American Conspiracies: Lies, Lies, and More Dirty Lies That the Government Tells Us (15 page)

Sure enough, Ben-Menashe was soon squawking to reporters. He implicated Bush and Gates in the October Surprise. He talked of a secret American policy to send weapons through Chile to the Iraqis. (We're playing both ends against the middle again). The government of Israel tried to discredit Ben-Menashe as a fabricator, but
Associated Press
journalist Robert Parry uncovered internal Israeli documents proving he'd worked for an arm of their military intelligence for a decade (1977- 1987). So the Israelis had some egg on their face, but meantime both they and the White House were seeking out more friendly reporters. One of these was Steven Emerson, who wrote that he'd seen derogatory records on the “delusional” Ben-Menashe. But corroboration for what Ben-Menashe had to say did surface over time, including the Iraq weapons deal.
²³
A federal jury acquitted him of the charges at the end of 1990.

Also in 1990, PBS's
Frontline
aired a program on the October Surprise that included a sound bite of Reagan playing golf with Bush in Palm Springs and saying he'd “tried some things the other way” to free the hostages but that the details were “classified.” Oops, open mouth and insert foot, Mr. Former President. By now, there was enough outside pressure for the House of Representatives to form an October Surprise Task Force in February 1992. The fellow who chaired the committee was Lee Hamilton, a “bipartisan” Democrat who from then on always seemed to end up in charge of these types of investigations. Next time would be the Iran-Contra hearings that made Oliver North a household name. Then Hamilton would be vice chair of the 9/11 Commission, whose shoddy work we'll look at later. Now he's retired after serving 34 years in the House, but he's still on Obama's Homeland Security Advisory Council. I guess they need expertise in cover-ups—Freudian slip, I mean clandestine-ops.

The chief counsel for the House's October Surprise Task Force was a fella named Barcella, fresh from Larry's having been lead attorney for the Bank of Credit and Commerce International, or BCCI for short. BCCI had paid his firm more than $2 million to keep it shielded from investigations by the press or government agencies.
²⁴
When a reporter asked Barcella if he saw any conflict of interest, since BCCI had helped finance arms deals to Iran in 1983, Barcella accused the man of McCarthy-like behavior. Well, you won't find BCCI mentioned once in the Task Force's report. Even though, within days after William Casey became head of Reagan's CIA, BCCI officials along with Iranian banker Cyrus Hashemi set up two Hong Kong-based banks that were underwritten by $20 million in Iranian assets from the Shah's royal family.
²⁵
As for Barcella, he was “apparently quite sensitive to the interests of the U.S. intelligence community during his days as a federal prosecutor.”
²⁶

Given who was in charge, we shouldn't be too surprised at the task force's conclusions. In 1993, the House report found “no credible evidence supporting any attempt by the Reagan presidential campaign—or persons associated with the campaign—to delay the release of the American hostages in Iran.” Lee Hamilton noted that the vast majority of sources for the allegation were “wholesale fabricators or were impeached by documentary evidence.”
²⁷
Washington Post
columnist David Broder lauded Hamilton as the “conscience of Congress” for repudiating the accusations.

The Senate Foreign Relations Committee also conducted a small-scale investigation. They'd imposed travel restrictions on checking out leads in Europe, denied subpoena power, and claimed a shortage of funds. The Secret Service wouldn't allow any questioning of agents who might have gone with Bush to Paris. The Senate's report, issued on November 19, 1992, said the “vast weight of all available evidence” was that Bush never made that trip to cut a deal with Iran.

William Casey was dead by now, and his family decided not to supply any of his records. Donald Gregg, a member of Bush's NSC staff after working more than 30 years for the CIA, failed a lie-detector test on the matter, but the Senate committee would only say “that Gregg's response was lacking in candor.”
²⁸
The House found “credible” French intelligence sources about the Paris meetings, but still concluded somehow that it was all “baseless.”
²⁹

As for that report by the Russians, which ended up in Hamilton's hands two days before he was to announce the Task Force's conclusions, he instead took at face value a cable from an American Embassy official in Moscow that the report might be “based largely on material that has previously appeared in the Western media.” (Not the
Times
or the
Post
, I'll bet!) The Russians continued to insist that the intel was their own and reliable; they considered the report “a bomb” and “couldn't believe it was ignored .”
³⁰

There's one journalistic hero in all this, and it's Robert Parry. He just kept plugging away and, in 1984 after he uncovered Oliver North's role in the Iran-Contra story for
Newsweek
, he was awarded the George Polk Award for National Reporting. Pretty soon, though, he was persona non grata with the establishment media, so he started
Consortium News
as an online magazine dedicated to investigative reporting. He's also written several books, and he's still out there pitching for truth.

