members who had nothing at all to contribute to a scientific program were also admitted. This included the SS bureaucrat who oversaw the slave labor efforts in digging the underground facilities at the Nazi rocket base on Peenemunde.
1947: Project Chatter
The U.S. Navy initiated this program to continue Nazi experiments in extracting truth from unwilling subjects by chemical means, especially mind-altering drugs such Mescaline This was at the same time that U.S. investigative elements detailed to the Nuremberg Tribunal were rounding up Nazis suspected of having experimented with "truth serums" during World War II. Such experiments are banned by the laws of war.
1948: Election Theft
New to the world and eager to learn, the CIA immediately began spending secret money to influence election results in France and Italy. Straight from the womb, it thus established a habit of intervention which, despite being rationalized in terms of the Red menace abroad, would ultimately find expression within the domestic interior.
The CIA picked up the Navy's Project Chatter and throughout the 1950s and '60s ran tests on involuntary and unwitting subjects using truth drugs and electro-magnetic fields to see if it could indeed control a subject's mind without the subject's being aware. This research continued despite the fact that the United States signed the Nuremberg Code in 1953 stipulating that subjects must be aware, must volunteer, must have the aid of a supervising doctor, and must be allowed to quit the experiment at any moment.
The CIA began opening all mail traveling between United States and the U.S.S.R. and China. HT/Lingual ran until 1973 before it was stopped. We found out about it in 1975.
1953: Operation Ajax
The CIA overthrew Premier Mohammed Mossadegh in Iran, complaining of his neutralism in the Cold War, and installed in his place General Fazlollah Zahedi, a wartime Nazi collaborator. Zahedi showed his gratitude by giving 25-year leases on forty percent of Iran's oil to three American arms. One of these firms, Gulf Oil, was fortunate enough a few years later to hire as a vice president the CIA agent Kermit Roosevelt, who had run Operation Ajax. Did this coup set the clock ticking on the Iranian hostage crisis of 1979-80?
1954: Operation Success
The CIA spent $20 million to overthrow the democratically elected Jacabo Arbenz in Guatemala for daring to introduce an agrarian reform program that the United Fruit Company found threatening. General Walter Bedell Smith, CIA director at the time, later joined the board of United Fruit.
1954: News Control
The CIA began a program of infiltration of domestic and foreign institutions, concentrating on journalists and labor unions. Among the targeted U.S. organizations was the National Student Association, which the CIA secretly supported to the tune of some $200,000 a year. This meddling with an American and thus presumably off-limits organization remained secret until Ramparts magazine exposed it in 1967. It was at this point that mainstream media first became curious about the CIA and began unearthing other cases involving corporations, research centers, religious groups and universities.
1960–61: Operation Zapata
Castro warned that the United States was preparing an invasion of Cuba, but this was 1960 and we all laughed. We knew in those days the United States did not do such things. Then came the Bay of Pigs, and we were left to wonder how such an impossible thing could happen.
1960–63: Task Force W
Only because someone still anonymous inside the CIA decided to talk about it to the Senate Intelligence Committee in 1975, we discovered that the CIA's operations directorate decided in September 1960: (a) that it would be good thing to murder Fidel Castro and other Cuban leaders, (b) that it would be appropriate to hire the Mafia to carry these assassinations out, and (c) that there would be no need to tell the President that such an arrangement was being made. After all, was killing not the Mafia's area of expertise?
It hardly seemed to trouble the CIA that the Kennedy administration was at the very same time trying to mount a war on organized crime focusing on precisely the Mafia leaders that the CIA was recruiting as hired assassins.
Two weeks after the Johnson administration announced the end of the JFK Alliance for Progress with its commitment to the principle of not aiding tyrants, the CIA staged and the U.S. Navy supported a coup d'etat in Brazil over-throwing the democratically elected Joao Goulart. Within twenty-four hours a new right-wing government was installed, congratulated and recognized by the United States.
1965: The DR
An uprising in the Dominican Republic was put down with the help of 20,000 U.S. Marines. Ellsworth Bunker, the U.S. ambassador, Abe Fortas, a new Supreme Court justice and a crony of LBJ's, presidential advisors Adolf Berle, Averill Harriman and Joseph Farland were all on the payroll of organizations such as the National Sugar Refining Company, the Sucrest Company, the National Sugar Company, and the South Puerto Rico Sugar Company—all of which had holdings in the Dominican Republic that were threatened by the revolution
1967: The Phoenix Program
A terror and assassination program conceived by the CIA but implemented by the military command targeted Viet Cong cadres by name—a crime of war. At least twenty thousand were killed, according to the CIA's William Colby, of whom some 3,000 were assassinated. A CIA analyst later observed "They assassinated a lot of the wrong damn people".
