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Peace Magazine Dec 1987-Jan 1988, page 6.

The Secret Team, Part I: The Secret's Out

By John Bacher
Last summer's Iran-Contra TV show, starring Ollie North, will be immortalized in the
Congressional Record, but nothing was resolved by the split decision. The issue was turned into:
Did Reagan know about the arms-for-hostage swap with Iran or that the profits were spent to arm
the Contras in Nicaragua? The actual story is far more horrifying. Neither the Tower
Commission nor the Congressional inquiry have revealed how much American foreign policy
has been run by a clique of neofascists in what John F. Kennedy called an "invisible
government."
Since the passage of the National Security Act of 1949, American foreign policy has been
divided in open and covert fields. In the covert field, mercenary wars are carried out, unfriendly
governments are secretly toppled, and narcotics are traded for guns to supply fascistic-minded
allies. During the past twenty-five years, these covert operations (as revealed by a law suit by the
U.S. Christic Institute, an interfaith, public interest law firm and public policy centre), have been
directed by a remarkably unknown 'Secret Team."
By John Bacher
Cuba, Laos, Cambodia, Thailand, Chile, Iran, Australia, Nicaragua...
The first gathering of the U.S. Secret Team was for the Bay of Pigs invasion and a super-secret
sub-operation, "Operation Mongoose" to assassinate Cuban revolutionary leaders. After attempts
to overthrow Castro were abandoned in 1965, such veterans of the Cuban adventure as Theodore
Shackley and Thomas Clines, along with future Contra fundraiser, Major General John Singlaub,
moved to direct the U.S. secret war in Laos. Shackley and Clines backed Van Pao, a major
opium trader. Drug money was used to train the Hmong tribesmen in political assassination:
Some 100,000 non-combatant "communist sympathizers" were assassinated in Laos, Cambodia,
and Thailand,. Shackley and Clines also directed the Phoenix program in Vietnam in 1974 and
'75 that murdered 60,000 non-Viet Cong civilian administrators. From 1971 to 1973, they also
directed the CIA's "Track II" strategy, aimed at overthrowing Allende's democratic government
in Chile. Here the Secret Team recruited the terrorist Arnac Galil from the Cuban military, who
would later try to assassinate Eden Pastora, the leader of a Costa Rican-based contra group who
refused to cooperate with the CIA-directed Contras.
After Vietnam, Shackley's Secret Team moved to Teheran, to help the Shah's secret police
assassinate opponents of the regime. After the Vietnam war; opium funds from Southeast Asia
were illegally deposited in the Australian Nugan Hand Bank, Shackley and Secret Team
members were implicated in destabilizing the Australian Labor Party government at this time. In
1978, no longer in government service under the Carter administration, Shackley and Clines
armed Nicaraguan dictator Anastasio Somoza after the U.S. government banned such aid, and
later advised Somoza's ex-National Guardsmen until this job was taken over by the CIA
following President Ronald Reagan's election. After Congress cut off Contra aid in 1984, Reagan
turned to the Secret Team to illegally fund the Contras.
Post-Bay of Pigs Terrorism and Drug Traffic
The heart of the Iran-Contra affair lies at the attempt to continue, under the National Security
Council, covert wars that were rendered difficult to carry out after Congress began monitoring
such actions in the wake of Watergate. Formerly, the Central Intelligence Agency, beginning in
1949, had a blank cheque to carry out any imaginable order of an American president. The
biggest fiasco of those cowboy days, the Bay of Pigs invasion of 1961, left a terrible legacy, the
Secret Team, responsible for the Iran-Contra cloak and dagger stunts.
Unlike its model, the covert CIA invasion of Guatemala of 1954, which led to brutal human
rights violations, the invasion of Cuba failed, leaving the American government with a problem -
- how to dispose of a secret army, trained in terror, assassination, and sabotage. Veteran CIA
officer, Ray Cline, himself a key player of the Secret Team, has observed that after training the
Cubans and putting them in business, it was "not that easy to turn them off." By the early 1970s,
American law enforcement officials estimated that at least eight per cent of the Bay of Pigs army
had been arrested for drug crimes. Others signed up for CIA missions; some participated in the
Watergate burglary, led by ex-CIA Bay of Pigs political officer E. Howard Hunt.
Despite Nixon's use of Cubans in Watergate, his administration actually pioneered in shaking off
the drug-financed covert terrorist actions characteristic of the "invisible government." Under
Nixon, CIA director James Schlesinger fired some 1,000 CIA covert warfare specialists. Another
600 were let go by Stansfield Turner in the Carter Administration. Nixon's break with the
extremists' dreams of using military force to overthrow Castro came in 1974, when Secretary of
State Henry Kissinger tried to establish normal diplomatic relations with Cuba. Orlando Bosch,
the leader of the Cuban terrorist organization, CORU, was even jailed in Costa Rica for plotting
