A Long History of America’s Dark Side

A Long History of America’s Dark Side

By Peter Dale Scott and Robert Parry
October 7, 2010

Editor’s Note: Many Americans view their country and its soldiers as the “good guys” spreading “democracy” and “liberty” around the world. When the United States inflicts unnecessary death and destruction, it’s viewed as a mistake or an aberration.

In the following article – cobbled together from previous stories published at Consortiumnews.com – Peter Dale Scott and Robert Parry examine the long history of these acts of brutality, a record that suggests they are neither a “mistake” nor an “aberration” but rather conscious counterinsurgency doctrine on the “dark side”:

There is a dark — seldom acknowledged — thread that runs through U.S. military doctrine, dating back to the early days of the Republic.

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This military tradition has explicitly defended the selective use of terror, whether in suppressing Native American resistance on the frontiers in the 19th Century or in protecting U.S. interests abroad in the 20th Century or fighting the “war on terror” over the last decade.

The American people are largely oblivious to this hidden tradition because most of the literature advocating state-sponsored terror is carefully confined to national security circles and rarely spills out into the public debate, which is instead dominated by feel-good messages about well-intentioned U.S. interventions abroad.

Over the decades, congressional and journalistic investigations have exposed some of these abuses. But when that does happen, the cases are usually deemed anomalies or excesses by out-of-control soldiers.

But the historical record shows that terror tactics have long been a dark side of U.S. military doctrine. The theories survive today in textbooks on counterinsurgency warfare, “low-intensity” conflict and “counter-terrorism.”

Some historians trace the formal acceptance of those brutal tenets to the 1860s when the U.S. Army was facing challenge from a rebellious South and resistance from Native Americans in the West. Out of those crises emerged the modern military concept of “total war” — which considers attacks on civilians and their economic infrastructure an integral part of a victorious strategy.

In 1864, Gen. William Tecumseh Sherman cut a swath of destruction through civilian territory in Georgia and the Carolinas. His plan was to destroy the South’s will to fight and its ability to sustain a large army in the field. The devastation left plantations in flames and brought widespread Confederate complaints of rape and murder of civilians.

Meanwhile, in Colorado, Col. John M. Chivington and the Third Colorado Cavalry were employing their own terror tactics to pacify Cheyennes. A scout named John Smith later described the attack at Sand Creek, Colorado, on unsuspecting Indians at a peaceful encampment:

“They were scalped; their brains knocked out; the men used their knives, ripped open women, clubbed little children, knocked them in the head with their guns, beat their brains out, mutilated their bodies in every sense of the word.” [U.S. Cong., Senate, 39 Cong., 2nd Sess., “The Chivington Massacre,” Reports of the Committees.]

Though Smith’s objectivity was challenged at the time, today even defenders of the Sand Creek raid concede that most women and children there were killed and mutilated. [See Lt. Col. William R. Dunn, I Stand by Sand Creek.]

Yet, in the 1860s, many whites in Colorado saw the slaughter as the only realistic way to bring peace, just as Sherman viewed his “march to the sea” as necessary to force the South’s surrender.

The brutal tactics in the West also helped clear the way for the transcontinental railroad, built fortunes for favored businessmen and consolidated Republican political power for more than six decades, until the Great Depression of the 1930s. [See Consortiumnews.com’s “Indian Genocide and Republican Power.”]

Four years after the Civil War, Sherman became commanding general of the Army and incorporated the Indian pacification strategies — as well as his own tactics — into U.S. military doctrine. Gen. Philip H. Sheridan, who had led Indian wars in the Missouri territory, succeeded Sherman in 1883 and further entrenched those strategies as policy. [See Ward Churchill, A Little Matter of Genocide.]

By the end of the 19th Century, the Native American warriors had been vanquished, but the Army’s winning strategies lived on.

Imperial America

When the United States claimed the Philippines as a prize in the Spanish-American War, Filipino insurgents resisted. In 1900, the U.S. commander, Gen. J. Franklin Bell, consciously modeled his brutal counterinsurgency campaign after the Indian wars and Sherman’s “march to the sea.”

Bell believed that by punishing the wealthier Filipinos through destruction of their homes — much as Sherman had done in the South — they would be coerced into helping convince their countrymen to submit.

Learning from the Indian wars, he also isolated the guerrillas by forcing Filipinos into tightly controlled zones where schools were built and other social amenities were provided.

“The entire population outside of the major cities in Batangas was herded into concentration camps,” wrote historian Stuart Creighton Miller. “Bell’s main target was the wealthier and better-educated classes. … Adding insult to injury, Bell made these people carry the petrol used to burn their own country homes.” [See Miller’s “Benevolent Assimilation.”]

For those outside the protected areas, there was terror. A supportive news correspondent described one scene in which American soldiers killed “men, women, children … from lads of 10 and up, an idea prevailing that the Filipino, as such, was little better than a dog. …

“Our soldiers have pumped salt water into men to ‘make them talk,’ have taken prisoner people who held up their hands and peacefully surrendered, and an hour later, without an atom of evidence to show they were even insurrectos, stood them on a bridge and shot them down one by one, to drop into the water below and float down as an example to those who found their bullet-riddled corpses.”

Defending the tactics, the correspondent noted that “it is not civilized warfare, but we are not dealing with a civilized people. The only thing they know and fear is force, violence, and brutality.” [Philadelphia Ledger, Nov. 19, 1900]
In 1901, anti-imperialists in Congress exposed and denounced Bell’s brutal tactics. Nevertheless, Bell’s strategies won military acclaim as a refined method of pacification.

In a 1973 book, one pro-Bell military historian, John Morgan Gates, termed reports of U.S. atrocities “exaggerated” and hailed Bell’s “excellent understanding of the role of benevolence in pacification.”

Gates recalled that Bell’s campaign in Batanga was regarded by military strategists as “pacification in its most perfected form.” [See Gates’sSchoolbooks and Krags: The United States Army in the Philippines, 1898-1902.]

Spreading the Word

At the turn of the century, the methodology of pacification was a hot topic among the European colonial powers, too. From Namibia to Indochina, Europeans struggled to subdue local populations.

Often outright slaughter proved effective, as the Germans demonstrated with massacres of the Herrero tribe in Namibia from 1904-1907. But military strategists often compared notes about more subtle techniques of targeted terror mixed with demonstrations of benevolence.

Counterinsurgency strategies were back in vogue after World War II as many subjugated people demanded independence from colonial rule and Washington worried about the expansion of communism. In the 1950s, the Huk rebellion against U.S. dominance made the Philippines again the laboratory, with Bell’s earlier lessons clearly remembered.

“The campaign against the Huk movement in the Philippines … greatly resembled the American campaign of almost 50 years earlier,” historian Gates observed. “The American approach to the problem of pacification had been a studied one.”

But the war against the Huks had some new wrinkles, particularly the modern concept of psychological warfare or psy-war.

Under the pioneering strategies of the CIA’s Maj. Gen. Edward G. Lansdale, psy-war was a new spin to the old game of breaking the will of a target population. The idea was to analyze the psychological weaknesses of a people and develop “themes” that could induce actions favorable to those carrying out the operation.

While psy-war included propaganda and disinformation, it also relied on terror tactics of a demonstrative nature. An Army psy-war pamphlet, drawing on Lansdale’s experience in the Philippines, advocated “exemplary criminal violence — the murder and mutilation of captives and the display of their bodies,” according to Michael McClintock’s Instruments of Statecraft.

In his memoirs, Lansdale boasted of one legendary psy-war trick used against the Huks who were considered superstitious and fearful of a vampire-like creature called an asuang.

“The psy-war squad set up an ambush along a trail used by the Huks,” Lansdale wrote. “When a Huk patrol came along the trail, the ambushers silently snatched the last man on the patrol, their move unseen in the dark night. They punctured his neck with two holes, vampire-fashion, held the body up by the heels, drained it of blood, and put the corpse back on the trail.

“When the Huks returned to look for the missing man and found their bloodless comrade, every member of the patrol believed the asuang had got him.” [See Lansdale’s In the Midst of Wars.]

The Huk rebellion also saw the refinement of free-fire zones, a technique used effectively by Bell’s forces a half-century earlier. In the 1950s, special squadrons were assigned to do the dirty work.

“The special tactic of these squadrons was to cordon off areas; anyone they caught inside the cordon was considered an enemy,” explained one pro-U.S. Filipino colonel. “Almost daily you could find bodies floating in the river, many of them victims of [Major Napoleon] Valeriano’s Nenita Unit. [See Benedict J. Kerkvliet, The Huk Rebellion: A Study of Peasant Revolt in the Philippines.]

On to Vietnam

The successful suppression of the Huks led the war’s architects to share their lessons elsewhere in Asia and beyond. Valeriano went on to co-author an important American textbook on counterinsurgency and to serve as part of the American pacification effort in Vietnam with Lansdale.

Following the Philippine model, Vietnamese were crowded into “strategic hamlets”; “free-fire zones” were declared with homes and crops destroyed; and the Phoenix program eliminated thousands of suspected Viet Cong cadre.

The ruthless strategies were absorbed and accepted even by widely respected military figures, such as Gen. Colin Powell who served two tours in Vietnam and endorsed the routine practice of murdering Vietnamese males as a necessary part of the counterinsurgency effort.

