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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
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
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 supersecret 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. UnderSecretary 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 fortyfive 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.


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
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
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.
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
The Bay Of Pigs: "Operation Success!"
The folly of the Bay of Pigs invasion can only be understood as a result of the overconfidence 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.


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
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.


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. VicePresident 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 opiumgrowing 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.


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
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


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

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
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.