to assassinate Kissinger during a 1976 visit. Throughout President Carter's efforts to normalize
relations, CORU conducted a campaign of terrorism. This terror was a dress rehearsal for the
Contra War, as it featured massive financial frauds and manipulations, for which the killing often
seemed to be a convenient pretext. Respected journalist Penny Lemoux points this out in her
book In Banks We Trust. Many of the kidnappings conducted by CORU of supposed Castro
sympathizers were simply shakedowns. The terrorists conducted twenty-five bombings in Miami
alone. After a Cuban airliner was bombed in 1976, killing 73 people, including the entire Cuban
fencing team, CORU succeeded in perpetuating conflict between the U.S. and Cuba. Castro
broke off talks for normalizing relations because of the wave of anti-Americanism that followed.
Hasenfus Spills the Beans
After the election of Ronald Reagan, the energies of the Cuban exiles were directed toward the
Contra War against Nicaragua. One CIA Cuban veteran, turned Contra trainer, Felix Rodriguez,
helped blow up a Spanish freighter trading with Cuba in 1964, and later interrogated Che
Guevara shortly before his murder in 1967. Another, Luis Posada, was removed from his post as
chief of Venezuelan intelligence after his links to the 1976 bombing of the Cuban airliner were
uncovered. Rodriguez and Posada were in charge of loading Eugene Hasenfus's supply plane
from the Ilopango air base in El Salvador. When the Sandinistas shot down the plane and
captured the pilot, Hasenfus told the international press that he worked for the CIA and that his
boss should help him get out of jail. He was freed by President Ortega.
The Contra War is characterized by the same combination of terrorism, lucrative drug deals, and
unobtainable objectives, as CORU's war against the Cuban government Two Nicaraguan
smugglers convicted in the largest cocaine seizure in the history of the U.S. West Coast, in 1985,
admitted they had passed drug profits to the Contras. A leading San Francisco fundraiser for the
Contras was identified in 1984 by the U.S. Drug Enforcement Administration as "the apparent
head of a criminal organization responsible for smuggling kilogram quantities of cocaine into the
United States." Former U.S. Ambassador to El Salvador, Thomas White, has charged the Reagan
Administration with attempting to kill an FBI inquiry into the Contras' drug ties. One convicted
smuggler admitted to flying 1,500 kilograms of cocaine from the farm of a CIA operative in
Costa Rica to the United States. CBS Evening News reported that at a 1980 drug trial in Costa
Rica, the government presented wire-tapped evidence showing "the drug dealers' ties to the top
level of Contra leaders in Costa Rica,"
The controversial arms sales to Iran, portrayed as an irrational departure from policy, actually fit
into a period of prolonged cooperation with that repressive regime.. During 1982-83, the CIA
helped pass along to Khomeini details on Tudeh Communist party activities, based on the
revelations of a KGB defector. Armed with this information, Khomeini's forces arrested or killed
4,000 Tudeh supporters and expelled eighteen KGB agents. Former U.S. Under-Secretary of
State, David Newon, even noted with satisfaction that "The leftists there seem to he getting their
heads cut off." Israel, the proxy for the U.S. arms shipments to Iran, continued to sell arms to the
Khomeini dictatorship even after the seizure of the U.S. Embassy. Their sales included spare
parts for US.-made FA Phantom jets. Profits from the covert Iranian sale, Washington Post
journalist Jack Anderson has reported, also went to Israel's foreign intelligence agency, Mossad,
for undercover operations abroad.
The Iran-Contra affair points to the sophistication needed by the peace movement to counter the
distortions of terrorism and narcotics smuggling that are used as a pretext to support wars around
the world. This is difficult for, as we learn from books such as The Iran Contra Connection:
Secret Arms and Covert Operations in the Reagan Era, moderate government officials have
supported absurd policies because of manipulation by reactionary extremists more interested in
making a killing in the drug trade than in political objectives.
One hopeful sign is the law suit now being organized by the Christic Institute. This Washington-
based organization was begun seven years ago by lawyer Daniel Sheehan and an interfaith group
anxious to apply the law to burning issues. It won favorable judgments in the Three Mile Island
investigation and the Karen Silkwood case, to name two. Sheehan has persuaded the
organization Trial Lawyers for Public Justice to donate the services of forty-five lawyers to
speed up the depositions of all those involved with the Secret Team. The case will take almost a
year to prepare, but the results may help restore democracy and justice to the U.S. government.
The Iran-Contra Connection-Secret Teams and Covert Operations in the Reagan Era, by
Jonathan Marshall, Peter Dale Scott, and Jane Hunter. South End Press, Boston, 1987. See also,
Veil: The Secret Wars of the CIA, 1981-1987, by Bob Woodward, General, 1987.
John Bacher works on land conservation in the Niagara area.