“I recall a phrase we used in the field, MAM, for military-age male,” Powell wrote in his much-lauded memoir, My American Journey. “If a helo [a U.S. helicopter] spotted a peasant in black pajamas who looked remotely suspicious, a possible MAM, the pilot would circle and fire in front of him. If he moved, his movement was judged evidence of hostile intent, and the next burst was not in front, but at him.

“Brutal? Maybe so. But an able battalion commander with whom I had served at Gelnhausen [West Germany], Lt. Col. Walter Pritchard, was killed by enemy sniper fire while observing MAMs from a helicopter. And Pritchard was only one of many. The kill-or-be-killed nature of combat tends to dull fine perceptions of right and wrong.”

In 1965, the U.S. intelligence community formalized its hard-learned counterinsurgency lessons by commissioning a top-secret program called Project X. Based at the U.S. Army Intelligence Center and School at Fort Holabird, Maryland, the project drew from field experience and developed teaching plans to “provide intelligence training to friendly foreign countries,” according to a Pentagon history prepared in 1991 and released in 1997.

Called “a guide for the conduct of clandestine operations,” Project X “was first used by the U.S. Intelligence School on Okinawa to train Vietnamese and, presumably, other foreign nationals,” the history stated.

Linda Matthews of the Pentagon’s Counterintelligence Division recalled that in 1967-68, some of the Project X training material was prepared by officers connected to the Phoenix program. “She suggested the possibility that some offending material from the Phoenix program may have found its way into the Project X materials at that time,” the Pentagon report said.

In the 1970s, the U.S. Army Intelligence Center and School moved to Fort Huachuca in Arizona and began exporting Project X material to U.S. military assistance groups working with “friendly foreign countries.” By the mid-1970s, the Project X material was going to armies all over the world.

In its 1992 review, the Pentagon acknowledged that Project X was the source for some of the “objectionable” lessons at the School of the Americas where Latin American officers were trained in blackmail, kidnapping, murder and spying on non-violent political opponents.

But disclosure of the full story was blocked near the end of the first Bush administration when senior Pentagon officials working for then-Defense Secretary Dick Cheney ordered the destruction of most Project X records. [See Robert Parry’s Lost History.]

Living Dangerously

By the mid-1960s, some of the U.S. counterinsurgency lessons had reached Indonesia, too. The U.S. military training was surreptitious because Washington viewed the country’s neutralist leader Sukarno as politically suspect. The training was permitted only to give the United States influence within the Indonesian military which was considered more reliable.

The covert U.S. aid and training was mostly innocuous-sounding “civic action,” which is generally thought to mean building roads, staffing health clinics and performing other “hearts-and-minds” activities with civilians. But “civic action” also provided cover in Indonesia, as in the Philippines and Vietnam, for psy-war.

The secret U.S.-Indonesian military connections paid off for Washington when a political crisis erupted, threatening Sukarno’s government.

To counter Indonesia’s powerful Communist Party, known as the PKI, the army’s Red Berets organized the slaughter of tens of thousands of men, women and children. So many bodies were dumped into the rivers of East Java that they ran red with blood.

In a classic psy-war tactic, the bloated carcasses also served as a political warning to villages down river.

“To make sure they didn’t sink, the carcasses were deliberately tied to, or impaled on, bamboo stakes,” wrote eyewitness Pipit Rochijat. “And the departure of corpses from the Kediri region down the Brantas achieved its golden age when bodies were stacked on rafts over which the PKI banner proudly flew.” [See Rochijat’s “Am I PKI or Non-PKI?” Indonesia, Oct. 1985.]

Some historians have attributed the grotesque violence to a crazed army which engaged in “unplanned brutality” or “mass hysteria” leading ultimately to the slaughter of some half million Indonesians, many of Chinese descent.

But the recurring tactic of putting bodies on gruesome display fits as well with the military doctrines of psy-war, a word that one of the leading military killers used in un-translated form in one order demanding elimination of the PKI.

Sarwo Edhie, chief of the political para-commando battalion known as the Red Berets, warned that the communist opposition “should be given no opportunity to concentrate/consolidate. It should be pushed back systematically by all means, including psy-war.” [See The Revolt of the G30S/PKI and Its Suppression, translated by Robert Cribb in The Indonesian Killings.]

Sarwo Edhie had been identified as a CIA contact when he served at the Indonesian Embassy in Australia. [See Pacific, May-June 1968.]

US Media Sympathy

Elite U.S. reaction to the horrific slaughter was muted and has remained ambivalent ever since. The Johnson administration denied any responsibility for the massacres, but New York Times columnist James Reston spoke for many opinion leaders when he approvingly termed the bloody developments in Indonesia “a gleam of light in Asia.”

The American denials of involvement held until 1990 when U.S. diplomats admitted to a reporter that they had aided the Indonesian army by supplying lists of suspected communists.

“It really was a big help to the army,” embassy officer Robert Martens told Kathy Kadane of States News Service. “I probably have a lot of blood on my hands, but that’s not all bad. There’s a time when you have to strike hard at a decisive moment.” Martens had headed the U.S. team that compiled the death lists.

Kadane’s story provoked a telling response from Washington Post senior editorial writer Stephen S. Rosenfeld. He accepted the fact that American officials had assisted “this fearsome slaughter,” but then justified the killings.

Rosenfeld argued that the massacre “was and still is widely regarded as the grim but earned fate of a conspiratorial revolutionary party that represented the same communist juggernaut that was on the march in Vietnam.”

In a column entitled, “Indonesia 1965: The Year of Living Cynically?” Rosenfeld reasoned that “either the army would get the communists or the communists would get the army, it was thought: Indonesia was a domino, and the PKI’s demise kept it [Indonesia] standing in the free world. …

“Though the means were grievously tainted, we — the fastidious among us as well as the hard-headed and cynical — can be said to have enjoyed the fruits in the geopolitical stability of that important part of Asia, in the revolution that never happened.” [Washington Post, July 13, 1990]

The fruit tasted far more bitter to the peoples of the Indonesian archipelago, however. In 1975, the army of Indonesia’s new dictator, Gen. Suharto, invaded the former Portuguese colony of East Timor. When the East Timorese resisted, the Indonesian army returned to its gruesome bag of tricks, engaging in virtual genocide against the population.

A Catholic missionary provided an eyewitness account of one search-and-destroy mission in East Timor in 1981.

“We saw with our own eyes the massacre of the people who were surrendering: all dead, even women and children, even the littlest ones. … Not even pregnant women were spared: they were cut open. …. They did what they had done to small children the previous year, grabbing them by the legs and smashing their heads against rocks. …

“The comments of Indonesian officers reveal the moral character of this army: ‘We did the same thing [in 1965] in Java, in Borneo, in the Celebes, in Irian Jaya, and it worked.” [See A. Barbedo de Magalhaes, East Timor: Land of Hope.]

The references to the success of the 1965 slaughter were not unusual. InTimor: A People Betrayed, author James Dunn noted that “on the Indonesian side, there have been many reports that many soldiers viewed their operation as a further phase in the ongoing campaign to suppress communism that had followed the events of September 1965.”

Classic psy-war and pacification strategies were followed to the hilt in East Timor. The Indonesians put on display corpses and the heads of their victims. Timorese also were herded into government-controlled camps before permanent relocation in “resettlement villages” far from their original homes.

“The problem is that people are forced to live in the settlements and are not allowed to travel outside,” said Msgr. Costa Lopes, apostolic administrator of Dili. “This is the main reason why people cannot grow enough food.” [See John G. Taylor, Indonesia’s Forgotten War: The Hidden History of East Timor.]

Public Revulsion

Through television in the 1960-70s, the Vietnam War finally brought the horrors of counterinsurgency home to millions of Americans. They watched as U.S. troops torched villages and forced distraught old women to leave ancestral homes.

Camera crews caught on film brutal interrogation of Viet Cong suspects, the execution of one young VC officer, and the bombing of children with napalm.

In effect, the Vietnam War was the first time Americans got to witness the pacification strategies that had evolved secretly as national security policy since the 19th Century. As a result, millions of Americans protested the war’s conduct and Congress belatedly compelled an end to U.S. participation in 1974.

But the psy-war doctrinal debates were not resolved by the Vietnam War. Counterinsurgency advocates regrouped in the 1980s behind President Ronald Reagan, who mounted a spirited defense of the Vietnamese intervention and reaffirmed U.S. resolve to employ similar tactics against leftist forces especially in Central America. [See Consortiumnews.com’s “Guatemala: A Test Tube for Repression.”]

Reagan also added an important new component to the mix. Recognizing how graphic images and honest reporting from the war zone had undercut public support for the counterinsurgency in Vietnam, Reagan authorized an aggressive domestic “public diplomacy” operation which practiced what was called “perception management” — in effect, intimidating journalists to ensure that only sanitized information would reach the American people.

Reporters who disclosed atrocities by U.S.-trained forces, such as the El Mozote massacre by El Salvador’s Atlacatl battalion in 1981, came under harsh criticism and saw their careers damaged.

Some Reagan operatives were not shy about their defense of political terror as a necessity of the Cold War. Neil Livingstone, a counter-terrorism consultant to the National Security Council, called death squads “an extremely effective tool, however odious, in combatting terrorism and revolutionary challenges.” [See McClintock’s Instruments of Statecraft.]

