SNOW JOB: THE CIA, COCAINE, AND BILL CLINTON
Part 2: The Money Trail
How the CIA laundered millions in drug profits
from Mena and paid for Clinton's 1992 election campaign.
by John Dee
* * *
In part one of this article, we examined a CIA-supervised
cocaine smuggling operation based during the '80s in Mena, Arkansas. We also detailed
evidence of then-Governor Clinton's role in supressing evidnce, mishandling federal funds,
even blocking a congressional level investigation into the affair. While Clinton's
at-least tacit role in the Mena cover-up continues to this day (he has yet to authorize
any investigation into the charges), behind the scenes are highly secretive,
quasi-independent elements within the US intelligence community who are handling the
actual machinery. In a high level deal between the National Security Council and the
Medellin cartel, millions of dollars were paid to Felix Rodriguez, the CIA's commander at
El Salvador's Ilopango Air Base, and others (including Manuel Noriega) in exchange for
access to the CIA pipeline for Medellin cocaine. In this conclusion, we examine the secret
network which laundered the Mena drug money. We also find that these same covert bankers,
with close ties to BCCI, financed Clinton's 1992 presidential campaign. [It should be
noted that since the publication of part one, this writer has learned that Buddy Young was
appointed by Pres. Clinton to head the Dallas Regional Office of the Federal Emergency
Management Agency (FEMA). Young was Governor Clinton's chief of security, and the man who
framed Terry Reed for trying to quit the Mena operation. FEMA, of course, is the agency
empowered to sieze control of the country in the event of martial law.]
HIGH FINANCE
There is one estimate that Barry Seal ran as much as $100 million worth of cocaine a
month--$1.2 billion a year--through the Mena airbase.
Former Mena pilot Terry Reed has testified that large sums of money were being laundered
through leading Arkansas banks and bond brokers (a pattern of investment also being
examined by a federal investigator just as his researches were abruptly terminated).[1]
For a period, he says, satchels containing $10 million in laundered cash were airdropped
weekly at the airfield. These funds did not include other secret bank arrangements.
CBS News correspondant Bill Plante has said that there is trail of "tens of millions
of dollars in cocaine profits [from Mena], and we don't know where it leads. It is a trail
that has been blocked by the National Security Council."[2]
But despite the efforts of the NSC, there actually is a pretty good indication of where
the money went (beside's the Secret Team's pockets). Money from CIA drug smuggling
operations is known to have been laundered through BCCI, a massive transnational mega-bank
set up and run to launder "covert funds" for intelligence and criminal
clients.[3]
Coincidentally, BCCI has extremely deep roots in Arkansas. In fact, President Clinton has
ties with some of BCCI's top shareholders. Most of the money for Clinton's 1992 campaign
came from these people. They are the same people who were also raking in fortunes through
companies which were supplying the Mena operation. In plain words, President Clinton was
elected with money from CIA guns-and-drugs operations.
'COMPANY' PROPERTY & BIOWARFARE
One business in the CIA's Arkansas network was Park-on-Meter, or POM Inc. Based in
Russellvile, AR its current annual revenue is estimated at $18 million.[4]
Commercially, it produces parking meters and machine parts. Covertly, it was manufacturing
untraceable custom weapons parts for the Contras and shipping them to Mena. POM had
subcontracted the job from a CIA front called Iver Johnson's Firearms
(now bankrupt), of Jacksonville, AR.[5]
Former CIA scientist Michael Riconosciuto[6] has told reporters that he was closely
involved in these covert arms operations at POM. He claims that he supervised high-tech
equipment transfers to POM, and had developed software to help launder the Mena drug
money.[7]
He also says that POM manufactured external fuel tanks for C-130 transport planes.
This would have allowed the massive cargo planes to travel the long distances to Central
and South America.[8] He also claims to have worked on fuel-air explosives specifically
for use in the Contra war.[9] But Riconoscuito's most disturbing allegations concern his
work in developing chemical and biological weapons in a project connected to POM. He says
that in 1983 the company, in conjunction with the infamous "private" police
force Wackenhut and Stormont Laboratories in Woodland, CA, began production of the
delivery system for the new chemical and biological warfare CBW weaponry for use in the
Contra war.