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Peace Magazine Feb-Mar 1988, page 10

The Secret Team, Part II: The Way of Pigs

This article is the second in a series on the influence of the "secret team" on American foreign
policy. The antics of this organization have recently come to public view as a result of the Iran-
Contra affair. It explains the events leading to the failed Bay of Pigs invasion, which set the stage
for drug trade-financed terrorist adventures in Southeast Asia, Australia, Chile, and Nicaragua.
By John Bacher
The origins of the Secret Team that organized the Iran-Contra affair lie in the invisible
government structure created by the U.S. National Security Council in 1947. This legislation
injected into the body of American constitutional politics a secret, paranoid, repressive apparatus
similar to those of fascist states and Stalin's despotism. Like the wartime Manhattan Project, the
secret agencies operating under the National Security Act had no accountability to Congress or to
the American public. They were only answerable to the President. An enormous mandate for
mischief was given the new Central Intelligence Agency by a highly ambiguous phrase, buried in
sub-section 102 of the Act. This gave the CIA authority to "perform such other powers and
duties related to intelligence affecting the national security as the National Security Council may
from time to time direct." At the first meeting of the National Security Council in December
1947, the original CIA covert operation was authorized. It was to be a massive program of
interference with the Italian elections of April, 1948. Along with statements to Italian voters
from Hollywood movie stars and funding of the Christian Democratic Party, this covert electoral
campaign had a more sinister hue: collaboration with the Mafia. Mafia gunmen actually
assassinated Communist Party leaders in Sicily, firing into the midst of the party's rallies. The
CIA's other European cold war antics had similar high- and low-brow directions. While funding
was given to the prestigious British intellectual journal, Encounter, Mafia henchmen were also
used to break a strike of the Communist-controlled Marseilles dockworkers' unions.
For every Communist-led front group, the CIA marshalled its own "free world" equivalent. To
rival the Communist-dominated International Union of Students and World Federation of Youth,
the CIA created its own World Assembly of Youth. The International Confederation of Free
Trade Unions was launched by the CIA to counter the Communist-dominated World Trade
Union Federation. Rival groups were also formed among journalists, lawyers and intellectuals.
Dulles Purges Communist Parties Of Moderates
CIA intrigue tended to divide opinion in the world into pro-American or pro-Soviet camps.
Despite the universalist claims of the ideologies of both blocs, both tended to view each other as
dominant in their respective spheres of influence. The CIA's Allen Dulles even used his Eastern
bloc contacts to purge Eastern European communist parties of their moderate, nationalistic
minded leadership. Under "Operation Splinter Factor" Dulles' double agent in the Polish secret
police, Josef Swiatlo, named prominent liberal Communists as CIA agents, based on their
cooperation with U.S. intelligence during World War Two in the struggle against Nazi Germany.
By 1951 some 169,000 Czech Communists were arrested-- ten percent of the entire membership.
Thousands more were arrested in Poland, East Germany and Bulgaria, with hundreds being
executed. Dulles, intending to discredit communism in the West, actually preferred oppressive
regimes in Eastern Europe to ones that tolerated pluralism. Similarly, rather than trying to
inflame the West to revolt, Soviets moved to strengthen the status quo. At the height of the
bitterly contested Italian elections, the USSR encouraged a desertion of the Communists by
demanding that Italy speed up its reparation payments and by taking Yugoslavia's side in a
dispute over Trieste.
In the early years, the American covert operations had little impact. They were directed against
Communist groups in the West that were already restrained by the Soviet leaders whose
commands they followed.
The Eisenhower administration, however, chose to use the CIA on tougher targets than the
Communist dissidents of the Western bloc. The CIA was now turned, with devastating force, on
the non-Communist democratic governments of Iran and Guatemala, giving these countries a
poisoned legacy of continuous domination by terrorist-minded elites.
Iran: Religious Fanatics And Paid Rioters
The Iranian government of Mohammed Mossadegh had enraged Britain by nationalizing that
country's oil monopoly in Iran. While the Americans under Truman initially supported the
staunchly anti-Communist Mossadegh, this soon changed after the British Foreign Secretary,
Anthony Eden, offered the Americans a share in Iran's oil. To destabilize Iran, the Americans
cooperated in a boycott led by oil multinationals. They cut off all foreign aid and froze the
foreign assets of its banks. This forced Mossadegh to reduce the military budget, curb feudal
dues and luxury imports and reduce the Shah's income, all of which encouraged upper class
Iranians to collaborate with the CIA. The CIA's principal collaborator, and future Prime
Minister, General Zahedi, had been interned by the British in World War Two for pro-Nazi
activities. The initial bumbling efforts of the Shah on American advice to dismiss Mossadegh for
Zahedi led to the Shah's exile and widespread rioting by Communists. Fearing a leftist coup,
Mossadegh was vulnerable to a CIA action involving the use of paid rioters to overthrow his