When Democrats in Congress objected to excesses of Reagan’s interventions in Central America, the administration responded with more public relations and political pressure, questioning the patriotism of the critics. For instance, Reagan’s United Nations Ambassador Jeane Kirkpatrick accused anyone who took note of U.S.-backed war crimes of “blaming America first.”

Many Democrats in Congress and journalists in the Washington press corps buckled under the attacks, giving the Reagan administration much freer rein to carry out brutal “death squad” strategies in El Salvador, Honduras, Guatemala and Nicaragua.

What is clear from these experiences in Indonesia, Vietnam, Central America and elsewhere is that the United States, for generations, has sustained two parallel but opposed states of mind about military atrocities and human rights: one of U.S. benevolence, generally held by the public, and the other of ends-justify-the-means brutality embraced by counterinsurgency specialists.

Normally the specialists carry out their actions in remote locations with little notice in the national press. But sometimes the two competing visions – of a just America and a ruthless one – clash in the open, as they did in Vietnam.

Or the dark side of U.S. security policy is thrown into the light by unauthorized leaks, such as the photos of abused detainees at Abu Ghraib prison in Iraq or by revelations about waterboarding and other torture authorized by George W. Bush’s White House as part of the “war on terror.”

Only then does the public get a glimpse of the grim reality, the bloody and brutal tactics that have been deemed “necessary” for more than two centuries in the defense of the purported “national interests.”

Peter Dale Scott is an author and poet whose books have focused on “deep politics,” the intersection of economics, criminality and national security. (For more, go to http://www.peterdalescott.net/) Robert Parry is a veteran Washington investigative journalist. (For his books, go to http://www.neckdeepbook.com)

To comment at Consortiumblog, click here.

US-Backed Jundallah Claims Abduction of Worker from Bushehr Nuke Plant

Members of Iran's Jundallah group (File)
Members of Iran’s Jundallah group (File)

DUBAI (Saud al-Zahed)

The Sunni militant group Jundallah has kidnapped an Iranian nuclear worker in the city of Esfahan, according to a statement seen by Al Arabiya on Friday, as five people were killed and nine others wounded in a shooting incident in Iran’s western province of Kurdistan.

The statement by the Sunni Baluchi organization, which is known for its armed activities against governmental institutions and military establishments in Iran, mentioned that members of the organization have carried out an “intelligence operation” in Esfahan and abducted the employee, who worked at an Iranian nuclear establishment.

No official confirmation

Jundallah alleged that the operation was carried out few days ago, but the statement did not mention the exact date of the abduction. The statement mentioned the name of the hostage as Amir Hussein Shirani bin Mohammed Shirani, who was born in 1971.

The statement said that the abducted nuclear worker was taken to Baluchistan mountains and promised to publish a number of “video clips and photos showing his confession.”

There was no confirmation from any official or independent source in Iran about the Jundallah allegations.

In case the allegation was correct, it would be the first operation of its kind, as it took place in Esfahan, which is hundreds of kilometers away from Jundallah stronghold in Sistan-Baluchistan that neighbors the Pakistani Baluchistan.

Iran has executed Junallah leader Abdul Malik Rigi in June after the Revolution Court convicted him of masterminding a number of armed operations in Baluchistan.

Iran accuses Jundallah of having links with the CIA and al-Qaeda. But the group deny the allegation and say that their main aim is to support the national rights of minorities in Iran’s Baluchistan.

Clashes in Kurdistan

In the meantime, five people, including four policemen, were killed and nine others injured when two gunmen opened fire on a police patrol in Iran’s western province of Kurdistan on Thursday, Mehr news agency reported.

Deputy provincial police commander Ebrahim Kazeminejad was quoted as confirming the toll from the attack on the patrol and passers-by in Sanandaj, the capital of the province bordering Iraq.

“At 5:10 pm two assailants from anti-revolutionary groups fired on a patrol and passers-by in Azadi Square of Sanandaj in which four policemen and a passer-by were martyred,” Kazeminejad said.

He said: “In this terrorist act also five policemen and four passers-by were wounded.”

Western Iran, which has a sizeable Kurdish population, has seen deadly clashes in recent years between security forces and Kurdish rebel groups operating from bases in neighboring Iraq.

In early September, Iranian security forces killed four members of an outlawed leftist Kurdish group — Komala — in Kurdistan.

The media reported that they had “entered the country for terrorist operations but were killed before they could do anything.”

In May, Iran hanged four Kurds, including a woman, after convicting them of membership in another outlawed Kurdish group, the Party of Free Life of Kurdistan (PJAK).

(Translated from Arabic by Abeer Tayel)

Should Ads Using Behavioral Marketing Technology Come With Warning?

Should Behavioral Targeting Be Opt-In?

by Laurie Sullivan

Privacy clearly went from a topic ignored by most to a word on many consumers’ lips. The industry’s self-regulation steps taken Monday provide a sign online advertisers will eventually have a structure for their privacy efforts.

Advertisers have been asked to implement an Advertising Option Icon near ads where behavioral tracking technology is in use.

The program implements practices of Self Regulatory Principles for Online Behavioral Advertising that address questions of choice, security, and accountability, as well as the Federal Trade Commission’s call for more transparent ad-targeting practices.

A Web site has been set up to provide more information on why the ad gets served up and gives consumers an opportunity to opt out of future targeted ads.

The participating organizations in Monday’s announcement include the American Association of National Advertisers, the Association of National Advertisers, the Direct Marketing Association, and the Better Business Bureau, and others.

Beginning next year, the Council of Better Business Bureaus and Direct Marketing Associate will enforce compliance. The groups plan to promote adoption by businesses through a national education campaign.

Zephrin Lasker, co-founder and CEO of Pontiflex, a digital ad technology provider offering opt-in display advertising, applauds the consortium’s move, but says the industry could have moved faster to implement a self-regulatory model with an opt-in approach similar to Pontiflex’s.

Pontiflex doesn’t “actively monitor and follow people around to try and figure out your interests,” he says. The company asks consumers to opt in and willingly give advertisers the information on their interests. The industry argues opt-in doesn’t scale, but more than 21 million U.S. consumers this year alone have opted in to advertisers that Pontiflex supports. In fact, according to Lasker, the company has been doubling its rate of consumer adoption.

Pontiflex runs sign-up ads on thank-you pages of ecommerce sites and in banner ads. The opt-in data allows advertisers to send information via email, but the company doesn’t follow consumers and collect data from one Web page to another.

Should Web sites have an opt-in button — and do you think that consumers would really use it? I don’t, but the millions of consumers who opted into Pontiflex-supported ads might.

Botero’s Abu Ghraib

Botero’s Abu Ghraib

Fernando Botero

Define it as you will. We know the grimace and cringe. We know bound hands and blindfolds. The men in Fernando Botero’s paintings are being tortured. And we have the evidence—the photographs, the testimony of perpetrators, and the flesh-and-blood victims. On a sunny November morning in the nation’s capitol, I stood in front of image after image at the opening of Botero’s Abu Ghraib exhibit at the American University Museum in Washington DC, biting my knuckles as cameras flocked and snapped the Colombian-born artist behind me. In one painting, leashed dogs attack a bleeding prisoner. In another, men in hoods and women’s underwear are piled on top of each other. A guard strikes a prisoner in the head with a baton. Another urinates on two prostrate men. A bored-looking guard with green plastic gloves pours water over a bound prisoner’s face to simulate drowning. (A few miles away on Capitol Hill, on the eve of his confirmation as Attorney General, Michael Mukasey was refusing to confirm that such techniques meet the legal standard for torture.)

“I went to your museum in Bogotá last summer,” I told Botero, when we finally had a moment alone. He had round black glasses and a slow, serious walk, but his perfect, silver goatee broke into a grin at the mention of Colombia. Botero is beloved in South America, based in large part on one hundred paintings depicting the drug violence in his native country—scenes of village massacres, portraits of paramilitary leaders, and sleeping presidents. They were donated to Bogotá’s National Gallery on the condition that they be kept on display in perpetuity. But Sophia Vari, Botero’s red-haired artist wife, told me that these new paintings were different. “For the Colombian violence,” she said, “he had grown up with that, so you become—it is terrible to say—but you become accustomed. For America,” she said with hesitation, “it was such a shock.” I asked Botero why he thought Americans themselves hadn’t responded to the shock in the same way. His face suddenly creased with concern. “It is surprising, no?”

“Abu Ghraib” was meant to address this very question, to confront American audiences with these realities, but Botero had difficulty even finding a gallery to show the series here. The paintings traveled across Europe before they appeared in New York, then at the University of California, Berkeley—where he has since donated the collection—and finally here in DC. He wanted the collection to remain in America, for American viewers, to stand as “a reminder.” During the press preview, when journalists asked questions in Spanish (“Maestro—” they always began), he kept trying to respond in English. He wanted everyone—mainstream, monolingual America—to hear directly from his lips.

“For nine months,” Botero told me, “I was thinking about only this. I was reeling and reeling.” He began the series after Seymour Hersh’s article appeared in the New Yorker in May 2004. Botero was flying home to Paris as he read how the US Army had taken over Abu Ghraib, only to subject the prisoners there—many of them innocent civilians—to the same barbarous treatment that had made the facility notorious under Saddam Hussein. Hersh had gotten hold of the Taguba Report, which detailed the abuses:

Breaking chemical lights and pouring the phosphoric liquid on detainees; pouring cold water on naked detainees; beating detainees with a broom handle and a chair; threatening male detainees with rape; allowing a military police guard to stitch the wound of a detainee who was injured after being slammed against the wall in his cell; sodomizing a detainee with a chemical light and perhaps a broom stick, and using military working dogs to frighten and intimidate detainees with threats of attack, and in one instance actually biting a detainee.