August 1967: COINTELPRO
Faced with mounting public protest against the Vietnam War, the FBI formally inaugurated its so-called COINTELPRO operations, a rationalized and extended form of operations under way for at least a year. A House committee reported in 1979 that "the FBI Chicago Field Office files [in] 1966 alone contained the identities of a small army of 837 informers, all of whom reported on [antiwar activists']…political activities, views or beliefs, and none of whom reported on any unlawful activities by [these activists]."
October 1967: MH/Chaos
Two months after the PBI started up COINTELPRO, the CIA followed suit with MH/Chaos, set up in the counterintelligence section run by a certifiable paranoid named James Jesus Angleton. Even though the illegal Chaos infiltration showed that there was no foreign financing or manipulation of the antiwar movement, Johnson refused to accept this, and the operation continued in to the Nixon administration. By 1971, CIA agents were operating everywhere there were students inside America, infiltrating protest groups not only to spy on them but to provide authentic cover stories they could use while traveling abroad and joining foreign anti-war group. Chaos was refocused on international terrorism in 1972, but another operation, Project Resistance, conducted out of the CIA Office of Security, continued surveillance of American domestic dissent until it was ended in June 1973.
April 1968: The King Plot
The assassination of Martin Luther King, Jr. led at once to massive urban riots, the breakup of the nonviolent civil rights movement and in ten years to a congressional investigation that found evidence of conspiracy, despite the initial finding that, as in the JFK case, the assassin was a lone nut. The conspiracy evidence included proof that the FBI had directly threatened King and that, in the certain knowledge that King was a target of violent hate groups, the Memphis Police Department had withdrawn its protective surveillance and let this fact be known.
June 1968: The RFK Hit
The assassination of Robert Kennedy came on the heels of his victory in the California presidential primary. This victory had virtually guaranteed his nomination as an antiwar presidential candidate at the Democratic convention in August. The assassinations of King and the second Kennedy were body blows to the civil rights and the antiwar movements and drove nails in the coffins of those who were still committed to the principles of democratic nonviolent struggle.
From now on there would be virtually nothing left of the organized movement except the Black Panthers and the Weathermen, both committed to violence and thus both of them doomed. The official verdict in Robert Kennedy's murder was, predictably enough, that it was the work of another lone nut. This conclusion was reached by a still-secret Los Angeles Police Department investigation, despite the fact that L.A. coroner Thomas Noguchi found that RFK's wounds were fired point blank behind him whereas the alleged assassin Sirhan Sirhan, by unanimous testimony of many eyewitnesses, never got his pistol closer to Kennedy than six feet and was always in front of him. It was true nevertheless, that Sirhan fired. It was also true that he was, and apparently remains, insane. Was Sirhan the offspring of Project Chatter and MK Ultra?
1969: Operation Minaret
This was a CIA program charted to intercept (according to a House Report) "the international communications of selected American citizens and groups on the basis of lists of names, 'watchlists,' supplied by other government agencies.…The Program applied not only to alleged foreign influence on domestic dissent, but also to American groups and individuals whose activities 'may result in civil disturbances...'"
April 1971: Helms protests
In a rare public speech to the American Society of Newspaper Editors, CIA Director Richard Helms asked the nation to "take it on faith that we too are honorable men devoted to her service." He went on to say, "We do not target on American citizens."
As though to give body to Helms' touching promise, seven CIA Operatives detailed to the Nixon White House played the same political game the CIA learned abroad in all its clandestine manipulations from France to Brazil, from Italy to Guatemala, but now in the context of U.S. Presidential politics. Whether through sheer fluke or a subtle counter-conspiracy, Nixon's CIA burglars were caught in the act, and two years later Nixon was therefore forced to resign. For a moment, a window opened into the heart of darkness.
1973: Allende Murdered
Frustrated in its 1970 efforts to control the Chilean election, the CIA resorted to murder once again in the elimination of Salvador Allende. Allende government official Orlando Letelier along with an American supporter, Ronnie Moffit, were also killed, not far away in Chile, but in Dupont Circle in our nation's capital
Late 1970s: "Defenders of Democracy"
As death squads raged through Latin America, FBI criminal as to go agents and U.S. marshals in Puerto Rico secretly created, trained and armed a super-secret police unit named "Defenders of Democracy" and dedicated to the assassination of leaders of the Puerto Rican independence movement. This was in the Jimmy Carter period. Did Carter know?
1980: October Surprise
The facts in this strange first act of the Iran-contra episode are still in dispute, but the charge made by Barbara Honegger, activist in the Reagan 1980 campaign, and by Carter national security aide Gary Sick, is of megascandal dimensions.