government. U.S. money paid bus and taxi drivers to convey the rioters. They were headed by
CIA agent Kermit Roosevelt, grandson of Teddy. After the rioters overturned Mossadegh, the
Shah and Zahedi returned.
In its clandestine coup, the CIA made allegiance with reactionary mullahs whose heirs it would
bargain with during the Iran/Contra arms deals. The coup laid the basis for the same clerical
terror which is now being waged by the Khomeini regime. An index of banned books was drawn
up. Former cabinet ministers were beaten, tortured, and killed. Unarmed students were murdered
in the Teheran University. The day on which Iran's parliament voted to ratify the American-
engineered split in its oil, 29 army officers loyal to Mossadegh were executed. Religious fanatics
went on a campaign of terror against the Ba'hai faith, whose temple in Iran was turned into a
headquarters for the military government.
THE CIA INVASION OF GUATEMALA
After using anti-Communism to seize Iranian oil, the Eisenhower administration used the same
cloak to maintain the United Fruit Company's hold on banana production in Guatemala. The
democratically elected Conservative government of President Jacobo Arbenz was bent on land
reform, and it was United Fruit's land that was being returned to peasants. Both Standard Oil of
New Jersey and United Fruit faced anti-trust actions. These were dropped under cold war
pretexts of national security.
The CIA's invasion of Guatemala involved one of the most reactionary, fascist-minded members
of the country's ruling elite. Colonel Castillo Armas, who earlier had tried to overthrow the
government, agreed to return the expropriated United Fruit lands, destroy the railway workers'
union, and establish a strong-arm dictatorship. The CIA created an army of 150 mercenaries in
Nicaragua, under the friendly eye of the Somoza dictatorship. Although the U.S. used anti-
Communism to justify its efforts, ex-CIA agent Phillip Agee would later reveal that the very
head of the Guatemala Communist Party, Carlos Manuel Pellecer, was himself a CIA agent.
Dulles fabricated an elaborate hoax that the Guatemala government was importing arms from
Czechoslovakia. The CIA's secret air force then actually bombed a British ship they believed was
carrying arms to Guatemala, which was only carrying cotton and coffee.
The small CIA mercenary army was able to overthrow the Guatemalan government, essentially
because its generals panicked in the face of the mercenaries' air superiority. The U.S. was
pleased with Castillo Armas's return of lands to the United Fruit Company, his awarding the
country's oil resources to foreign interests, and his removing taxes on foreign corporations. But
Allen Dulles and his brother, Secretary of State John Foster Dulles, were outraged that Armas
allowed dissidents to leave the country. They wanted them all to be executed.
The Bay Of Pigs: "Operation Success!"
The folly of the Bay of Pigs invasion can only be understood as a result of the over-confidence of
the CIA on the heels of its past victories of covert war. In a classic case of hubris, the CIA's
operation would be labelled, "Operation Success."
Like its Guatemalan and Iranian victories, the CIA attempted to topple Castro through an
alliance with the most fascist minded of thenation's elite, and was aided, as in its European
adventures, by an alliance with organized crime. American gangsters Meyer Lanksy and Santo
Trafficante had been central in establishing Batista's dictatorship in 1952. They were quickly
expelled after Castro's 1959 victory and their lucrative casinos shut down.
Many soldiers in the Bay of Pigs invasion force were recruited from Santo Trafficante's security
staffers, who had been long involved in cocaine and heroin smuggling. One recruiter was
Richard Cain, a former Chicago cop who became a close assistant of mobster Sam Giancana.
Two leading Cuban conspirators, Felipe de Diego and Rolando Martinez, would be later
involved in the Watergate burglary. Another, Orlando Bosch, would become synonymous with
terrorism. After the disastrous invasion, CIA activities against Cuba were given greater
manpower and expenditures. These were organized by CIA agent Theodore Shackley, who
commanded a force of 300 Americans and 4-6000 Cubans carrying out hit and run actions
against Cuban targets. One of its last operations was the smuggling of narcotics to the U.S.,
which led to the dismantling of the force.
Superficially a failure, the CIA covert war against Cuba was a success insofar as it forced
Cubans to rely on an alliance with the Soviet Union which, by restricting the scope of civil
liberties, diminished the appeal of the Cuban Revolution throughout Latin America. Castro's
movement had been initially alienated from the Communist Party which was under orders not to
rock the boat in the American sphere of influence. Rather than see the revolution go to the
graveyard with the government of President Arbenz of Guatemala, Castro embraced the Soviet
Union and his former Communist adversaries. Che Guevara himself had actively supported
Arbenz and was determined to avoid his fate; he thanked that experience for teaching "the
weakness that government was unable to overcome."
The United States was unable to impose a band of terrorists upon Cubans, as it had in Iran and
Guatemala. But as long as covert warfare remained part of U.S. foreign policy, extremists could
use anti-Communism as a license to terrorize and control in country after country. p
John Bacher, Ph.D.(History) is an archivist with Metro Toronto.
Two documentaries about the Secret Team were aired on CBC Radio's Sunday Morning by
Stephen Wadhams and Martha Honey. Tapes are available from CBC Sunday Morning, Box 500,
Station A, Toronto, M5W 1E6 at $20.00 per tape.