While most of America shuddered and put the magazine down, Botero couldn’t look away. He began drawing right there on the plane and kept sketching, then, when he reached Paris, painting. “I did it because I was very angry, as the rest of the world was, at the revelation. It was a shock for the world, for everybody, but for an artist even more.”

After the initial spark of rage, Botero said it felt like painting always feels, whether your subject is a corpse or a flower. “You are thinking about the paint, the color, composition.” You have to be “faithful to your aesthetic ideals, to the painting before anything else.” For this reason, Botero did not deviate from his signature, volumetric style, which gives everything a whimsical, rolly-polly appearance. For years, his portraits, his fruits, and his fat violins have composed a satirical celebration of bourgeois life—food, music, money, and sex. I first encountered Botero through playful paintings like these, admiring them comfortably in the company of a gaggle of school kids.

But this method would seem to work counter to Botero’s newly serious—and often grotesque—subject matter. There is nothing cartoonish about Botero’s men, however; the paintings focus intimately on their bodies—hugely muscled, crouched to hide their nakedness. The volumetric style accentuates the vulnerability of Botero’s subjects, their bodies soft and exposed. There is so much of them to hurt.

The result, paradoxically, is that Botero’s paintings seem to move people more effectively than the photographs and testimony they were based on. Although Botero was careful not to include anything that wasn’t documented, the paintings are more affecting than the photos—which seem to have put most people off with their stark reality. People were disgusted, but not moved to empathy. When I asked him about this, Botero explained that the sheer scale, the nearly life-sized depiction, “is part of the thing,” but just as importantly, “the images are concentrated—there are no distractions, you go directly to the essence.” The prisoners bleed onto perfectly clean floors in perfectly empty hallways. The subtle effect is that you—witnessing—are entirely alone with the victims.

Even the torturers almost never appear. In some pictures, snarling dogs stand in for the Americans, shown only as hands at the ends of leashes. In others, the guards are implied by bars and bruises, or disembodied boots, urine streams, gloved hands. By eliding the guards, Botero keeps the focus on the suffering of the prisoners, but also implicates any system that would sanction such torture. “The gloves were a symbol of humiliation,” Botero said, his voice growing urgent. “In order to touch these people, you have to wear gloves. It says, ‘You are an animal, an animal that has poison or is dirty.’ You can’t touch them with your bare hands. This green color was especially impressive. It is awful, and that it was green . . . .” He trailed off.

“The responsibility of the artist is to do art,” Botero said, finally. “It happens that you are a human being also and have to express something at times . . . . Do art. As good as you can. Paint, and then say what you have to say.” The potential art has for protest, in other words, is in the twin outgrowths of a single impulse—the artistic attraction to aesthetic beauty and the outrage that often comes from such close attention, from witnessing. “Art is supposed to give pleasure,” Botero said—even art like this. “You look at the crucifixion and think, it’s so beautiful,” he explained, but at the same time, the more closely you study suffering, the more “you feel it. Youfeel it.”

—Honor Jones

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JWP Chief Puts Big Money On Musharraf’s Head

Talal Bugti announces bounty on Musharraf’s head

* JWP chief will give Rs 1 billion, hundred acres of farmland

By Muhammad Zafar

QUETTA: Talal Bugti, the Jamhoori Watan Party president, has announced head money of Rs 1 billion and hundred acres of farmland on former president General (r) Pervez Musharraf for his crimes against humanity.

The JWP president made this announcement during a news conference in the presence of PML-N leader Sardar Yaqoob Nasir on Saturday. Talal said there was no truth in Musharraf’s recent statements, adding that he was spreading lies from day one. Musharraf was involved in heinous crimes against the state and society such as dismissing an elected government and dissolving parliament, killing Akbar Bugti along with 70 others, the Lal Masjid incident and other crimes, adding that they were unpardonable.

He said Musharraf posed a security threat and had undermined the sovereignty and integrity of Pakistan. If he was really brave, he should return to Pakistan immediately and face the criminal charges against him, the JWP president told reporters. Talal said Musharraf was a coward and would never return to Pakistan knowing the ground realities.

He demanded Musharraf’s name be sent to Interpol to bring him back to the country otherwise he would further disclose state secrets to his masters that might further weaken national sovereignty.

“A former intelligence agency official, Brigadier (r) Masood Malik, had reportedly agreed to appear as witness in Akbar Bugti’s murder case on the condition of official pardon during the Musharraf junta,” he claimed. He demanded the chief justice of Pakistan issue an arrest warrant against Musharraf to bring him to justice. It may be mentioned here that police registered a murder case against the former president for killing Akbar Bugti and 70 others. The Balochistan High Court had issued an order to the police to register a murder case against Musharraf following a writ petition filed by Jamil Bugti. There was no progress as the government has been reluctant to accelerate police proceedings against Musharraf and other co-accused.

Pakistan mulls tax on NATO trucks

[Pakistan hasn’t even been charging the US any fees on the 500+ tractor/trailers that tear up its roads each day to supply the terror war.]

Pakistan mulls tax on NATO trucks

LAHORE: The government is considering imposing a tax on NATO supply trucks going into Afghanistan from Pakistan, a private TV channel reported on Saturday. According to sources, NATO supplies are sent to Afghanistan through Chaman and Torkham road networks. On the other hand, some 500 trucks filled from Pakistani refineries go to Afghanistan on a daily basis and this had been the routine since the last seven years, the channel said. Numerous highways had been adversely affected due to the heavy trucks and hence the government said it considered imposing a tax on their supply. The government might also demand a road tax from the US for the past seven years of transporting these trucks, which would amount to approximately Rs 600 million, the channel reported. daily times monitor

Inside The Global Banking Intelligence Complex, BCCI Operations

Inside The Global Banking Intelligence Complex, BCCI Operations

By David DeGraw
The Public Record

 

Editor’s Note: This is the second installment of David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” Read the introduction here. Part I can be readhere.

To get a more complete understanding of our current crisis, we need to look at the history of events that led up to it. We need to peer deeply into the inner workings of the Global Banking Intelligence Complex. Without acknowledging and exposing the covert forces that are aligned against us, we will not be able to effectively overcome them.

In the past I have shied away from going too deeply into the details of the intelligence world out of fear of being written off and dismissed as a conspiracy theorist. If I hadn’t spent the majority of the past 20 years investigating global financial intelligence operations, I certainly wouldn’t believe half of this myself. Given the severity of our current crisis and the imminent devastating implications, I now realize that I must go deeper into covert activities than I publicly ever have. The information I am about to report is very well-sourced and documented, and needs to be covered before we can proceed to exposing present operations.

I: All Roads Go Through BCCI

Here is a partial list of the economic and political scandals that I investigated throughout the 1980s and early ’90s:

  • The Savings & Loan scandal;
  • Stock market manipulation and money laundering;
  • Iran-Contra Affair;
  • The October Surprise and Iran hostage crisis;
  • Iraqgate-BNL and the rise and funding of Saddam Hussein;
  • Pakistan’s nuclear program and the selling of bomb-making technology to Libya, Iran and North Korea;
  • The rise and funding of the Afghan Mujahideen (founding and funding of the Taliban and Osama bin Laden’s Al Qaeda network);
  • Illegal weapon sales to Iran and Saudi Arabia;
  • The proliferation of Middle Eastern terrorism;
  • The international drug trade run by people like Manuel Noriega and Pablo Escobar.
  • All of these scandals had one vital thing in common, the Bank of Credit and Commerce International (BCCI).

    In December 1992, the US Senate Foreign Relations Committee on Terrorism, Narcotics and International Operations delivered a report on their investigation into the bank, entitled “The BCCI Affair.” The report would disclose the largest political corruption case in the history of the global economy. As the Senate Committee summed it up:

    “BCCI’s criminality included fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI’s bribery of officials in most of those locations; support of terrorism, arms trafficking, and the sale of nuclear technologies; management of prostitution; the commission and facilitation of income tax evasion, smuggling, and illegal immigration; illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers.

    Among BCCI’s principal mechanisms for committing crimes were its use of shell corporations and bank confidentiality and secrecy havens; layering of its corporate structure; its use of front-men and nominees, guarantees and buy-back arrangements; back-to-back financial documentation among BCCI controlled entities, kick-backs and bribes, the intimidation of witnesses, and the retention of well-placed insiders to discourage governmental action.

    The BCCI scandal gave citizens of the world a rare glimpse into the inner workings of the covert global banking intelligence power structure, revealing power politics in its purest form. BCCI was modeled after the world’s most powerful intelligence agencies and multinational corporations. It represented the evolution of organized crime into the new world of the global economy, rendering nation-states obsolete. BCCI transcended religions and nationalities; it cut across the entire political spectrum, uniting countries and groups that, on the surface, were considered rivals, yet were unified in their pursuit of power.

    BCCI consisted of a complex alliance of intelligence agencies, multinational corporations, weapons dealers, drug traffickers, terrorists, global bankers and high-ranking government officials. It involved leaders from 73 countries and formed what was described as “an elaborate corporate spider web.”