Honegger and Sick claim in outline that in 1980 William Casey, long-time U.S. super-spy but at that point without the least portfolio, led a secret Reagan campaign delegation to Europe to strike a secret deal with Iran, a nation with which the United States was virtually at war because of the 42 hostages Iran had seized from the U.S. embassy.
In the alleged deal, Iran agreed not to release the hostages until the U.S. presidential race was over, thus denying President Carter the political benefit of getting the hostages back. Reagan agreed that, if elected, he would help Iran acquire certain weapons. Well, for a few bucks here and there, too, of course, and something for Israel, but the basic deal was U.S. Arms for U.S. hostages held by Iran.
The basic deal was also so deeply criminal as to go beyond all statutes but those that deal with treason.
1970s and 1980s: The Noriega Connection
The CIA was exposed time and again throughout these decades in big-time international dope trafficking. This was not altogether new. Already in the late '60s we had discovered that this was happening in Southeast Asia, where the CIA's regional airline, Air America, was found deeply involved in the opium trade being run out of the so called Golden Triangle centered in Laos and involving Chinese drug lords associated with the anti-Communist Kuomintang. The ClA's support in moving large amounts of opium was valuable, it seemed, in maintaining good relations with our anti-Communist friends. In the 1970s and '80s, CIA drug operations appeared in this hemisphere for a related but even better reason: they were a convenient way to finance anti-Communist operations that the Congress would not fund.
The rash of drug cases around former Panamanian strongman Manuel Noriega—once a darling of the CIA until he dared oppose U.S. policy in Nicaragua—provides a glimpse into the true heart of the contemporary CIA. Noriega received as much as $10 million a month from the Medellin Cartel (whose profits were $3 million a day) plus $200,000 a year from the CIA for the use of Panamanian runways in transhipment of cocaine to the north.
Noriega is only in trouble today because he turned against the Reaganauts. The real attitude of Reagan and Bush toward drug trafficking is indicated much less in Noriega's trial itself than in the kind of deals the Justice Department is willing to make to convict him. According to a recent Boston Globe news story, federal prosecution have paid at least $1.5 million in "fees" for testimony against Noriega. In addition, some government witnesses have received freedom from life sentences, recovery of stashed drug profits and confiscated property,, and permanent U.S. residency and work permits for themselves and family members.
The best deals go to the biggest offenders, such as Carlos Lehder. Leader of the Medellin Cartel, Lehder was sentenced to 145 years in prison, but is probably facing a real sentence of less than five years on account of his collaboration against Noriega. He is said to have made a $10-million contribution to the contra cause.
The case of Floyd Carlton is also instructive. Carlton was a drug pilot whose testimony led to Noriega's indictment in 1988. He was allowed by Bush's prosecutors to transfer his cocaine profits into the U.S. tax-free. Bush also promised not to seize his various homes and ranches and agreed to pay $210,000 to support his wife, three children, and a nanny and to furnish them with permanent residence in the U.S. and work permits.
October 1986: The Enterprise
A contra supply plane was shot down in Nicaragua. A low-level CIA agent named Eugene Hassenfus was captured alive. Hassenfus chose not to make a martyr of himself, and thus was born the Iran-contra scandal, a continuation of the politics of the October Surprise but on a far grander scale. The CIA and the NSC were learning how to operate beyond the reach of American Law. With the "free-standing, off-the-books" organization they called "the Enterprise," capable of financing it's operations from drug profits and thus independent of the exchequer, The likes of Oliver North and John Poindexter and Theodore Shackley and Thomas Clines and Rafael Quintero and William Casey had it made. They could form U.S. policy pretty much by themselves, especially since the super- patriot Ronald Reagan seemed content to blink and doze. Who cared what Congress might think or say? As Admiral Poindexter put it so eloquently, "I never believed…that the Boland Amendment ever applied to the…National Security Council staff."
The main difference between the CIA's early Cold War scandals and the ones we are seeing today is that the more recent ones are immeasurably more complex. This is sharply true of our last two examples, one of which is that of the still emerging scandal around the Bank of Credit and Commerce International. The BCCI scandal appears to involve the CIA in a far-flung international financial network created for the primary purpose of laundering vast amounts of drug money and with the secondary purpose of ripping off the unsuspecting smaller banks that BCCI acquired in pursuit of its primary objective.
One fascinating aspect of the BCCI scandal is that it may at last supply us with the final solution of one of the outstanding riddles of the last decades—namely, why does the government insist on keeping drugs illegal since any fool can see that the only result of this is to keep the price of drugs high? Could this be because it is the secret elements of the Government—The CIA, the NSC, the Enterprise—that is actually selling them?