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Peace Magazine Apr-May 1988, page 9.

The Secret Team, Part III: Chaos in Laos

The Secret Team Enters South-East Asia
By John Bacher
More bombs were dropped on Laos between 1965 and '73 than the US had dropped on Japan and
Germany during World War II. More than 350,000 people were killed. The war in Laos was a
secret only from the American people and Congress. It anticipated the sordid ties between drug
trafficking and repressive regimes that have been seen later in the Noriega affair.
by John Bacher
AFTER THE CLOSING DOWN OF the United States's secret war in Cuba, CIA agents
Theodore Shackley and Tom Clines were sent eastward to set up a far more massive secret war
in Laos. Like its previous "Operation Success," "Mongoose" and "JM/Wave" assignments, the
team was presented with another "mission impossible" -- to prop up a reactionary U.S. client
state with little indigenous popular support. That the mission succeeded as well as it did, from
1965 to 1973, was only possible because of massive narcotics smuggling and saturation bombing
which tended to overshadow any national foreign policy objective.
Prior to the arrival of the Secret Team in Laos, the U.S. had a sordid history of the destruction of
neutralist Laotian governments with broad political support, since the country received its
independence from France in 1954. The CIA engineered coups in 1958, 1959, 1960, and possibly
on other occasions, as William Blum has documented in his The CIA: A Forgotten History. Such
manipulation had the effect of driving the Pathet Lao (Communist Party) out of the political
arena and into military conflict in alliance with North Vietnam. U.S. President John F. Kennedy
did have the intelligence to see the absurdity of this situation and obtained a coalition
government with the Pathet Lao backed by international agreement. This neutral regime was,
however, overthrown in 1964 by a right wing coup, giving effective control to reactionary
generals with close ties to the CIA.To stabilize this regime with so little popular support, the CIA
sent Theodore Shackley and Tom Clines to Laos in 1964.
Unlike the war in Vietnam, the secret war in Laos remained in the hands of the CIA and avoided
direct deployment of U.S. troops. This lack of American casualties tended to hide its massive
scale. After the war's end, the New York Times observed that "some 350,000 men, women and
children have been killed, it is estimated, and a tenth of the population of three million
uprooted." Between 1965 and 1973, more than two million tons of bombs were dropped on Laos
-- far more than the U.S. had dropped on both Japan and Germany during World War II. This
bombing was applied to all regions controlled by the Pathet Lao. A former American community
worker in Laos, Fred Branfam, described how "village after village was levelled, countless
people burned alive by high explosives, or by napalm and white phosphorous, or riddled by anti-
personnel bomb pellets." In order to wreck the economy in the Pathet Lao area, the U.S. dropped
millions in forged currency. At the end of the war in Laos, the Plain of Jars resembled a lunar
landscape marked by bomb craters,"stark testimony to the years of war that denuded the area of
people and buildings." Irrigation works collapsed and so many water buffalo had been killed in
the war that farmers had to harness themselves to the plows to till fields. Unexploded ordnance
are still killing and hampering food production. Such weaponry includes fragmentation weapons
with explosives and steel bits released from large canisters.
THE ROYAL LAO ARMY HAD PROVEN unreliable to prop up John Foster Dulles's puppet
American regimes in the '50s, which were often overthrown by nationalistic officers. Therefore
Shackley and Clines developed their own secret army, based on the discontented Meo tribal
minority and financed by the narcotics trade. Meo villages that refused to send troops to fight in
this secret army were bombed by the U.S. Air Force, as Noam Chomsky and Edward Herman
point out in After the Cataclysm. To suit U.S. strategic needs, villages were relocated. Besides
15,000 Meo tribesmen, the secret army included 15,000 mercenaries from Thailand, and U.S.-
trained soldiers from South Vietnam, Taiwan, South Korea and the Philippines. The New York
Times quipped that the "Secret Army" was secret only from "the American people and
Congress." American advisers killed in Laos were reported to have died in Vietnam.
ONE objective of Shackley and Clines was to monopolize the opium trade in Laos for their Meo
ally, Van Pao. In 1965 Van Pao's opium trafficking competitors were assassinated.
After the end of the Indochina war, the CIA admitted that "certain elements" of its war
organization had been involved in opium smuggling. As Henrick Kruger points out in The Great
Heroin Coup (Black Rose, 1980), the CIA was forced to admit this because of reports of
returning U.S. veterans. One report, by highly-decorated Green Beret Paul Withers, explained
that one of his main tasks had been "to buy up the entire crop of opium" of the Meo tribe. About
once a week an Air America (a CIA owned company) plane, he reported, "would arrive with
supplies and kilo bags of opium, which were loaded on the plane. Each bag was marked with the
symbol of the tribe." Air American flights were exempted from normal customs inspections. In
1971 some 60 kilos of heroin (worth $13.5 million) were seized from the briefcase of the chief
Laotian delegate of the World Anti-Communist League.
Shackley and Clines also developed a program to use their secret army for "unconventional
warfare" activities, including political assassinations. This is detailed in the lawsuit of the
Christic Institute. In 1966 a multi-service operation, the Military Assistance Command, Vietnam
-- Special Operations Group (MACV-SOG) was formed. From 1966-1968 this group supported
the assassination activities of the secret army and was commanded by future World Anti-
Communist League president and Contra fundraiser, General John K. Singlaub. Serving under
Singlaub in Laos in 1968 was the then Second Lieutenant Oliver North.
From 1968 to 1971 Theodore Shackley and Tom Clines supervised the Special Operations Group
in Laos. The secret army assassinated over 100,000 noncombatant villagers: mayors,
bookkeepers, clerks and other political figures in Laos, Cambodia and Thailand. These killings
established a foundation of terror for the Laotian government, undermined Prince Norodom
Sihanouk's efforts to steer a neutral course for Cambodia, and discouraged the growth of
democracy in Thailand. The style of terror resembled the random killings of Colonel Kurtz's
Montagnards in the film Apocalypse Now. Unfortunately movie watchers are deceived into
thinking such madness would bring official punishment instead of promotions.
The antics of the Secret Team in Laos would be a prelude to even more destructive activities in
Vietnam, where their program of narcotics smuggling and assassination would develop even
greater scope. This war was too massive to let the brunt of the fighting to fall to tribal minorities
and foreign mercenaries, causing America to officially enter Southeast Asia.
The U.S. client state's government became so deeply involved in illegal activities, such as the
heroin trade and thievery, that it more resembled an organized crime syndicate than a coalition of
conservative political parties. The terrorist operations of the Secret Team in Vietnam, such as the
infamous Phoenix Program, destroyed both the "third force" and the communist-led National
Liberation Front, tending to make the domination of the area by North Vietnam the inevitable
outcome of the conflict.
John Bacher (Ph.D., History) is a Metro Toronto archivist.

http://peacemagazine.org/archive/v04n3p10.htm

Peace Magazine Jun-Jul 1988, page 10.