    As former US Senate investigator Jack Blum described it:

    “The problem that we are all having in dealing with this bank is that… it had 3,000 criminal customers and every one of those 3,000 criminal customers is a page one story. So if you pick up on one of [BCCI’s] accounts you could find financing from nuclear weapons, gun running, narcotics dealing, and you will find all manner and means of crime around the world in the records of this bank.”

    Part II: Inside the Global Banking Intelligence Complex, BCCI OperationsBCCI would become known as the Bank of Crooks and Criminals with clientele such as Saddam Hussein, Manuel Noriega, Pablo Escobar, Abu Nidal, the Qassar brothers, Muammar Gaddafi, Ben Banerjee, Cyrus Hashemi, Ferdinand Marcos, Rodriguez Gacha, Alan Garcia, Daniel Ortega, Adolfo Calero, Adnan Khashoggi, Manucher Ghorbanifar, Sarkis Soghanalian, the Palestine Liberation Organization, Islamic Jihad holy warriors the Mujahideen, including Osama bin Laden and many others.

    In a 1991 Time magazine article entitled, “The Dirtiest Bank of All,” investigative journalists Jonathan Beaty and S.C. Gwynne summed up BCCI this way:

    “Nothing in the history of modern financial scandals rivals the unfolding saga of the Bank of Credit & Commerce International, the $20 billion rogue empire that regulators in 62 countries shut down early this month in a stunning global sweep. Never has a single scandal involved so much money, so many nations or so many prominent people.

    Superlatives are quickly exhausted: it is the largest corporate criminal enterprise ever, the biggest Ponzi scheme, the most pervasive money-laundering operation and financial supermarket ever created for the likes of Manuel Noriega, Ferdinand Marcos, Saddam Hussein and the Colombian drug barons.”

    In another report Beaty and Gwynne added:

    “This is the story of how the wealthy and corrupt in Latin America managed to steal virtually every dollar lent to their countries by Western banks, creating the debt crisis of the 1980s; how heads of state… skimmed billions from their national treasuries and hid them in Swiss and Caymanian accounts forever free from snooping regulators; how Pakistan and Iraq got materials for nuclear weaponry and how Libya built poison-gas plants.”

    II: BCCI & US Intelligence

    Part II: Inside the Global Banking Intelligence Complex, BCCI OperationsEven though BCCI was a Middle Eastern-based bank, investigations by the US Senate, NY Attorney General Robert Morgenthau and several award-winning journalists revealed that BCCI was run by the CIA and top US officials. CIA covert operations were run through BCCI’s “black network.” Former CIA directors George Bush Sr., William Casey and Richard Helms, former Defense Secretary Clark Clifford and former Secretary of State Henry Kissinger were all key players and shielded the bank from investigations throughout its reign. BCCI founder Agha Hasan Abedi and former CIA director William Casey met secretly for years. BCCI’s Mohammed Irvani was partners with former CIA director Richard Helms. BCCI frontmen Kamal Adham and A.R. Khalil were top Saudi intelligence directors and primary CIA liaisons for the entire Middle East. Many high-ranking Republicans and Democrats were vital to the bank’s operations, along with top corporate executives at First American Bank, Bank of America, PR firm Hill & Knowlton, cable company TCI, and auditing firms Price Waterhouse and Ernst & Young – to name just a few US companies that played crucial roles.

    The CIA, DIA, and NSC used BCCI as their own private bank, sending billions of dollars in covert funding and weapons to organizations and countries with which we are now in conflict – most notably the Mujahideen in Afghanistan (which evolved into Al Qaeda and the Taliban), Pakistan’s ISI, Saddam Hussein in Iraq and the government of Iran.

    BCCI investigations gave us the most detailed and well-documented view into the inner workings of the “war racket” that we have ever had. The BCCI Affair blatantly exposed how global intelligence agencies and banking interests covertly fund terrorists and drug cartels all over the world. As investigative reporter Chris Floyd wrote, “Instead of stopping the drug-runners and terrorists, the CIA decided to join them, using BCCI’s secret channels to finance ‘black ops’ all over the world.”

    Reporting in Time magazine, Beaty and Gwynne revealed some of the details:

    “From interviews with sources close to B.C.C.I., TIME has pieced together a portrait of a clandestine division of the bank called the ‘black network,’ which functions as a global intelligence operation and a Mafia-like enforcement squad…. The black network — so named by its own members — stops at almost nothing to further the bank’s aims the world over.

    The more conventional departments of B.C.C.I. handled such services as laundering money for the drug trade and helping dictators loot their national treasuries. The black network, which is still functioning, operates a lucrative arms-trade business and transports drugs and gold. According to investigators and participants in those operations, it often works with Western and Middle Eastern intelligence agencies. The strange and still murky ties between B.C.C.I. and the intelligence agencies of several countries are so pervasive that even the White House has become entangled. As TIME reported earlier this month, the National Security Council used B.C.C.I. to funnel money for the Iran-contra deals, and the CIA maintained accounts in B.C.C.I. for covert operations. Moreover, investigators have told TIME that the Defense Intelligence Agency has maintained a slush-fund account with B.C.C.I., apparently to pay for clandestine activities….

    The black network was a natural outgrowth of B.C.C.I.’s dubious and criminal associations…. Its original purpose was to pay bribes, intimidate authorities and quash investigations. But according to a former operative, sometime in the early 1980s the black network began running its own drugs, weapons and currency deals….

    Sources have told investigators that B.C.C.I. worked closely with Israel’s spy agencies and other Western intelligence groups as well, especially in arms deals. The bank also maintained cozy relationships with international terrorists, say investigators who discovered suspected terrorist accounts for Libya, Syria and the Palestine Liberation Organization in B.C.C.I.’s London offices….

    U.S. intelligence agencies were well aware of such activities. ‘B.C.C.I. played an indispensable role in facilitating deals between Israel and some Middle Eastern countries,’ says a former State Department official. ‘And when you look at the Saudi support of the contras, ask yourself who the middleman was: there was no government-to-government connection between the Saudis and Nicaragua.’”

    III: Af-Pak Covert Operations

    The CIA worked in partnership with BCCI in what was, at the time, the agency’s largest covert operation ever, pumping an estimated $10 billion into funding the Afghan Mujahideen’s anti-Soviet Jihad.

    In a 1992 article entitled, “The Riyadh Connection,” Time magazine reported:

    “B.C.C.I. was similarly entwined in another key U.S. intelligence operation of the 1980s: the supply of arms and money to the Afghan rebels. While such clandestine support was legally condoned, B.C.C.I. officials have told reporters that CIA Director William Casey… struck a deal that included off-the-books operations never reported to the U.S. Congress.”

    Pakistan would play a pivotal role in support of the Afghan Mujahideen. Pakistan was run by a corrupt militant oligarchy and was the operational home of BCCI. In “ Modern Jihad: Tracing the Dollars Behind the Terror Networks,” investigative reporter Loretta Napoleoni revealed details:

    “As soon as Abedi’s bank [BCCI] came on board, all [CIA] covert operations were passed to its ‘black network’, virtually a secret banking institution within the bank. Its headquarters were in Karachi and it was from this city that the underground network acted as a full-service bank for the CIA. With about 15,000 employees, it operated in a similar fashion to the Mafia. It was a fully integrated organization; it financed and brokered covert arms deals among different countries, it shipped goods using its own fleet, insured them with its own agency and provided manpower and security en route. In Pakistan, BCCI officials knew whom to bribe and when to do it. They also knew where to channel the funds. Richard Kerr, the former CIA director who admitted that the CIA had secret BCCI accounts in Pakistan, confirmed that those accounts had been opened to distribute the CIA funds to Pakistani officers and members of the Afghan resistance. By the mid-1980s, the black network had gained control of the port of Karachi and handled all customs operations for CIA shipments to Afghanistan, including the necessary bribes for the ISI [Pakistan’s intelligence service]. It was BCCI’s job to make sure that cargoes of arms and equipment were discharged quickly….

    As the war progressed, costs soared. There was constant shortage of money along the pipeline to supply the Mujahedin and so the ISI and CIA began looking for additional sources of income. One that proved viable was drug smuggling. Soon the narcotics-based economy took over the traditional agrarian economy of Afghanistan…. Within two years the Pakistan-Afghanistan borderland had become the biggest centre for the production of heroin in the world and the single greatest supplier of heroin on American streets, meeting 60 per cent of the US demand for narcotics. Annual profits were estimated between $100 billion and $200 billion. . . . In 1995, the former CIA director of Afghan operations, Charles Cogan, admitted that the CIA had indeed sacrificed the drug war to fight the Cold War.”

    In “Afghanistan 1979-1992: America’s Jihad,” investigative journalist Tim Weiner reported:

    “The CIA’s pipeline leaked. It leaked badly. It spilled huge quantities of weapons all over one of the world’s most anarchic areas. First the Pakistani armed forces took what they wanted from the weapons shipments. Then corrupt Afghan guerrilla leaders stole and sold hundreds of millions of dollars’ worth of anti-aircraft guns, missiles, rocket-propelled grenades, AK-47 automatic rifles, ammunition and mines from the CIA’s arsenal. Some of the weapons fell into the hands of criminal gangs, heroin kingpins and the most radical faction of the Iranian military…. While their troops eked out hard lives in Afghanistan’s mountains and deserts, the guerrillas’ political leaders maintained fine villas in Peshawar and fleets of vehicles at their command. The CIA kept silent as the Afghan politicos converted the Agency’s weapons into cash.”