Finally, consider just briefly another case of astounding complexity, still not at all exposed, still writhing in the twilight—the case of Inslaw, Inc., involving the George Bush Justice Department and the death of Danny Casolaro, a free-lance investigative journalist with whom I happen to identify most closely, even though I never met him.
The story in brief: Inslaw, Inc. in the early 1980s was an enterprising computer software company whose most important product was a software program called Promis. Promis' appeal lay in the fact that it made it possible for Justice Department attorneys to keep track of an extremely large number of cases. The Justice Department bought Promis from Inslaw in 1982 and began installing it in its various offices.
Inslaw had completed nineteen installations of Promis within a year, and all seemed to be going well. But suddenly the Justice Department began to complain about Promis and soon was refusing to pay Inslaw, which therefore careened into bankruptcy.
The fact, however, was that nothing at all was wrong with Promis. Rather, the Justice Department—so it is alleged—had made a deal with Dr. Earl Brian, California health secretary under Governor Ronald Reagan. In this alleged deal—which Dr. Brian denies—the Justice Department would simply steal Inslaw's Promis software and give it to Dr. Brian, who—would then be in a position to sell it back to the Justice Department for an estimated $250 million.
Part of the reason the Justice Department was willing to do this for Dr. Brian, as the allegation continues, is that Brian had helped persuade Iranian leaders to cooperate with Reagan in the October Surprise operation of 1980.
But there's more to the allegation. The attempt to get Promis out of Inslaw's hands and into Dr. Brian's had two other purposes, according to Inslaw's attorney, Elliot L. Richardson. The first was "to generate revenue for covert operations not authorized by Congress. The second was to supply foreign intelligence agencies with a software system that would make it easier for U.S. eavesdroppers to read intercepted signals." That is, a back door access was built into the Promis software. Anyone who bought Promise was buying a Trojan Horse.
Danny Casolaro had talked to many of the informants in this case. Telling friends he was on his way to contact an informant who would put the last piece in the picture, he left his home in Washington in August l99l to travel to Martinsburg, West Virginia, where he took a hotel room and waited for the informant to contact him. Before leaving he had told his friends not to believe it if he died in a car accident.
He was found dead in his room, in the bathtub, with both arms slashed a total of twelve times. The Martinsburg police quickly ruled his death a suicide and allowed his body to be embalmed immediately, even before notifying his family of his death. His hotel room was cleaned of the least indication that he had been in it. His briefcase and his notes were never found. In his New York Times op-ed piece about this last October, Elliot Richardson ended by reminding his readers that he had called for a special prosecutor once before.
Richardson was the nominated Attorney General in 1973 and resigned in disagreement with Nixon, calling for a special prosecutor to investigate Watergate.
Now Richardson wants another special prosecutor to probe the Inslaw case. He believes Casolaro was murdered and that evidence points to "a widespread conspiracy implicating lesser government officials in the theft of Inslaw's technology." These same officials, of course, would also be involved in the apparent attempt to generate funding for illegal covert operations and to sneak Trojan Horse software into the systems by which other governments monitor their litigation caseloads.
We can be sure at least that the events we have briefly reviewed here are not isolated and separate. In the painful story that begins with General of the Third Reich Reinhard Gehlen and continues down to the death of Danny Casolaro, we face a stream of systemically connected abuses.
A secret state has set itself up within the darkest corners of the American government. It is what Nixon adviser John Dean called a cancer on the presidency, but it has metastasized well beyond the White House. It is not paranoia to call attention to this, but a simple act of realism.
 John Ranalegh, The Agency: The Rise and Decline of the CIA (New York: Simon and Schuster, 1987), p. 80.
 House Select Committee on Assassinations: Report, vol. Vlll, pp. 506-08.
 Linda Hunt, Secret Agenda (New York: St. Martins Press, 1990).
 Martin Lee and Bruce Shlain, Acid Dreams (New York: Grove Press, 1985).
 Ranalegh, p. 131.
 Ibid., p. 270.
 Ibid., p. 261-64.
 Ibid., p. 268.
 Ibid., p. 246, p. 471.
 Ibid., p. 440, p. 553.
 HSCA, vol. VIII, p. 524.
 Ranalegh, p. 534.
 The HSCA Report. Findings and Recommendations (Washington: U.S. Government Printing Office, 1979). See p. 407 re the FBI and p. 418 re the MPD.
 HSCA, vol. VIII, p. 507.
 Ranalegh, p. 281.
 See Boston Globe and New York Times stories of January 29, 1992.
 See Alfred McCoy, The Politics of Heroin in Southeast Asia (New York: Harper Colophon, 1973).
 Boston Globe, Dec. 13, 1991.
 Iran-Contra Trading Cards #35.
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