The Secret Team, Part IV: Visiting Vietnam

By John Bacher
Vietnam epitomized the mindless destruction and unobtainable ends of the Secret Team. As in
Laos, the combination of massive bombing, tribal allies gulled by promises of greater autonomy,
and an imposed elite of collaborators enriched by the narcotics trade, only destroyed
alternatives to communist rule in the long run.
The CIA's shadowy activities in Vietnam were necessary to prepare American public opinion to
accept the commitment of ground troops to a foreign war. Its actions in this regard were
diabolically clever, William Blum in his book, The CIA, A Forgotten History, draws attention to
the confessions of Phillip Liechty, a former CIA officer. Liechty revealed he had seen the plans
to take large amounts of Communist bloc arms, load them on a Vietnamese boat, fake a battle,
and then call in naive reporters to see the "captured" weapons as proof of foreign assistance to
the Viet Cong. After this staged incident concerning the sinking of a "suspicious vessel" in
"shallow water" off South Vietnam on Feb. 16, 1965, the United States State Department
released a paper alleging aggression from the North. Liechty noted also an elaborate scheme to
forge Viet Cong postal stamps to indicate North Vietnamese aid; Life Magazine put the CIA
forgery on a full cover blow up.
THE CIA'S DRUG DEALING efforts in Vietnam began with a paradox, which underlay the
growing American colonization of the southern republic. The Americans' man in South Vietnam,
Ngo Dinh Diem, had come to power in 1955 by driving out the French-backed opium lords of
Saigon, involving violent confrontations with these gangsters. Soon, however, as Alfred McCoy
spells out in his book, The Politics of Heroin in South-east Asia, the nationalistic sounding Diem
had simply become an American puppet in place of the former French-backed emperor Bao Dai.
Unable to build a popular basis of support, Diem turned to the familiar means - a secret police
financed by the opium trade. From 1958 to 1960, Diem's security adviser, Ngo Dinh Nhu,
revived the opium trade and stationed agents in Laos and in the Corsican Mafia-controlled
commercial airline, Air Laos. From 1961 to '62, South Vietnamese Transport Groups smuggled
opium from Laos to South Vietnam.
McCoy outlines how, after Diem's ouster in 1963, the instability of South Vietnamese
governments largely stemmed from the inability of a single strong man to control the opium
trade. Competing power factions used different government institutions. Premier Khan used the
national police force. President Thieu used the navy customs and port authority. Vice-President
Ky was involved in smuggling operations using the air force. Ky directed one particularly
audacious "Operation Haylift," an American plan intended to fly agents into North Vietnam. It
ended up as a cover for gold and opium smuggling. These competing factions would frequently
arrest each other. George Robert, chief of the U.S. customs advisory team, complained in 1967
that it was impossible to distinguish between "honest actions and dishonest ones."
One of the high profile opium lords, General Loan, directed Ky's smuggling and at one point
intimidated South Vietnam's legislative assembly by invading it with armed guards. Thieu's man,
the infamous General Dang Van Quang (now living in Montreal) was exposed in a July, 1971
NBC News broadcast as the "biggest pusher" in Vietnam.
WHILE MANY AMERICAN MILITARY officers deplored the effects of the drug trade and
tried to combat it, such qualms were not shared by the Secret Team. With the Vietnam war
reaching its peak of escalation in 1968, Theodore Shackley was transferred from CIA Chief of
Station, to the same position in Saigon. Shortly after his arrival he arranged a meeting with his
former Cuban associate Mafia Chieftain Santo Trafficante and his Laotian ally Van Pao.
According to the Christic Institute, a partnership between the two led to Trafficante's becoming
the most important distributor of heroin in America. Henrik Kruger in The Great Heroin Coup,
notes that Trafficante went on a business trip in 1968 to the Far East, beginning in Hong Kong,
where he had located his emissary Frank Furci. Furci controlled the market on soldier's
nightclubs, mess halls and a chain of Hong Kong heroin clubs.
McCoy notes that, after Trafficante's visit, a Filipino ring delivered Hong Kong heroin to the
U.S. Mafia. This involved 1,000 kg of pure heroin equivalent to ten to twenty percent of all U.S.
consumption. These events coincided with an American-initiated shutdown of opium-growing in
Turkey, and the destruction of the "French connection" of Corsican Mafia smuggling more fled
to French than American foreign policy interests (See Kruger's book for details of this).
The suit of the Christic Institute elaborates on how the Trifficante-boosted South Vietnamese
drug trade provided the same basis for secret police repression under the Phoenix program as it
had under Diem. While critics of the suit, noting that Theodore Shackley was no longer station
chief in Saigon, imply that it made a slip, the suit is quite clear that both Shackley and Clines
directed it from Washington. Promoted for their secret activities in Cuba, Laos, and Vietnam, the
dynamic duo now served as Chief and Deputy Chief of the East Asia division of the CIA.
Directing all CIA covert operations in Southeast Asia, Shackley and Clines also controlled the
Phoenix program, which saw the assassination of some 60,000 village majors, treasurers, school
teachers, and other non-Viet Cong administrators. In 1971 CIA officer William Colby, Director
of Phoenix, was asked by a Congressmen, "Are you certain that we know a member of the VCI
from a loyal member of the South Vietnam citizenry?". Colby replied, "No, Mr. Congressman, I
am not," as William Blum points out in his book. Blum also cites the Congressional testimony of
U.S. military intelligence officer in Vietnam, K. Barton Osborn. Phoenix suspects were
interrogated in helicopters and then pushed out, Osborn noted. Electric shock until death was a
frequent tactic. All persons detained during tactical raids were routinely classified as Viet Cong.
Osborn said that none held for questioning were able to live through it.
Noam Chomsky in The Political Economy of Human Rights notes that the Phoenix system fell
more harshly on non-Communist dissidents than Viet Cong, who were better able to defend
themselves. By providing cash for murder, it encouraged vendettas against any foe of the
powerful in the country. All this slaughter simply worked to ensure the eventual domination of
South Vietnam by the Communist North, the complete mirror image of American rhetoric
justifying its intervention.
John Bacher , Ph.D. is a historian working in Toronto.

http://peacemagazine.org/archive/v04n4p14.htm
Peace Magazine Aug-Sep 1988, page 14.