    Part II: Inside the Global Banking Intelligence Complex, BCCI OperationsThrough this operation Osama bin Laden’s Al Qaeda network was formed. Bin Laden had accounts in BCCI and ran a CIA/BCCI-funded camp. [I’ll go into further detail on this aspect of the BCCI Affair in the next report.]

    BCCI also funded Pakistan’s nuclear weapons program when they set up the Khan Institute of Engineering Sciences and Technology. Pakistan then went on to sell the technology to Libya, Iran and North Korea. As a Chicago Sun Times report summed it up:

    “[Pakistan’s] President Pervez Musharraf has pledged that the disgraced founder of Pakistan’s nuclear weapons program can keep the vast wealth he accumulated selling bomb-making technology to rogue states around the world. Just days after Musharraf provoked worldwide consternation by pardoning Abdul Qadeer Khan for supplying nuclear expertise to Libya, Iran and North Korea, he told the Sunday Telegraph he would also spare the scientist’s property or assets. ‘He can keep his money,’ Musharraf said, adding there had been good reason not to investigate the origin of Khan’s suspicious wealth before 1998, when Pakistan successfully tested its first nuclear weapon. ‘… you have to ask yourself whether you act against the person who enabled you to get the bomb.’ Khan is thought to have earned millions of dollars from his sale of nuclear know-how, beginning in the late 1980s. Much of the money was funneled through [BCCI] bank accounts in the Middle East.”

    IV: Iran-Contra Affair

    George Bush Sr. and current Secretary of Defense Robert Gates were key players in the BCCI financed Iran-Contra Affair. As the US Independent Counsel For Iran/Contra Matters investigation stated:

    “Robert M. Gates was the Central Intelligence Agency’s deputy director for intelligence (DDI) from 1982 to 1986. He was confirmed as the CIA’s deputy director of central intelligence (DDCI) in April of 1986 and became acting director of central intelligence in December of that same year. Owing to his senior status in the CIA, Gates was close to many figures who played significant roles in the Iran/contra affair and was in a position to have known of their activities.”

    Leslie Alan Aspin, a British CIA agent who was killed in 1989, had classified documents proving Bush Sr.’s involvement in illegal covert weapon sales to Iran. A 1991 report in New York Magazine by Christopher Byron revealed some details and was later summed up in The Reference Shelf:

    “In a ten-page statement dated May 1. 1987, Aspin describes how he organized a 1984 BCCI financed TOW missile shipment from Portugal to Iran on behalf of Oliver North. Though North was at that time on the staff of the National Security Council, his recently declassified diaries indicate that he was spending much of his time working for Bush.”

    Key Iran-Contra asset Oliver North was involved in the operations and was working directly for Bush Sr., who was Vice President at the time. North maintained several accounts in BCCI which he used to finance his covert operations. As Time magazine reported:

    “… the National Security Council used B.C.C.I. to funnel money for the Iran-contra deals…. When American arms destined for Iran and Iraq passed through Israel, for example, B.C.C.I. was frequently the broker and financier…. There was, for example, the highly sensitive question of B.C.C.I.’s direct involvement in the secret arms-for-hostages deals in Iran during the 1980s, in which it acted as a broker and financier of weapons sales. Ollie North maintained three accounts at the B.C.C.I. Paris branch, and B.C.C.I. was used to transfer money to the contras.”

    George Bush Sr. would go on to pardon convicted Iran-Contra figures – former Defense Secretary Caspar Weinberger and five former CIA employees; Elliott Abrams, Robert McFarlane, Duane Clarridge, Alan Fiers, and Clair George. Robert Gates then went on to serve as Director of the CIA under Bush Sr., and is currently serving as Secretary of Defense under President Obama, having been selected to that position by former President George Bush Jr..

    V: Kissinger Associates & Iraqgate-BNL

    Part II: Inside the Global Banking Intelligence Complex, BCCI OperationsGeorge Bush Sr. and former Secretary of State Henry Kissinger were also heavily involved in another illegal covert operation run through an Italian BCCI-linked bank called Banca Nazionale del Lavoro (BNL). BNL was used to covertly funnel billions of dollars to Saddam Hussein. This scandal would become known as Iraqgate.

    In April 1992, former Congressmen Henry B. Gonzalez (TX-20) stated the following in the Congressional Record:

    Kissinger Associates, Scowcroft, Eagleburger, Stoga, Iraq, and BNL

    Mr. GONZALEZ: ‘Mr. Speaker, today I will talk about Henry Kissinger, his consulting firm Kissinger Associates, two former Kissinger Associates directors, Lawrence Eagleburger and Brent Scowcroft, and the chief economist at Kissinger Associates, Alan Stoga.

    I will explore their links to Banca Nazionale del Lavoro [BNL] and Iraq, and the Bush administration’s handling of the BNL scandal. But first, I will provide some background information on the BNL scandal….

    The $4 billion plus in BNL loans to Iraq between 1985 and 1990 were crucial to Iraqi efforts to feed its people and to build weapons of mass destruction. In addition, the BNL loans were crucial to Reagan and Bush administration efforts to assist Saddam Hussein….

    It is truly amazing that the BNL scandal went on as long as it did. Various agencies within our Government knew of BNL’s role in bankrolling Iraq–yet they supposedly did not know that the loans were unauthorized or not properly reported….

    Several of BNL’s high level friends in the United States should have been aware of the BNL loans to Iraq. The high level patrons that I am referring to are Henry Kissinger, and his Kissinger Associates compadres, Brent Scowcroft and Lawrence Eagleburger….

    I will reveal that both Mr. Eagleburger and Mr. Scowcroft played a key role in the Bush administration’s handling of the BNL scandal, even though BNL was a paying client of Kissinger Associates just months prior to the BNL scandal becoming public….

    Kissinger Deliberately Misleads Public

    Until recently, Mr. Kissinger was a member of the BNL’s international advisory board and during the height of the BNL-Atlanta scandal BNL was a paying client of Kissinger Associates.

    While Henry Kissinger was a paid member of the BNL’s advisory board for international policy between 1985 and June 1991, he received at least $10,000 for attending each meeting of the BNL advisory board.

    Other BNL advisory board members included David Rockefeller, the chairman of the Rockefeller Group and a director of Chase Manhattan Bank, Pierre Trudeau, the former Prime Minister of Canada, Lord Thornycroft, the former British Minister of Defense, and other politically well-connected international notables.

    After my April 25, 1991, floor statement on Mr. Kissinger, he told the Financial Times newspaper that he had resigned from the BNL advisory board a week before the BNL indictment in February 1991 because `he did not want to answer questions about such incidents.’

    Two weeks ago, the prominent TV show, ‘60 Minutes,’ revealed that Kissinger had not resigned from the BNL advisory board in February 1991, as he had told the Financial Times. In fact, `60 Minutes’ reported that Mr. Kissinger served on BNL’s advisory board until his contract expired in the summer of 1991, more than 4 months after the date he had previously reported.

    Mr. Kissinger was not the only Kissinger Associates employee that dealt with BNL. Mr. Brent Scowcroft, the vice chairman and Mr. Lawrence Eagleburger, the president of Kissinger Associates also had relationships with BNL.

    Brent Scowcroft, BNL, and Iraq

    One of the most prominent of the Kissinger Associates alumni is Brent Scowcroft, President Bush’s current National Security Adviser and head of the NSC staff. . . .

    Scowcroft often took charge of the National Security Council while Kissinger was fulfilling his duties as Secretary of State, and in 1975 he succeeded Kissinger as National Security Adviser to President Ford….

    In 1982, Scowcroft joined Kissinger in setting up Kissinger Associates. Scowcroft served as vice chairman and head of Kissinger Associate’s Washington, DC, office until becoming the head of the National Security Council under President Bush in January 1989….

    Alan Stoga–Kissinger Associates

    Another link between Kissinger Associates, BNL and Iraq is Alan Stoga. Alan Stoga is a former economist at First Chicago Bank and is currently a director of Kissinger Associates. Mr. Stoga is said to be an expert in country risk analysis and international finance. He has been interested in the Middle East for many years and has made extensive visits to the area….

    Conclusion

    BNL was a client of Mr. Scowcroft’s while he was the vice-chairman of Kissinger Associates. Mr. Scowcroft regularly provided advice to BNL’s management and received hefty fees in return.

    Mr. Scowcroft and his staff at the National Security Council, along with the State Department, masterminded the Bush administration’s handling of the BNL scandal in order to mitigate the damage it would have caused to United States-Iraq relations. In the process they trampled on United States law enforcement efforts and repeatedly misled the Congress and the American public about the United States policy toward Iraq….

    As for Mr. Kissinger, he misled the public about his relationship with BNL and about his firm’s contact with Saddam Hussein. Mr. Stoga misled the Banking Committee about the reasons for his trip to Iraq in the summer of 1989 when he met with Saddam Hussein to discuss Iraq’s debt problems.’”

    Kissinger and his firm Kissinger Associates played a key role throughout BCCI’s entire existence. The Senate investigation report had an entire chapter focusing on Kissinger’s role, entitled “BCCI And Kissinger Associates.” After the report was released to the Senate Foreign Relations Committee, Henry Kissinger got them toredact several sections from the Government Printing Office’s final hardcopy version.