He claims that POM was to receive chemical agents from the 354th Chemical Company of the
Army Reserve, located on property across from the corrugated barn housing the POM
facilities, for use in small explosive devices made with the same equipment POM used to
produce parking meters.[10]
When contacted by journalist Alexander Cockburn, Stormont Labs acknowledged only
"discussions" with Wackenhut about biological weapons. Wackenhut denied ever
working with POM.
POM pres. Seth Ward admitted that the company had defense contracts, but only for
"re-entry nose cones for the nuclear warheads on the MX missile and nozzles for
rocket engines," not CBW weapons. Ward also falsely denied that POM ever accepted any
money from the ADFA.
THE A.D.F.A.
Park-On-Meter was the first company to receive a loan from the Arkansas Development
Finance Authority (ADFA), receiving $2.85 million tax-free with low interest.
Growing out of a program offering low-interest loans for housing construction, the ADFA
was created by the state legislature at Clinton's urging in 1985.
Its ostensible purpose was to attract capital to the state for the purpose of economic
development, offering companies long-term loans financed through the sale of tax-exempt
bonds.[11] The ADFA took over much of the state's bond-issuing power and gave the governor
the ability "essentially to create money". The ADFA has no regulator and no
legislative oversight. The governor appoints the board and has the right to approve or
disapprove every bond issue. There is virtually no limit on the value of bonds that can be
issued. One financial advisor described this scenario as a "prescription for
abuse".[12]
The principle bond underwriter for the ADFA was Lasater & Company, founded in 1983 by
Dan Lasater. In just two years Lasater & Co. underwote $664 million in Arkansas bonds.
A child of poverty born in Indiana, Dan Lasater made his fortune when he founded
Ponderosa, a steakhouse chain that went public in 1971. He then moved to Little Rock, AR.
Lasater had close ties with Bill Clinton, through his friendship with Clinton's mother and
half-brother, Roger. By the early '80s, Lasater was known throughout Little Rock for
his extravagant parties and fast living. In 1982 he was one of the biggest contributers to
Clinton's election campaign, when he won back the governorship after a term out of office.
When Lasater formed his company in 1983, the firm became a frequent underwriter of
Arkansas municipal bond issues.[13] Then, in 1985 Clinton gave Lasater & Co. the ADFA
plum as a quid pro quo repayment for his campaign debt.
Terry Reed alleges in court documents and his recent book, Compromised:
Clinton, Bush and the CIA, (NY: S.P.I. Books, 1994), that Barry Seal made deposits of cash
from the Mena drug operation directly to Lasater & Co. Reed also says that Lasater
introduced Seal to him once as a client of his, although Lasater's attorney denies the
charge. This drug money laundering was in addition to services ADFA was providing to
channel large amounts of cash to POM and other companies. Former ADFA marketing director
Larry Nichols claims that no one was actually buying these bonds, that they were instead
sold to out-of-state banks, two with connections to BCCI. The losses from these junk bonds
were then mixed into the vortex of vanishing money in the S&L crisis.[14]
Nichols and other witnesses state that ADFA used BCCI branches in Florida and Georgia, as
well as Garfield Ridge Trust & Savings Bank in Chicago. That bank is partially owned
by indicted congressman Dan Rostenkowsi.[15] Other shady deals known to be made by the
ADFA included the transfer of $50 million into Fuji Bank in the Caymen Islands and using a
trading account belonging to Dennis Patrick to move another $50 million in junk bonds.[16]
Awash in drug money and good connections, Lasater became a heavy user of cocaine. The
noose tightened when his friend Roger Clinton, who was then working as Lasater's driver,
came under scrutiny by narcotics police. Lasater sent him to his Florida horse-farm to lie
low, but to no avail. The pair were eventually arrested and indicted on drug charges.
Lasater was charged with "social distribution" of drugs and sentenced to 2 1/2
years in prison. He served only six months, until Governor Clinton pardoned him. (Lasater
is now back in Little Rock and still active in business. His aptly-named Phoenix
Corporation has been bidding on assets being sold off by the Resolution Trust Company.
Some of these very S&Ls collapsed precisely because of Lasater & Co.'s illegal
bond trading.)
