The Strength of the Wolf (69 page)

According to Fluhr, the CIA used Belk's account as a slush fund for foreign officials on its payroll. “Sometimes we were told to babysit people for the CIA while they were in town. One time it was a group of Burmese generals. They came to New York for a couple of days and when they weren't at the UN, they used the money in Belk's account to go on a shopping spree. They went down to the electronics shops on Canal Street and filled suitcases full of stuff.”

Like Irving Brown, the close friend of Corsican drug smuggler Maurice Castellani, the Burmese generals had been ushered through Customs without inspection, and one can imagine what they brought into America in those same suitcases!

Fluhr frowns. “One day Belk comes up to me and says, ‘It's the strangest thing: some days the account's got a million dollars in it; the next day it's empty and I can't pay the rent!' ”

While the CIA was busy suborning the FBN, it was also conspiring with Customs, and using Customs positions to cover its agents, at a time when Customs and the FBN were fighting for hegemony in Latin America and the Far East. Leading the charge on behalf of Customs was Dave Ellis, protégé of Al Scharff and a member of a secret, ruling clique within Customs. Having distinguished himself in the Holy War against the FBN, which started with the George White scandals of 1954, Ellis was rewarded with a transfer to Washington headquarters in 1959, where he reorganized the customs service's Investigations Branch. In 1961, he became the point of contact for domestic CIA operations. The Agency was responsible for these special investigations, but Customs units handled the bugging and wiretapping, and whatever else was needed. Ellis organized one special CIA unit in Houston, which had a covert budget of $25 million and operated out of Miami into Cuba. His prestige grew and, in 1965, Ellis became chief of operations at Customs. Meanwhile, Ernie Gentry had landed in Washington as Giordano's administrative assistant, and he and Ellis, old rivals from Texas, squared off at the highest echelons of their respective organizations. This was no easy task for Gentry, as Ellis believed the FBN was riddled with corruption.

By 1966, the FBN had been pushed to the brink of extinction through its bureaucratic wars with Customs, BDAC, and the FBI; by Andy Tartaglino's integrity investigation; and by the usual CIA shenanigans. But it was George Gaffney who inadvertently provided President Johnson with
a pretext for pushing the teetering Bureau into oblivion. The catalyst was Assistant US Attorney William Bittman's investigation of freewheeling Bobby Baker, LBJ's personal secretary in the Senate for eight years. Baker was being investigated for influence peddling and fraud, and LBJ was concerned that the inquiry might reveal, as some cynics believed, that he had made substantial profits from Baker's operations, including a sizable kickback for securing a $7 billion defense contract for the General Dynamics plant in Ft. Worth, Texas. Baker had gambling syndicate connections in Las Vegas, Chicago, Louisiana, and the Caribbean, and was even thought to have directed a prostitution and political blackmail ring that catered to the Washington elite. The investigation, obviously, was fraught with political perils, but Bittman managed to flip Baker's business associate, Wayne Bromley, and Bromley agreed to lure Baker into an incriminating conversation about his shady business deals.

As Gaffney recalls, “Bittman had gone to the FBI for assistance, but Hoover had declined to investigate Baker [so as not to antagonize LBJ]. So Main Justice came to us. Giordano was out of town, and I was acting Commissioner and I had no choice: the Treasury secretary had issued a letter directing that we cooperate with Justice. So I assigned Agent Johnny Thompson to do the job.”

An FBN agent since 1955, Thompson had spent his entire career in the Washington field office, doubling as the FBN's top technician and as an instructor at Treasury's technical aides school. As Thompson recalls, “When I was called into Gaffney's office, Bittman was already there with Bromley, and we wired him on the spot. I told Bromley not to turn the microphone on while he was in the airplane, then I caught another plane to Los Angeles myself.”

Then assigned to the LA office, Agent Richard E. Salmi says, “Late one afternoon Fred Dick came out of his office, pointed to five guys in the room and said, ‘All of you, help Johnny Thompson.' So the five of us went to the airport where we met Thompson, who gets off the plane with four KAL kits. A KAL kit is an attaché case with a tape recorder and earphones. It receives messages from a hidden microphone. Thompson didn't say who we're going to bug, only that someone was meeting someone in a hotel at eight o'clock, and that the guy was wired.