    VI: The Ultimate Conspiracy: The BCCI Cover-Up

    Part II: Inside the Global Banking Intelligence Complex, BCCI OperationsIn Jonathan Beaty and S.C. Gwynne’s ground-breaking book on BCCI, entitled “The Outlaw Bank,” they detailed the overwhelming evidence proving the dominant role US intelligence, governmental agencies and global banking interests played in BCCI operations and in covering up the bank’s scandalous and illegal activities. As theyreported:

    “Perhaps the most disturbing aspect of the BCCI affair in the United States was the failure of U.S. government and federal law enforcement to move against the outlaw bank. Instead of swift retribution, what took place over more than a decade was a cover-up of major, alarming proportions, often orchestrated from the very highest levels of government. When the Justice Department finally moved decisively against BCCI in late 1991, it did so reluctantly.”

    As the US Senate report revealed:

    “The political connections of BCCI’s U.S. lawyers and lobbyists were critical to impeding Congressional and law enforcement investigations from 1988 through 1991, through a variety of techniques that included impugning the motives and integrity of investigators and journalists, withholding subpoenaed documents, and lobbying on Capitol Hill to protect BCCI’s reputation and discourage efforts to close the bank down in the United States.”

    As Beaty and Gwynne revealed in detail, government documents exposing BCCI’s criminality went back to 1979. As they wrote, “authentic, unambiguous information” on the bank’s illegal activity was presented to the State Department, Justice Department, Drug Enforcement Agency, Internal Revenue Service, Commerce Department, Customs Department, Central Intelligence Agency, National Security Agency, Defense Intelligence Agency, Department of Energy, and the White House’s National Security Council.

    Perhaps more than anyone, the Treasury Department and Federal Reserve had extensive information on BCCI’s criminal activities. As investigations revealed, “the detail of information was exceptional.” During pivotal BCCI years, James Baker, after serving as President Reagan’s Chief of Staff, was Treasury Secretary from 1985 – ‘88. After Baker left the Treasury Department, he became Bush Sr.’s Secretary of State from 1989 – ‘92. At the Federal Reserve, Alan Greenspan, after serving as a director at the Council on Foreign Relations, became Fed Chairman in 1987 and served in that position throughout BCCI’s reign.

    VII: Wall Street & US Banking Industry

    BCCI penetrated deeply into Wall Street and the US banking industry. With the help of former Defense Secretary Clark Clifford, BCCI secretly owned Washington’s largest bank, First American, and Bank of America was a vital BCCI lifeline. As Beaty and Gwynne revealed:

    “B.C.C.I. even accomplished a Stealth-like invasion of the U.S. banking industry by secretly buying First American Bankshares, a Washington-based holding company with offices stretching from Florida to New York….

    Five of Bank of America’s senior officers were either on BCCI’s board of directors or helped to manage Abedi’s bank. For the next decade the two banks would move billions of dollars a week through each other’s international offices, and the Bank of America would be an invaluable, if hidden, ally, since it would continue to accept BCCI’s letter-of-credit business after virtually no other Western bank would touch it. Indeed, it could be argued that Bank of America became the single most important financial institution helping BCCI stay afloat.Part II: Inside the Global Banking Intelligence Complex, BCCI Operations

    In the United States alone, Bank of America transferred more than $1 billion a day for BCCI until the moment of BCCI’s global seizure in July 1991.

    Thus Bank of America acted as a sort of global vacuum cleaner, sucking up many BCCI branch deposits and thereby providing the fuel Abedi needed to keep his Ponzi scheme alive.”

    Stock Market Manipulation & Money Laundering

    Long before the Commodities Futures Trading Commission (CFTC) was covering-up wide-scale manipulation of the stock market during this economic crisis, they were working overtime to conceal BCCI money laundering and market manipulation. As the 1992 US Senate Report stated:

    “In the entire BCCI affair, perhaps no entity is more mysterious and yet more central to BCCI’s collapse and criminality than Capcom, a London and Chicago based commodities futures firm which operated between 1984 and 1988. Capcom is vital to understanding BCCI because BCCI’s top management and most important Saudi shareholders were involved with the firm. Moreover, Capcom moved huge amounts of money — billions of dollars — which passed through the future’s markets in a largely anonymous fashion.

    Capcom was created by the former head of BCCI’s Treasury Department, Ziauddin Ali Akbar, who capitalized it with funds from BCCI and BCCI customers…. Additionally, the company employed many of the same practices as BCCI, especially the use of nominees and front companies to disguise ownership and the movement of money. Four Americans, Larry Romrell, Robert Magness, Kerry Fox and Robert Powell — none of whom had any experience or expertise in the commodities markets — played important and varied roles as frontmen….

    The commodities markets in the U.K. and the U.S. are not restricted, regulated or supervised as stringently as the banking industry or the securities markets.

    Moreover, the commodities markets can sustain almost limitless volume, a necessary prerequisite for crime on the scale of that contemplated by BCCI since fraudulent transactions may be hidden in a multitude of legitimate ones. In a letter to the directors, the Chairman of Capcom, Larry Romrell, reported 165 million in trading during the first four months of operation, and profits of 883,393. That trend continued until 1988 leading Akbar to boast to agent Mazur: ‘We have contracted 165,000 contracts totaling $53 billion with Drexel Burnham,’ and later, ‘we have done over $90 billion total in 1988.’

    While the number of contracts and dollar volume seems unbelievable, a commodities company can artificially create massive volume by many small or no-risk trading methods. Indeed, the volume generated by Capcom helped it to generate respectability and acceptance with reputable banks and brokers. For example, listed under ‘Auditors and Advisers’ in Capcom’s 1987 Annual Report were the following major international banks: Manufacturers Hanover Trust Company, London, National Westminster Bank Plc, Manufacturers Hanover Trust Company, New York, Deutsche Westminster Bank, A.G., and National Westminster Bank, plc. Elsewhere, Capcom noted its ties to Dean Witter Reynolds, American Express Bank, Refco, Prudential Bache Trading Corp., and Sumitomo Trust and Banking, Ltd.”

    Also, long before the modern techniques of market manipulation and money laundering, like high frequency trading, round trip trading and quote stuffing, BCCI mastered a technique called “mirror image trading.”

    The Senate report continued:

    “Capcom and Money Laundering

    There is evidence that Capcom engaged in money laundering for a variety of clients both in the United States and in London. For example, some 50 transactions were identified in the Futures, Inc. accounts with insufficient or no supporting documentation regarding the source or disposition of funds. These transactions totaled more than $125,000,000.

    In testimony to the Subcommittee, Customs agent Robert Mazur testified how Akbar used ‘mirror-image’ trading to launder huge sums of money. Mirror image trading involves buying contracts for one account while selling an equal number from another account. Since both accounts are controlled by the same individual any profit or loss is effectively netted. According to Mazur, Akbar explained that because these ‘mirror image’ transactions can be lost among many millions of dollars worth of legitimate transactions ‘it would take forever for anyone to ever find it.’

    Using mirror-image trading, Akbar bilked the BCCI Treasury accounts and laundered money for one of Capcom’s most notorious clients, General Manuel Antonio Noriega. Although complex, the series of transactions involving Noriega, BCCI and Capcom provide an illustration of textbook money laundering….

    Conclusion….

    In terms of the broader lessons of Capcom, regulation of the futures markets need to be greatly strengthened. Even a cursory background check on Akbar would have revealed that he had managed the Treasury accounts at BCCI which lost $400 million in the futures markets in the early eighties. Moreover, regulators who appeared before the Subcommittee testified on the one hand that annual audits of Capcom US turned up nothing irregular, but that Capcom’s books and records were a mess. That such a contradiction was allowed to continue for four years indicates that the CFTC needs to critically review the effectiveness of the various exchange audits. Finally, money laundering should be made a crime under the Commodities Futures Trading Act.”

    VIII: The Savings and Loan Scandal

    The Savings and Loan scandal was a significant part of the BCCI Affair. Looking back through piles of documents and research I’ve gathered, it is stunning how similar that crisis was to our current crisis. Both operations were put into motion as a result of the deregulation of key sectors of the financial system; in both of these cases the real estate sector was a main component. This is a clear pattern in financial intelligence operations. The first essential mission is to create legislation that allows for the creation of dark spaces, or “dark pools,” within key areas of the financial system where intelligence operations can then be executed without oversight or accountability.

    To show you how history repeated itself, here’s an excerpt from the 1993 book, “Banking Scandals: The S&Ls and BCCI,” edited by Robert Emmet Long:

    “The Savings and Loan debacle – the greatest scandal in the history of American banking – first came to national attention in the mid-1980’s. At that point, the failure of the thrifts, as S&Ls are sometimes known, appeared to be a controllable and containable situation. Both government officials and representatives of the Savings and Loan industry gave assurances that the S&L industry was still sound, and both worked to head off a full-scale investigation.… The delay in confronting the situation cost taxpayers billions of dollars. The price tag for bailing out the failed banks steadily escalated, from estimates of $50 billion at first to $500 billion and then $750 billion or even a staggering $1 trillion.…

    The Savings and Loan scandal was unparalleled in the extent of its chicanery and in its ultimate cost to taxpayers, who will be paying for it for decades to come… In a series of steps beginning in 1980, the S&Ls were deregulated at the same time that the Federal Savings and Loan Insurance protection for depositors rose from $40,000 to $100,000. The combination stimulated get-rich-quick investments of a highly speculative nature on the part of bankers, who looted the treasuries of the institutions they were entrusted to protect.”