The Secret Team, Part V: Cha Cha Cha!

Overthrowing Latin Democracies
By John Bacher
LEAVING A TRAIL OF BLOOD IN CUBA, LAOS, AND Vietnam, Theodore Shackley and
Thomas Clines were given a new assignment: the overthrow of the elected government of
Salvador Allende in Chile (See Heinrich Kruger, The Great Heroin Coup). Although their
mission was to prove more successful than their previous assignment, the consequences would
be equally tragic.
In 1972, Theodore Shackley and Tom Clines were elevated to CIA's Western Hemisphere
operations. Shackley became Chief and Clines his Deputy.
Some of the "dirty tricks" used by the CIA against Chilean democracy are well known. Others
involved overt pressure, such as the cutting off of all U.S. and Inter-American Development
bank loans, the end of all assistance from the World Bank, and the refusal of American suppliers
to sell needed parts for dependent Chilean copper, steel, electricity, and petroleum industries.
CIA disinformation tried to make military officers believe Allende was going to allow the USSR
and North Korea to establish submarine and training bases.
Besides scheming to destabilize democracy by fomenting economic crises, the CIA under
Shackley and Clines aided Chile's fascist organization, Patria y Libertad, and trained its members
as guerrillas in Bolivia and Los Fresnos, Texas. They marched into political rallies wearing riot
gear, engaged in violence, and in its publications openly urged a military coup.
Foes of the Pinochet dictatorship realize that it came to power by the massacre of 30,000
civilians. What they may not realize is that Patria y Libertad was aided as part of a general
imposition of fascist dictatorships in Latin America, supported by terrorist organizations funded
by the drug trade. Even Mexico, one Latin America's most stable, if not most perfect
democracies was threatened by one Secret Team extremist.
WHILE PREPARING FOR THE CHILEAN COUP, Shackley had all telephone conversations to
and from Latin America tapped, under pretext of narcotics control operations. One of Shackley's
colleagues was an old contact, Alberto Sicilia-Falcon, a Cuban exile trained by the CIA as part of
the Bay of Pigs invasion. While Shackley destabilized Chile, he established a gigantic heroin and
marijuana ring in Mexico, which involved 1,000 persons, including film stars and international
businessmen. After the overthrow of Allende, Sicila-Falcon sold guns and narcotics to spread
violence in Mexico. In 1975 Sicila-Falcon was arrested and confessed to being a CIA agent,
engaged in business to provide profits with which to buy ammunition for the destabilization of
"undesirable" governments. FBI documents later released under the Freedom of Information Act
revealed that the U.S. Embassy and U.S. Border Control had worked together "to help
destabilize" the Mexican government of the populistic President, Luis Echeverria. He was in a
conflict with the U.S. government over the World Bank and International Monetary Fund's plans
for Mexico's newly-discovered oil reserves. A memo from FBI director J. Edgar Hoover,
declassified by the Freedom of Information Act, actually praised "the detonation of strategic and
effective bombs in Mexico City" and "the wave of night machine-gunnings to divide subversive
leaders."
The successful overthrow of Allende and the botched attempt to remove Echeverria were a small
part of the Secret Team's terrorism in Latin America. They worked with extremists who
envisaged a new world order of a Fascist Iron Circle linking Argentina, Chile, Peru, Paraguay,
Bolivia, Brazil, and Uraguay, toward which Allende's overthrow represented but one step.
After the coup overthrew Allende, some terrorists moved to Argentina, while others went to
Europe. One key figure of this intrigue was Peronist Cabinet Minister Lopez Rega. He signed an
agreement between the U.S. and Argentina to wage a common war against drug trafficking,
while being himself the country's leading cocaine trader. Rega was a key figure in a death squad,
the Argentine Anti-Communist Alliance (AAA). He disguised such terrorist activities as
narcotics control, claiming the "Guerrillas are the main users of drugs in Argentina." He
contributed to the disorder which led the fragile democracy of Argentina to be overthrown by a
military dictator.
AIDED BY THE CHILEAN SECRET POLICE, THE Cuban exile drug-financed terror network
also hunted down foes of the Chilean dictatorship, such as former Chilean army Chief of Staff
Carlos Pratts and former Allende foreign minister Orlando Letelier. Terror was coordinated
between Argentina, Bolivia, Brazil, Paraguay, and Chile under the infamous Operation Condor.
Pratts, Leighton, and democratic Uruguayan and Argentinian politicians were assassinated, as
well as Bolivian General Joaquin Zenteno Anaya and Uruguay's Colonel Ramon Trabal in Paris.
A branch of the AAA opened in Spain to use terror in an effort to prevent the growth of Spanish
democracy.
Under the public guise of combatting drug trade and upholding democracy, American foreign
policy turned into a drug-financed international terror network in Latin America. p

http://peacemagazine.org/archive/v04n5p15.htm
Peace Magazine Oct-Nov 1988, page 15.