“Thompson broke us up into two-man teams and scattered us around the hotel, so we'd have the meeting covered. I went with Thompson and we checked in to a room; we set up our equipment near a window overlooking the lobby, and we waited, and after a while the machine activated and automatically turned on the tape. While I'm listening, I start scribbling
notes on a yellow legal pad. As I recall, Baker and Bromley were mapping out a business deal that had something to do with grain silos in Texas. It was about a twenty-minute conversation, and I took about six pages of notes, which turned out to be lucky, because as we found out at the trial, none of the KAL sets had worked, and my notes were the only admissible evidence.”

“This was all happening very fast,” Thompson says. “Baker and Bromley were supposed to be in the hotel lounge, but they went into the hallway instead. So we were set up in the wrong places. But we did have Salmi's notes, which enabled the Justice Department to prosecute.”

As a result of the FBN surveillance, Baker was indicted in 1966 for tax evasion and the misuse of campaign funds. Stunned, the Johnson administration drafted a bill restricting wiretaps on anyone but political subversives. Next, Senator Edward Long (D-MS) decided to hold hearings on illegal FBI wiretaps, and through his inquiry he came to learn of the FBN's safehouse activities on behalf of the CIA. Long asked Treasury under secretary Joseph Barr for an explanation, but Barr had no idea of what was going on behind his back. So, on 22 January 1967, Barr summoned the CIA's assistant deputy director of plans, Desmond Fitzgerald; MKULTRA boss Sid Gottlieb; the Treasury Department's General Counsel, Frederick Smith; the acting assistant secretary for law enforcement, True Davis; and Andy Tartaglino's boss at Main Treasury, undercover CIA officer Tony Lapham.
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Barr commenced the meeting by asking if the CIA was using the FBN as a cover for illegal domestic operations. Playing coy, the Agency men said the only activities they knew about were old ones, in which audio equipment had been loaned to the FBN for tests and then returned. They noted that Pete Niblo had been transferred to the San Francisco office in 1955, but they neglected to add that George White was setting up his little MKULTRA shop of horrors at the time. Though unaware of the MKULTRA Program, Barr confronted the CIA with the fact that audio equipment had been purchased by the FBN, “for CIA purposes” – at which point the disingenuous CIA officers checked their watches and said they had to go. A meeting to discuss that delicate issue was scheduled for the following day.
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At the 23 January meeting the CIA officers met alone with Treasury General Counsel Smith and admitted that they had given the FBN $20,000 worth of receivers and microphones. There was no indication that these were the KAL sets used in the Baker surveillance, nor was there any mention of Marty Pera's dalliance with Devenco in New York. Smith, however, did ask if the equipment was used by the FBN so the CIA could get around “jurisdictional troubles” with the FBI. He also inquired if it was true that
the FBN maintained “a lab” for the CIA on the West Coast. A deafening silence ensued, and a third meeting was hastily scheduled.

On 24 January, at the direction of Richard Helms (acting director of central intelligence since June 1966), Gottlieb met alone with Henry Giordano. According to Gottlieb, Giordano said that if the CIA wanted to avoid a flap, it ought to “turn the Long Committee off.” The meeting ended on a sour note, and the CIA decided to help LBJ and the FBI pull the plug on the FBN.

At a final meeting on 25 January, Gottlieb told Smith that the CIA had, in fact, given money to the FBN for a “pad” (not a lab), but that it was used only for FBN operations. Gottlieb admitted that the CIA had shared in the intelligence take and had “obtained information from the FBN on informant behavior … which was of obvious interest to us in connection with our own investigative work.” But, he added, the arrangement had been terminated in 1965.

Gottlieb's explanation satisfied Barr, Smith, and Senator Long, and by Tartaglino's account, Tony Lapham ordered him to shut down the New York MKULTRA pad shortly thereafter. As Art Fluhr recalls, “We gave the furniture to the Salvation Army, and took the drapes off the windows and put them up in our office.” And Tartaglino opened a more luxurious CIA safehouse on Sutton Place.