THE NAME OF THE ROSE
POM president/co-owner Seth Ward's brother-in-law is Webster ("Webb") Hubbell,
who served on POM's board during the early '80s. Later Webb Hubbell would become a partner
in the Rose Law Firm, the Little Rock firm which employed Hillary Rodham Clinton and is
currently at the center of the Whitewater scandal. While a partner at Rose, Hubbell served
as POM's lawyer on a number of cases, including a failed claim of patent infringement.
Hubbell co-wrote the documents which created the ADFA in 1985. He also represented Madison
Savings and Loan, owned by McDougal. Later, he served on the Resolution Trust Corporation
during its takeover of Madison. Hubbell neglected to inform the RTC of this conflict of
interest.[17]
Clinton appointed Hubbell as the Associate Attorney General, the number-three position in
the Justice Department (although he was viewed by many as the de facto head). In December
1993 he ordered a new FBI review of the death of Danny Casolaro and the Promis software
case. Only a month later Hubbell resigned under a cloud because of questions about his
role in Whitewater, and a question about $1 million owned by POM to the Rose firm.[18] His
resignation not only shielded him from other accusations related to Whitewater, but it
also served to get POM out of the headlines.
The names of Hubbell and the Rose law firm appear on the bond issues and loan agreement
papers for the largest contributions to Clinton's presidential campaign. The banks, which
extended several loans of more than $3 million, were all owned by a company named Stephens
Inc., which was also a primary underwriter of ADFA bonds. Stephens Inc. is owned by one
Jackson T. Stephens.
EMPIRE
The names of Jackson Stephens and his companies are virtually
synonymous with the economy of Arkansas, where the family owns a large chunk of more than
a dozen banks,
the most exclusive hotel in Little Rock, and the building that houses Bill Clinton's
Arkansas office.
The Stephens Group[19] is at the center of a multibillion-dollar empire. This includes
Stephens Inc, which is the largest brokerage firm outside of New York City. The
family-owned empire includes "a maze of offshore accounts,"[20] stretching to
the Middle East and Asia, with holdings that include hazardous waste incinerators in
Massachusetts and Ohio, the nation's largest nursing home operator, real estate
developments in the Midwest and South, oil and gas, a savings and loan in New Mexico, an
insurance company, a nationwide group of manufacturing companies, and a management company
for entertainers like Burt Reynolds.[21] Stephens Inc. has long been the major underwriter
and seller of municipal bonds in Arkansas, partially handling (though not managing) more
than 70% of the ADFA bonds alone.[22] It has also provided financing for firms such as
Wal-Mart Stores. Last year, the company acquired the Donrey Media Group for $500 million.
This company owns 53 daily newspapers, 71 non-dailies, outdoor advertising, TV
broadcasting and cable television companies.
Donrey is valued at about $950 million.[23] Thanks to Jackson's 37 year old son Warren, Stephens Inc. has investment banking offices in Atlanta, Dallas, Houston, San Antonio, and Kansas City. Some 240 banks in 21 states, including Wells Fargo & Co. and Nations-Bank Corp. now turn to the Stephens brokerage services. According to the New York Times, "for decades he [Stephens] has maintained close ties to Presidential administrations of both political parties." In fact, Jackson Stephens' Bal Harbor condo is neighbor to Senator Bob Dole's and former Speaker of the House Thomas P. O'Neill's.[24] Stephens also has a close personal relationship with Rose senior partner William H. Kennedy 3d, as well as with Bill and Hillary Clinton. No one else raised more money for Clinton's presidential bid, one which saw his campaign manager James Carville married to the Bush campaign manager, Mary Matallan. Amidst such strange bedfellows, perhaps it should not be so surprising that Stephens had been a life-long top Republican. He was a major contributor to George Bush and part of "Team 100", a Republican group where membership required a $100,000 donation to Bush's election campaign. His second wife, Mary Anne, was the 1988 co-chairman of the Bush for President drive.[25] (When Stephens divorced Mary Anne in 1991, he succeeded in getting the court records sealed.[26]) In fact, the Stephens family disliked Clinton, consistently bankrolling candidates who ran against him as governor. Reportedly, Witt Stephens (Jackson's brother) habitually referred to Clinton as "that boy." The Stephens clan evidently had a major change of heart when it appeared that George Bush's presidency was doomed and That Boy Bill was the likeliest successor. Jackson Stephens was also the main man behind the deal which secured a huge contract to drill oil in Bahrain for George Bush's son, George Jr.