The Secret Team, Part VI: Who Did in the

Prime Minister?
Down Under with The Secret Team and a Bank
By John Bacher
This year we have reviewed the acts of a small, powerful group of right wing Americans with
ties to the CIA that were allowed by one U.S. administration after another to destabilize
governments around the world that they considered unfriendly to the United States. In this group,
"the secret team," two men have repeatedly been named as key participants
Thomas Olines and Theodore Shackley, who rose to become second-in-command, directing the
CIA's worldwide covert operations from its Virginia headquarters. This time around, we'll
review the pivotal part they played in the "constitutional coup d'etat" that overthrew the
government of Australia's Labor Prime Minister, Gough Whitlam. The story involves an
Australian-based international bank that failed -the Nugan Hand Bank. Only after its collapse
were key facts exposed about its complicated financial and drug-peddling activities.(For more on
the mystery surrounding this outfit read Jonathan Kwitny's, The Crimes of Patriots N.Y.: Norton,
1987.)
Nugan Hand Bank: A Theft Machine
The Nugan Hand Bank was founded in the early 1970s by Frank Nugan, an Australian who had
studied law for a while in Toronto, and Michael Hand, an American who had formerly fought
with the Green Berets in Vietnam and then had worked with the CIA airline, Air America.
In 1973, the Nugan Hand Bank quickly expanded from a $1 million capitalization to $1 billion. It
never did any banking, Jonathan Kwitny says, but it offered four main services - a way to flout
laws and move money overseas; tax avoidance schemes; extraordinarily high interest; and
international trade connections. Its staff included almost no real bankers, but top military and
intelligence officers, such as former CIA director William Colby, who was one of the bank's
attorneys. Soon it had offices in 22 countries, mostly Asian. As James Nathan pointed Out in a
Foreign Policy article, "Dateline Australia: America's Foreign Watergate," one of these branches
was in Chiang Mai, in northern Thailand, part of the Golden Triangle area where Thai-land,
Burma and Laos join. Chiang Mai is Opium City of the World. Kwitny discovered that the
Nugan Hand office in Chiang Mai had been lodged in what appears to be the same office suite as
the United States Drug Enforcement Administration office. The DEA receptionist answered
Nugan Hand's telephone when the bank's representatives were out.
The director of the bank's Chiang Mai office admitted on Australian television that they had
handled $2.6 million in six months. This money came from drug deals in the triangle. The bank,
he stated, was a laundry for Meo tribesman and other opium growers. In addition to drugs, the
Nugan Hand Bank was involved in various arms deals in Indonesia, Thailand, Malaysia, Brazil
and the whole Rhodesian government of Ian Smith.
The Bank was also involved in outright fraud. Its Saudi Arabian branch fleeced over $10 million
from Americans working there, says Penny Lernoux in In Banks We Trust.
Getting Whitlam
The Nugan Hand Bank was well placed to destabilize the government of Labor Party Prime
Minister Gough Whitlam. His government had conducted such outrages (to American minds) as
pulling troops out of Vietnam; ending conscription; supporting the Indian Ocean Zone of Peace
proposals; attacking the U.S. bombing of North Vietnam; and interfering with Australian
intelligence efforts to aid Indonesia's invasion of East Timor and the overthrow of Salvador
Allende in Chile.
The Bank helped finance a clever variety of bugging and forgery operations. Nugan Hand
transferred $24 million to the Australian Liberal Party through one of its many associated
companies. It tried to blackmail a cabinet minister investigating organized crime by opening up a
Swiss bank account in his name and threatening to leak the information. Twice during 1975 the
Whitlam government was damaged through sensational scandals broken open by mysterious
leaks to the press, forcing resignations of Cabinet ministers. As Kwitny notes, one of the
scandals, involving negotiations for an Arab loan, was based on documents later exposed as
forgeries. This "loan affair" was seized upon by the opposition Liberal Party as the excuse to
have the elected Senate hold up passage of the government's budget in order to provoke an
election through financial crises. Prime Minister Whitlam charged in a public statement that the
CIA was interfering with the domestic politics of his country.
Like Canadians, Australians have a Governor General. Normally, this is a non-political role.
However, the Australian Governor General, John Kerr (who had long ties to such CIA front
organizations as the Asia Foundation) saw a chance at this time to dismiss the Prime Minister,
and did so. Three days before this "constitutional coup," an ultimatum had been delivered to the
Washington representative of the Australian Security Intelligence Organization by Secret Team
leader Theodore Shackley. The authenticity of this message, sent on November 8, 1975, was
later confirmed by the Australian parliament. It warned Australian intelligence that if the
problems posed by Whitlam's government could not be resolved they did not see how "our
mutually beneficial relationships are going to continue."
Some Mysteries Remain Unanswered
In 1980, five years after the ouster of Whitlam's government, the Nugan Hank Bank collapsed,
$50 million in debt. Frank Nugan was found shot dead in his car, and Michael Hand disappeared
without a trace. Investigations by an Australian Royal Commission, as Lernoux documents, later
revealed that the bank had regularly transferred funds from Sydney to Southeast Asia for
payment of heroin shipments to Australia, which were sent in containers to the U.S. West Coast.
Thousands of smaller investors in the United States and Australia lost their life savings as a
result of the bank's collapse, although the Generals and intelligence agents associated with the
bank escaped unharmed.
Many mysteries remain unanswered. For example, although Frank Nugan's body was exhumed
for investigation, it is still uncertain whether he committed suicide or was murdered. It has not
been proven that any U.S. intelligence agency communicated with former Australian Governor
General John Kerr just before his dismissal of Gough Whitlam. While the fact has been well
established that Michael Hand and Theodore Shackley had contacts before Shackley retired from
the CIA, the nature of those contacts is a secret. Finally, whether Hand has been in contact with
the CIA since going missing, that too is a secret.
In fact, the CIA has denied everything. It issued this statement, for what it is worth: "The CIA
has not engaged in operations against the Australian Government, had no ties with the Nugan
Hand Bank, and does not involve itself in drug trafficking." And Nixon wasn't a crook.
John Bacher is a historian living in Toronto.