Most other journalists stayed the course with Lee Hamilton.
Newsweek
did a piece headlined: “The October Surprise Charge: Treason; Myth.”
The New Republic
called it “The Conspiracy That Wasn't.” The author of that piece was Steven Emerson, who is today considered one of our top authorities on Islamic extremists, their financing and operations. Since 9/11, he's given many briefings to Congress on Al Qaeda, Hamas, Hezbollah, and other networks. To say the least, he's a well-connected journalist.
³¹

I can't let this chapter go without talking a little about Bill Clinton's reaction to it all, after he defeated Bush to become president in 1992. Twice emissaries from Iran told members of his cabinet about those Republican contacts with Islamic radicals close to Khomeini. But Clinton turned away, or at least his team did, not wanting to open themselves to charges of playing politics. The Germans, as well, are said to have offered the Clinton Administration information from their Stasi intel files. But whatever they turned over, Clinton kept secret.
³²

I sometimes get a strange sense of déjà vu, when I think of how the Obama Administration now wants to put all of Bush-II's torture policies behind us.

“But what's important in this whole thing is that our policy has always been consistent . . .”

—Oliver North, interviewed on
Frontline: The Drug Wars
, PBS

One of the reasons I'm writing this book is because our country has such a short-term memory. How many of us recall that, as far back as 1972, a report of the National Commission on Marihuana and Drug Abuse recommended that possession of pot for personal use be decriminalized? And that was when Nixon was president! Later on, Jimmy Carter called for getting rid of penalties for small-time possession, but Congress stonewalled him. Since then, we've had another president (Clinton) who claimed he didn't inhale and our latest (Obama) admitting he took some tokes back in the day. Federal law still considers marijuana a dangerous illegal drug, although fourteen states have now enacted laws allowing for some use for medical purposes.

Let me cite a few statistics that I find mind-boggling. According to NORML, an advocacy group for legalizing marijuana, more than 700,000 of America's estimated 20 million pot-smokers got arrested in 2008. About
half
of the 200,000 inmates in our federal prisons are in there for drug-related offenses. Between 1970 and 2007, we saw a 547 percent increase in our prison population, mainly because of our drug policies. Of course, that's just fine with the new prison-industrial complex, where corporations are now running the show. We as taxpayers shell out $68 billion every year for prisons, and a lot of that ends up going into private contractors' pockets!
¹

Of course, they're not the only ones getting rich. Well-documented reports by Congress and the Treasury Department lead to the conclusion that American banks are “collectively the world's largest financial beneficiary of the drug trade.” Not including real estate transfers, there's an estimated inflow of $250 billion a year coming into the country's banks—which I suppose is welcomed by some as offsetting our $300-billion trade deficit.
²

We'll talk more about banks several times in this chapter, but I want to start with some history on our government's involvement with drug traffic. You want to talk hypocrisy? This sordid saga takes the cake. We started using drug lords like Lucky Luciano to help fight the Communists back during World War II. The OSS, predecessor to the CIA, had the Sicilian Mafia and the Corsican gangsters in Marseilles working with them, which enabled their “key role in the growth of Europe's post war heroin traffic ... which provided most of the heroin smuggled into the United States over the next two decades.”
³

The heroin epidemic that ravaged our cities during the fifties and sixties basically originated with the CIA out of Southeast Asia. Almost from the moment of their founding in 1947, the CIA was giving covert support to organized drug traffickers in Europe and the Far East, and eventually the Middle East and Latin America. During the Vietnam War—hold onto your hats!—heroin was being smuggled into this country in the bodies of soldiers being flown home, coded ahead of time so they could be identified at various Air Force bases and the drugs removed.
⁴