The company, Harken Energy, never sank a well and
even at the time was millions of dollars in debt. Although Harken Energy continues to lose
money, Bush Jr. and the other directors of the company receive six-figure salaries and
generous stock options. Stephens was able to convince the Union Bank of Switzerland to
invest $25 million in Harken.[27] In 1984, the company was taken over by Alan Quasha,
whose father was deeply involved in the Nugan and Bank scandal in Australia. The bank was
founded and run by a team of covert operators who laundered billions in profits from CIA
drug smuggling out of Southeast Asia. (See The Crimes of Patriots (Touchstone, 1987) by
Jonathan Kwitny.) Bush Jr. has quite a number of companies through which he somehow makes
millions of dollars even though they never make a profit. Another such company was
appropriately called Arbusto Energy Co.[28] It's initial investor group included Bush
family cronies like James R. Bath and the likes of Saudi financier and BCCI frontman
Ghaith Pharaon, and major BCCI sharholder Khaled bin Mahfouz.
Interestingly enough, Jackson Stephens made a fortune off of BCCI.
BANK OF COKE & CLINTON
Fact: of the known BCCI assets in the US--approximately $60
billion--only $1.9 billion was ever located by investigators.
Fact: Despite pleading guilty to 31 felony counts--and the
missing $58.1 billion--BCCI paid only a simple $15 million fine in the United States, in a
deal offered by Attorney General Richard Thornberg in 1990. (Thornberg was succeeded by
William Pelham Barr, a "retired" CIA employee.)
And you could say Jackson Stephens had close ties to BCCI--he was the one who brokered the
very arrival of BCCI in America in 1977. He is an old friend of former Carter official
Bert Lance and was investment banker to Lance's National Bank of Georgia. Stephens
introduced Lance to Saudi billionaire Ghaith Pharaon (who, fronting for BCCI, would later
buy the National Bank of Georgia) and to BCCI founder Agha Hassan Abedi. SEC documents
show that Stephens also steered Abedi to take over First American Bankshares in Washington
DC.[29]
In 1990, another BCCI investor, Abdullah Taha Bakhsh, doubled his stake in Stephens'
Worthen National Bank to a $10 million share. Worthen National is a Stephens-owned bank
which extended a $3 million line of credit (at a lucrative rate of interest) to Clinton's
presidential campaign in January 1992. (The Stephens family itself donated $100,000 to the
Clinton campaign.) Later, Worthen became the Clinton campaign's depository for $55 million
in federal campaign funds.
Last year Worthen National and Stephens Inc. were under investigation by the Federal
Reserve last year for federal banking and antitrust violations. The investigation centered
in part around misleading documents filed to the Fed in 1984 by William H. Kennedy 3d.
Kennedy is now associate White House counsel and formerly the head of the Rose law firm.
And when former Whitewater special prosecutor Robert Fiske showed up in Little Rock,
Worthen had a mysterious fire in which important documents related to the case were lost.
BCCI & THE CIA
The congressional Iran-Contra committee noted that then-CIA
director William Casey wanted to establish an offshore entity capable of conducting
operations in furtherance of US foregin policy that was "stand-alone"--
financially independent of appropriated funds, and, in turn, congressional oversight.
Casey got his wish. The CIA was used BCCI and a complex offshore
financial system to set up its own unregulated, private, foreign policy apparatus.
In this way, it could ignore Congress and carry out its own political objectives
throughout the world.
There is no question that BCCI was intimately involved in
covertly funding the decade's most heinous secret wars. "Black funds" travelled
through BCCI for the Contra war, the Iranian-Israeli payoffs, and large covert wars in
Afganistan
and Angola.[30]
Since its inception in 1972, BCCI was born and bred to move
billions of dollars of blood money with no one seeing it. Time magazine wrote of the bank,
"Superlatives are quickly exhausted: it is the largest corporate criminal enterprise
ever."
Even enemies were apparently welcome at the trough. A 1987 intelligence report by the
French security services, later supported by US Congressional findings, stated that
"BCCI had commercial links with Abu Nidal and front companies set up to finance his
radical Palestinian group. The report also said Kuwaiti embassy officials paid $60 million
into Nidal's BCCI account in London in 1987.[31] (This would have been around the time of
the first Persian Gulf "Crisis", when Kuwaiti ships were reflagged as American
and escorted by US warships.) The bank also maintained "cozy relations" with
Libya, Syria, Iraq, and the PLO.