    It was also George Bush Sr. who, then as Vice President, oversaw the “task force on deregulation and bank supervision” that led directly to the S&L crisis. In fact, his son, Neil Bush became known as the “poster boy” of the S&L crisis. Neil was nicknamed “the Silverado Kid” after he cost US taxpayers $1.3 billion while running Silverado Banking, Savings & Loan. In 1989, after becoming president, George Bush Sr. promptly bailed out the S&L industry, costing taxpayers hundreds of billions of dollars.

    Many of the failed S&L thrifts served as secret intelligence shell companies and were traced back to BCCI and the CIA. In a study entitled, “Organized Crime, The CIA and the Savings and Loan Scandal,” Criminal Justice Professor Gary W. Potter explains:

    “It is not our intent to discuss the unethical and even illegal business practices of the failed savings and loans and their governmental collaborators. The outlandish salaries paid by S & L executives to themselves, the subsidies to the thrifts from Congress which rewarded incompetence and fraud, the land ‘flips’ which resulted in real estate being sold back and forth in an endless ‘kiting’ scheme, and the political manipulation designed to delay the scandal until after the 1988 presidential elections are all immensely interesting and important. But they are subjects for others’ inquiries. Our interest is in the savings and loans as living, breathing organisms that fused criminal corporations, organized crime, and the CIA into a single entity that served the interests of the political and economic elite in America. Let us begin by quickly summarizing the most blatant examples of collaboration between financial institutions, the mob, and the intelligence community….

    First National Bank of Maryland…
    Palmer National Bank…
    Indian Springs Bank…
    Vision Banc Savings…
    Hill Financial Savings…
    Sunshine State Bank…

    All told at least twenty-two of the failed S & L’s can be tied to joint money laundering ventures by the CIA and organized crime figures. If the savings and loan scandals of the 1980s reveal anything, they demonstrate what has often been stated as a maxim in organized crime research: that corruption linking government, business, and syndicates is the reality of the day-to-day organization of crime. Investigations of organized crime in the United States, Europe, and Asia have all uncovered organized crime networks operating with virtual immunity from law enforcement and prosecution.”

    For further details on BCCI and CIA connections to the S&L crisis, let’s return to “Banking Scandals: The S&Ls and BCCI:”

    “The banking scandals involving S&Ls and the rogue Bank of Credit and Commerce International (BCCI) are linked through David Paul, former CEO of CenTrust Savings Bank, a Miami S&L that was seized in February 1990. Like S&L kingpin Charles Keating, Paul knew that he could ingratiate himself with politicians by helping them raise campaign money. Political intervention by the likes of Keating Five senators Alan Cranston of California and Donald Reigle of Michigan helped keep CenTrust open for two years after it otherwise would have been closed. CenTrust’s involvement with BCCI was even greater than its interaction with S&L scoundrels. By mid 1988, CenTrust owed its survival to BCCI and one of the bank’s alleged front men, Ghaith Pharaon, who helped win approval of a CenTrust bond issue that brought new capital into CenTrust and improved the condition of its books just in time for the thrift to pass a crucial examination by regulators….

    Sunbelt Savings, Western Savings, and State Savings have all been named by the Houston Post as members of a daisy chain of failed thrifts with links to organized crime and even, perhaps, to the CIA. All three have collapsed, at a cost to taxpayers of over $3 billion.”

    Once again, George Bush Sr.’s role in BCCI and the S&L crisis cannot be understated. To recap, over the course of BCCI’s entire reign, Bush Sr. led the CIA, then served as Vice President before becoming President. He had extraordinarily close relations with Saudi Arabia, the most oil-rich nation in the world. Kahlam Adham was a top BCCI executive and head of Saudi Arabian intelligence, he was known as “the godfather of Middle East Intelligence” and was the CIA’s main liaison to the region. BCCI’s Chief Operations Officer was Khalid bin Mahfouz, who also led Saudi Arabia’s largest national bank and was a major player in the oil industry. Mahfouz was known as “the most powerful banker in the Middle East.” As already mentioned, Saudi Arabian intelligence was mixed in tightly with Wall Street banking interests in BCCI’s Capcom money laundering operations in the futures market. George Bush Sr. also did everything within his power to conceal these operations, as investigative reporter Chris Floyd wrote:

    “When a few prosecutors finally began targeting BCCI’s operations in the late Eighties, President George Herbert Walker Bush boldly moved in with a federal probe directed by Justice Department investigator Robert Mueller. The U.S. Senate later found that the probe had been unaccountably ‘botched’–witnesses went missing, CIA records got ‘lost,’… Lower-ranking prosecutors told of heavy pressure from on high to ‘lay off.’ Most of the big BCCI players went unpunished or, like [Khalib bin] Mahfouz, got off with wrist-slap fines and sanctions. Mueller, of course, wound up as head of the FBI, appointed to the post in July 2001–by George W. Bush.”

    Robert Mueller, who has been running the FBI since September 4, 2001, under Bush Jr. and now Obama, was Bush Sr.’s go-to guy at the Justice Department in covering up BCCI and S&L operations. Back in 1992, Beaty and Gwynne reported the following in Time magazine:

    “In the U.S. investigators now say openly that the Justice Department has not only reined in its own probe of the bank but is also part of a concerted campaign to derail any full investigation. Says Robert Morgenthau, the Manhattan district attorney, who first launched his investigations into B.C.C.I. two years ago: ‘We have had no cooperation from the Justice Department since we first asked for records in March 1990. In fact they are impeding our investigation, and Justice Department representatives are asking witnesses not to cooperate with us.’”

    In summation, George Bush Sr., Henry Kissinger, James Baker, Robert Mueller, Robert Gates and Alan Greenspan were all heavily involved in BCCI activities. Former President Bill Clinton even played a crucial role in continuing the cover-up by killing follow-up investigations upon taking office. More stunning than the BCCI operations and the cover-up, was that even after the BCCI Affair was finally exposed, all of these major players were not held accountable. The fact that people like this not only got to walk away, but remained in top positions of power for years after the scandal was exposed, with Robert Gates now serving as the Secretary of Defense and Robert Muller still serving as the head of the FBI, tells you all you need to know about the rule of law in the United States.

    When you look back at the S&L crisis and understand how that scandal worked, you can clearly see how that operation served as a forerunner to, and evolved into, our current economic crisis. Of course this time it would happen under the presidency of George Bush Jr., and the cover-up would be maintained by a different Democratic President, Barack Obama.

    IX: The Lessons of BCCI

    While investigating BCCI operations, I began to clearly understand for the first time how the Global Banking Intelligence Complex runs both political parties in the United States. After years of researching and investigating BCCI, I’ve come to understand how power really operates, who the real power players are and how the mainstream media, which is tightly controlled by these forces, keeps the American public in the dark and marginalized by never reporting on the roots of power. The harsh truth is that American democracy and the rule of law are an illusion.

    Above all, the BCCI scandal taught me two major lessons. First, when there is blatant criminal activity that goes unpunished, global banking intelligence interests are behind it. Second, you always have to follow the money. At the heart of power is the money supply, the ability to create, issue and manipulate global currencies. This is what the most powerful have always known. As the old House of Rothschild maxim goes, “Let us control the money of a nation, and we care not who makes its laws.”

    When you peel back all the layers, the ultimate power in this world lies within the Global Banking Intelligence Complex, or the “money powers” as our Founding Fathers and early presidents called them. If you research our forefathers, you will see that they understood this point very well. The main theme throughout American history has always been the war between democracy and the concentration of power within the banks.

    This may seem obvious to some, but this very obvious point has been omitted from mainstream media and public consciousness within the United States. This very viewpoint has been completely removed from the debate surrounding our current economic crisis and the failed financial reform process. And when it comes to the funding of perpetual wars, the banking interests behind the scenes are never even mentioned.

    So this long winding road has led me right into the heart of our current crisis. It has been from this viewpoint that I have closely watched this crisis unfold. I’ve been following all these power players for years now and it’s given me an insider’s view and front row seat into our current political environment. Watching old BCCI players and their protégés continue to maintain positions as top US government officials over the years reveals a very different reality when you consider significant issues like 9/11; the Af-Pak and Iraq wars; the private military complex; the Israeli-Palestinian conflict; Pakistani, Iranian and North Korean nuclear weapons programs; global weapons sales; mainstream media propaganda campaigns; campaign finance laws; lobbying efforts; electronic voting machines; the current economic crisis, along with the bailout and stock market manipulation.

    When I think about the “War on Terror” and the modern global banking system, the BCCI Affair is child’s play in comparison. The Global Banking Intelligence Complex is on steroids and stronger than ever, with power and wealth concentrated in unprecedented fashion.

    Now that we have a fundamental understanding of how financial intelligence operations worked throughout the 1980s and early ’90s, now that we’ve scratched just below the surface, I will now expose operations throughout the late ’90s and past decade.

    David DeGraw, a regular contributor to The Public Record, is an investigative journalist whose work has been featured in numerous publications and websites. He is the founder and editor of AmpedStatus.com, editorial director ofMediaChannel.org and author of The Economic Elite Vs. The People of the United States.