Toward the end of American involvement over there in 1975, a former Green Beret named Michael Hand arranged a 500-pound shipment of heroin from Southeast Asia's “Golden Triangle” to the U.S. by way of Australia. That's where Hand had set up shop as vice chair of the Nugan Hand Bank, which was linked by the Australian Narcotics Bureau to a drug smuggling network that “exported some $3 billion [Aust.] worth of heroin from Bangkok prior to June 1976.” Several CIA guys who later came up in the Iran-Contra affair (Ted Shackley, Ray Clines, and Edwin Wilson) used the Nugan Hand bank to channel funds for covert operations. By 1979, the bank had 22 branches in 13 countries and $1 billion in annual business. The next year, chairman Frank Nugan was found shot dead in his Mercedes, a hundred miles from Sydney, and the bank soon collapsed.
⁵
Two official investigations by Australia uncovered its financing of major drug dealers and the laundering of their profits, while collecting an impressive list of “ex”-CIA officers.

After the CIA's involvement with the Southeast Asian drug trade had been partly disclosed in the mid-1970s, and the U.S. left Vietnam to its fate, the Agency started distancing itself from its “assets.” But that only left the door open to go elsewhere. Which the Reagan Administration did big-time, to fund its secret war in Nicaragua. The 1979 Sandinista revolution that overthrew Anastasio Somoza, one of our favorite Latin dictators, was not looked upon fondly by Ronnie and his friends. He called the counterrevolutionary Contras “freedom fighters,” and compared them to America's founding fathers. In his attempt to get Congress to approve aid for the Contras, Reagan accused the Sandinista government of drug trafficking. Of course, Nancy Reagan had launched her “Just say no” campaign at the time, but I guess she hadn't given the word to her husband. After his administration tried to mine the Nicaraguan harbors and got a handslap from Congress, it turned to secretly selling missiles to Iran and using the payments—along with profits from running drugs—to keep right on funding the Contras. Fifty thousand lost lives later, the World Court would order the U.S. to “cease and to refrain” from unlawful use of force against Nicaragua and pay reparations.
⁶
(We refused to comply.)

The fact is, with most of the cocaine that flooded the country in the Eighties, almost every major drug network was using the Contra operation in some fashion. Colombia's Medellin cartel began quietly collaborating with the Contras soon after Reagan took office. Then, in 1982, CIA Director Casey negotiated a little Memorandum of Understanding with the attorney general, William French Smith. Basically what this did was give the CIA legal clearance to work with known drug traffickers without being required to report it, so long as they weren't official employees but only “assets.”
⁷
This didn't come out until 1998, when CIA Inspector General Frederick Hitz issued a report that implicated more than 50 Contra and related entities in the drug trade. And the CIA knew all about it. The trafficking and money laundering tracked right into the National Security Council, where Oliver North was overseeing the Contras' war.
⁸

Here's what was going on behind the scenes: In the mid-1980s, North got together with four companies that were owned and operated by drug dealers, and arranged payments from the State Department for shipping supplies to the Contras. Michael Levine, an undercover agent for the DEA (Drug Enforcement Administration), later said that “running a covert operation in collaboration with a drug cartel ... [is] what I call treason.” The top DEA agent in El Salvador, Celerino Castillo III, said he saw “very large quantities of cocaine and millions of dollars” being run out of hangars at Ilopango air base, which was controlled by North and CIA operative Felix Rodriguez (he'd been placed in El Salvador by Vice President Bush's office, as a direct overseer of North's operations). The cocaine was being trans shipped from Costa Rica through El Salvador and on into the U.S. But when Castillo tried to raise this with his superiors, he ran into nothing but obstacles.
⁹

Early in 1985, two
Associated Press
reporters started hearing from officials in D.C. about all this. A year later, after a lot of stonewalling by the editors, the AP did run Robert Parry and Brian Barger's story on an FBI probe into cocaine trafficking by the Contras. This led the Reagan Administration to put out a three-page report admitting that there'd been some such shenanigans when the Contras were “particularly hard pressed for financial support” after Congress voted to cut off American aid. There was “evidence of a limited number of incidents.”
¹⁰
Uh huh. It would be awhile yet before an Oliver North note surfaced from July 12, 1985, about a Contra arms warehouse in Honduras: “Fourteen million to finance came from drugs.”
¹¹