BCCI shareholder/frontman Abdul-Rouf Khalil is known to have
Saudi CIA connections, and frequents the office of the CIA station chief in Saudi Arabia.
The chief attorney for BCCI's powerful legal team was Clark
Clifford, a former Secretary of Defense and advisor to four presidents. His influence
stretched even into the Federal Reserve. When Clifford was tried and convicted for his
role in BCCI, Clinton himself pardoned him, ostensibly out of concern for the old man's
health.
Perhaps most significantly, the US Senate has investigated the role
in BCCI of former Director of Central Intelligence Richard Helms. Helms aided the 1978
takeover attempt of First American Bank on behalf of BCCI Ltd, Georgia (Stephens' bank
deal).[32]
Richard Helms was the Deputy Director of (covert) Operations at the CIA in the 1960s,
under Nixon. Not surprisingly, his projects included the Laos operation, which first
brought together the Secret team which would later wreak such havoc in the '80s.
Helms conducted the CIA's Chile campaign, climaxing with the assassination of Salvador
Allende and the installation of Pinochet's fascist military state.
Helms was then CIA Director in the '70s. He later served as the US Ambassador to Iran. He
joined the Shah's payroll and declared himself an agent of a foreign government after
retiring.[33]
FULL SERVICE BANK
Not surprisingly, the sprawling BCCI transnational bank network
has been directly
linked to the laundering of CIA drug money.
John Blum, a former chief special counsel for the Senate Foreign
Relations
Committee's investigation of BCCI chaired by John Kerry, disclosed that the US Dept. of
Justice "failed to act" on substantial evidence of money laundering, including a
Chicago operation that dated back to 1985.[34] Blum also said that in 1988 he met BCCI
employees in Florida who detailed drug-money laundering activities by the bank. He said
the Senate knew about the use of BCCI by Manuel Noriega to launder large sums of cash.
As part of the CIA drug network, Noriega received millions of dollars in kickbacks from
the Medellin cartel, laundering $90 million of it through BCCI.
His credit was such that BCCI executives routinely took him and his mistress out for
extravagant nights on the town, running up tabs of $100,000.[35]
According to Congressional testimony by Jose Blandon, the CIA had actually advised Noriega
to use BCCI as his bank. They themselves were paying an additional $200,000 a year into
his account there.
BCCI's Panama branch, in the words of Time magazine, also "systematically helped
Noriega loot the national treasury."[36]
HEROIN IN THE GOLD CRESCENT
BCCI's drug dealings stretched also into the Middle East.
Pakistan's finance minister, Sartaj Asis, revealed that local branches of BCCI had
laundered drug money for the CIA, channelled covert CIA aid to the Afghan resistance, and
also managed a multi-million dollar "slush fund" for covert operations.[37]
The CIA's Afghan effort was one of the largest of the post-WWII era.
Coincidentally, Afghanistan and Pakistan are two of the largest producers of heroin and
opium in the world. (As is the Bekaa Valley in Lebanon.) Thus they became part of the
CIA's global drug supermarket.
Even the Colombians showed up.
In what has been described as a "typical operation", a container ship from
Colombia docked at night in Karachi, Pakistan. On one particular night in April 1989,
"black unit operatives" paid $100,000 in bribes to Pakistan officials and then
directed the unloading of massive crates. Using cranes, the crates were put onto trucks
and taken to a secure airport where they were loaded onto an unmarked 707 jet. The loading
was supervised by an American CIA officer.[38]
From Karachi the plane flew to Czechoslovakia, electronically disguised as a Pakistan
International Airlines commercial flight. From Czechoslovakia the drug laden plane flew
into the United States.[39]
The network which supported these routine missions thus moved heroin from the "Golden
Crescent" and cocaine from South America through Europe and into the United States.
The routes closely parallel those used by the CIA since the 1950s to move heroin from the
Corsican mafia. The famous French Connection was a small fragment of the huge
international network set up in a deal between the CIA and gangster Lucky Luciano.
(For a superb history of the early days of CIA drug running, see The Great Heroin Coup
[South End Press, 1980] by Henrik Kruger.)