Like any CIA cover story, the one given to the Treasury officials and Senator Long was plausible enough, and the implications frightening enough, to subvert their investigations. The truth, however, is that the CIA was deeply involved in the drug business, at home and abroad. Guarding this dirty little secret was its motive for wanting to eradicate the FBN, which was rapidly expanding overseas and trespassing on the CIA's covert operations. But first the CIA had to protect its FBN assets, including incorrigible Sal Vizzini.

“When I got to Bangkok in 1963, it was the same thing as Turkey,” Vizzini explains. “I had to grease the foreign cops to send out crews, and when they were ready to make the case, I'd step in to supervise and take photos. So I put down in a report that I was in Chiang Mai when a seizure was made, even though I got there four hours later. You're not supposed to do that, but Siragusa had sent me to Thailand specifically to steal cases from Customs, so we could justify setting up an office in Bangkok. Then Charlie
found out about the CIA hit gun I'd found in his car in Italy, and that's when he forgot that he sent me to Thailand to sink Customs. Next thing I know I'm down from a twelve to an eleven. He also accused me of profiteering on the black market in Turkey, which was totally untrue. Hal Fiedler, the CIA officer in Istanbul, had asked me to buy, and later sell, some office equipment as a way of bringing certain police officials into his camp. None of the money went into my own pocket. But the last straw came when I stood up for Gene Marshall. I testified at his trial that I thought he'd been set up.”

Gaffney wanted Vizzini to stay in the FBN and accept a transfer to San Francisco, but the CIA told Vizzini to fade the heat. They said they'd take care of him, and when he resigned in June 1966, they helped him to get a job as police chief in South Miami. Vizzini was protected, as were other FBN agents, like Ike Feldman. But by 1967, the FBN's overseas contingent was stumbling onto more and more CIA drug deals, so the spooks decided to commandeer overseas drug law enforcement altogether. The decision was shared with the protected few, but everyone felt the impact, and not everyone liked the feeling.

FBN Agent John G. Evans, for example, was not happy with the way things were unfolding. A case-maker and a man of rock-solid integrity, Evans joined the FBN in 1955 and served continually in his hometown of Detroit until his transfer to Washington in 1966, where he became an assistant to enforcement chief John Enright. At this point in time, according to Evans, Giordano and Gaffney had argued over personnel assignments and were no longer on speaking terms.

“Headquarters was still very small,” Evans recalls. “There was a chief counsel, two lawyers, two inspectors, and Andy as liaison to Treasury. And there was a planning and research office under Ernie Gentry and Walter Panich, which kept watch over Customs and the BDAC deal.

“Enright had about 260 agents worldwide, but Cusack alone handled intelligence. Cusack had the foreign desk and worked with Schrier's International Group and the agents overseas. I had domestic enforcement, and my big problem was James V. Bennett, the director of the federal prison system. Bennett was complaining to federal judges that the prison system was overflowing with small-time drug violators, and that there were disciplinary problems as a result, all because of the Daniel Act. So the law was rewritten and Main Justice told the US Attorneys that, henceforth, they needed permission to proceed under the mandatory sentencing rule.

“My other problem was the CIA. Giordano sent Cusack to Australia, where the Mafia was moving in through the vegetable business, and while
he was gone I covered foreign operations; and that's when I got to see what the CIA was doing. I saw a report on the Kuomintang saying they were the biggest drug dealers in the world, and that the CIA was underwriting them. Air America was transporting tons of Kuomintang opium.” Evans glares angrily and says, “I took the report to Enright. He said, ‘Leave it here. Forget about it.'

“Other things came to my attention,” Evans adds, “that proved that the CIA contributed to drug use in this country. We were in constant conflict with the CIA because it was hiding its budget in ours, and because CIA people were smuggling drugs into the US. But Cusack allowed them to do it, and we weren't allowed to tell. And that fostered corruption in the Bureau.”

According to FBN enforcement assistant John Enright, “The deepest, darkest secret of the FBN was its relationship with the CIA. It was a legacy of Anslinger, who wanted to be a spy. That's why he accepted Andy Tartaglino like he did Charlie Siragusa. Siragusa was crude and unsophisticated, but was held in awe by Anslinger because of his CIA contacts. George White too.”

Enright sighs. “Vietnam was the worst. We called Air America ‘Air Opium.' Our office in Bangkok made a case on an Army major [Hobbs] who was caught with opium. But the major just disappeared, because the CIA was behind it.”