Also in 1986, an FBI informant inside the Medellin cartel, Wanda Palacio, testified that she'd seen the organization run by Jorge Ochoa loading cocaine onto aircraft that belonged to Southern Air Transport, a company that used to be owned by the CIA and was flying supplies to the Contras. There was strong corroboration for her story, but somehow the Justice Department rejected it as inconclusive.
¹²
Senator John Kerry started looking into all this and said at one closed-door committee meeting: “It is clear that there is a network of drug trafficking through the Contras. ... We can produce specific law enforcement officials who will tell you that they have been called off drug trafficking investigations because the CIA is involved or because it would threaten national security.”
¹³

All this, remember, while we're spending millions supposedly fighting the “war on drugs,” a phrase first coined by Nixon in 1969. If you want the ultimate double standard, here's what was happening simultaneously in '86. After Len Bias, a basketball star at the University of Maryland, died of a supposed cocaine overdose (even though the coroner found no link between his sniffing some coke and the heart failure), Congress proceeded to pass the Anti-Drug Abuse Act. Up until this time, through the entire history of America, there had been only 56 mandatory minimum sentences established. Now, overnight, there were 29 more. Even for minor possession cases, you couldn't get parole. They established a 100-to-1 sentencing ratio for cheap crack cocaine (used more by African-Americans) over the powder variety (favored by Hollywood types).
¹⁴
This was at the same time we were
knowingly
allowing crack to be run into this country as part of financing the Contras—but we'll get to that in a moment.

What became known as the Iran-Contra affair came to light in November 1986. We were selling arms to Iran, breaking an arms embargo, in order to fund the contras. Fourteen Reagan Administration officials got charged with crimes and eleven were convicted, including Secretary of Defense Caspar Weinberger. Of course, Poppa Bush pardoned them all after he got elected president. And do you think a word about drug-running came up in the televised House committee hearings that made Ollie North a household name? Fuhgedaboutit.

The thousand-page report issued by Senator Kerry about his committee's findings did discuss how the State Department had paid more than $800,000 to known traffickers to take “humanitarian assistance” to the Contras.
¹⁵
The
New York Times
then set out to trash Kerry in a three-part series, including belittling him for relying on the testimony of imprisoned (drug-running) pilots.
¹⁶
The
Washington Post
published a short article heavy on criticisms against Kerry by the Republicans.
Newsweek
called him “a randy conspiracy buff.” (Wonder what they were snorting.)

But are we surprised? In 1987, the House Narcotics Committee had concluded there should be more investigation into the Contra-drug allegations. What was the
Washington Post
's headline?: “Hill Panel Finds No Evidence Linking Contras to Drug Smuggling.” The paper wouldn't even run Chairman Charles Rangel's letter of correction! That same year, a
Time
correspondent had an article on this subject blocked and a senior editor privately tell him: “
Time
is institutionally behind the Contras. If this story were about the Sandinistas and drugs, you'd have no trouble getting it in the magazine.”
¹⁷

The list of government skullduggery goes on, and it's mind-boggling. Remember when Poppa Bush ordered our military to invade Panama back in 1990? The stated reason was that its leader, Colonel Manuel Noriega, had been violating our laws by permitting drugs to be run through his country. In fact, Noriega had been “one of ours” for a long time. After Noriega was brought to the U.S. and convicted by a federal jury in Miami and sentenced to 40 years, filmmaker Oliver Stone went to see him in prison. There Noriega talked freely about having spied on Castro for the U.S., giving covert aid to the Contras, and visiting with Oliver North.
¹⁸
Noriega and Bush Sr. went way back, to when Bush headed the CIA in 1976. The brief prepared by Noriega's defense team was heavily censored, but it did reveal significant contact with Bush over a 15-year period. In fact, Bush had headed up a special anti-drug effort as vice president called the South Florida Task Force, which happened to coincide with when quite a few cargoes of cocaine and marijuana came through Florida as part of the Contra-support network. So why did we finally go after Noriega? Some said it's because he knew too much and was demanding too big a cut for his role in the Agency's drug-dealing.
¹⁹