CONCLUSION
While Clinton is clearly a mere cog in the secret network, close examination of his
friends and backers repeatedly betrays their deep connections in some of the most heinous
covert operations in modern history. These include the smuggling of cocaine into the US by
government officials, the theft of billions of dollars through bank and S&L fraud,
top-secret bio-chemical warfare conducted against the civilian population of Nicaragua,
and campaigns of terror, framing, and even assassination.
Furthermore, there is evidence which points pretty clearly to CIA's rigging of the US
election in an operation which makes the October Surprise look like a game of tiddly
winks. Using drug profits and money stolen from BCCI and other corrupt banks, the CIA and
its co-conspirators actually paid for the election of a man ostensibly their rival. They
have gone from merely sabotaging US elections to installing their own to appear as a
rival.
The revelations of connections to the Casolaro "Octopus" are also profoundly
disturbing. There are, in fact, surprising similarities between the apparently unrelated
scenarios, all the way down to the fortuitous deaths of key witnesses and investigators,
most of whom showa surprising propensity for dying within Treasury Dept. jurisdiction.
This story is far from being fully told. It is this writer's opinion that the United
States is amidst a silent crisis which threatens to annihilate any vestige of
constitutional government, freedom, and privacy. The government's use of the Promis
software means that they have had the ability to track dissident populations--within the
US and abroad--to a degree previously left only to the most laughable science fiction.
This story, and the tentacles it could only touch upon, describes a nation--the most
powerful on earth--which has successfully been seized by a small army of blood thirsty
pirates. It is a coup d'etat of astounding proportions and astonishing efficiency, one
which begs a whole new definition of the word.
This is a story which makes one view the world through new eyes.
The question that remains: is Clinton a part of the Directorate, or is he himself a
mere--perhaps unwitting--pawn in an incredibly cynical plan to destroy democracy as we
know it this country?
SIDEBAR TO ARTICLE
L.J. DAVIS 'ASSAULT' A HOAX!
In part one of this article, we reported claims by _New Republic_ journalist L.J. Davis
that he was bludgeoned into unconsciousness and important papers related to his
investigation of Whitewater and Mena stolen. Davis, with the help of such high-profile
cheerleaders as the Wall Street Journal, claims his assault was part of a massive campaign
to silence (even murder) those who might be able to expose alleged high-crimes committed
by Clinton.
But new evidence has surfaced which thoroughly discredits Davis' story. Lies of Our Times,
in its June 1994 issue, reported:
According to reporting by Richard Fricker[1] in the New York
Observer on April 4, Davis had been drinking that night ("Off
the Record," p. 6). The Arkansas Democrat Gazette quoted the
bartender at Davis's hotel saying that Davis had been in the
bar for the four hours he claimed to be face down in his room
(Noel Oman, "Hotel Records, Writer's Claims Don't Jibe," April
11). Far more important than Davis's sobriety, however, Davis
himself told Fricker that the pages of his notebook were partially
torn, not missing. "I could have done it myself when I stuffed the
damn thing back in my shoulder bag," Davis told Fricker. Thus, even
if Davis were assaulted, the evidence for a political motive simply doesn't exist.
Similar tales of mysterious assaults against reporters
investigating Clinton have come from the likes of Gary Lane, reporter for Pat Robertson's
Christian Broadcast Network (CBN). CBN has documented ties to intelligence and propaganda
operatives of the CIA. At this writing, no further information about Lane's alleged trauma
has emerged. Indeed, journalists are not the only ones involved in the Mena story with
interesting friends and connections. Former ADFA employee Larry Nichols has proved to be a
tireless barker of all manner of outrageous claims against Clinton, including L.J. Davis'
hoaxed assault. As reported in Part 1, Nichols never officially left the CIA. It is quite
possible that he is a CIA disinformation agent acting under secret orders to implicate
Clinton in crimes real or imagined.
----
[1] Last year, Fricker wrote an excellent article for _Wired_ magazine which detailed the
Inslaw/Promis/Casolaro/Octopus story: "The INSLAW Octopus-- Software Piracy,
Conspiracy, Cover-Up, Stonewalling, Covert Action: Just another decade at the Department
of Justice."
ENDNOTES:
[1] Alexander Cockburn, "Chapters in the Recent History of Arkansas", Beat the
Devil [regular column],
Clinton Arkansas Connection
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