The Anatomy of a Fraud: Al Martin and John Phillips
Al Martin;s book details a system of state sponsored fraud there is no copyright violation intended. As our nation will face a critical decision in 2016 this document will remain until such a time as those who are guilty of Iran Contra crime drop our of the Presidential Race. Please buy Al Martin’s book and I hope my editing of this small section of his book will set the record straight. The writing is on the wall.
When one examines the frauds from A to Z, but most importantly follows the trail of money - the money will tell how large the conspiracy is and its State-sponsored nature that allowed the fraud to exist. That's why Martin consistently called it Iran-Contra Real Estate and Banking Fraud. These were, in effect, de facto State-sponsored schemes. It could not have worked any other way unless there was sponsorship or at the very least, State-acquiescence. At the top of this system of fraud were government officials like George Herbert Bush, Oliver North.
As bodies fell and jail cells filled, the “Big Lie” during Iran-Contra was growing into the biggest scandal in United States history. The media continued to write about the problem as if it was rock falling in a pond, ignoring the waves which the public would eventually pay for. It is much easier for people to believe one $30 million deal was bogus, or another $400 million deal was bogus, than to comprehend that there was a chain of command that linked all these frauds.
In his book, The Conspirators- Secrets of an Iran Contra Insider , Al Martin documents in great detail how the Iran Contra Criminal Enterprise evolved into a multi-billion dollar fraud. Al Martin owed and ran Southeast Resources, Inc. which managed over 300 different investment products all based on different kinds of frauds including marketing illegal products, illegal limited partnerships, illegal loan syndication, illegal tax shelters and various other investment vehicles to defraud both banks and investors. Al Martin handled in house investment products for George Herbert Bush, Jeb Bush for whom he sometimes acted as an assistant, Richard Hamil, Larry Nichols, and Barry Seal, all prominent figures in the Iran Contra Scandal. Al Martin personally raising about $3 million per year from his fraudulent activities to help fund the illegal activities under taken by government officials sworn to uphold the Constitution.
The Iran Contra fraud began in 1983 and included 19 different type of state sponsored fraud: weapons trafficking, narcotics, illegal bank loans, illegal Security transactions, and insurance fraud. The frauds were usually carried out in what Martin called “Iran Contra-friendly states. These states had long standing Republican governors and government bureaucracies that could easily be controlled at the State and the County level such as Florida, Texas, Nevada, Arizona, Connecticut, and Illinois.
What evolved was a system that used government paid employees who were using the tax exempt status of political organizations and foundations, to siphon off money for covert political activities: State-sponsored and State-sanctioned fraud. Underneath, there were people like Martin, essentially subcontractors who developed a series of corporate artifices, usually oil and gas, gold bullion or gold mining deals, aircraft brokerage deals, real estate deals, and then used them to defraud banks. These schemes were all old right-wing favorites for the surreptitious and illegal generation of money in Martin’s view.
In a memorandum from Donald Gregg, Vice Presidential Security Adviser, and Oliver North in July 1984, the financial goals for this group would be $1 Billion per month. Martin and others used existing Republican National Committee operations such as GOPAC to raise illegal money. Pete DuPont was the chairman of GOPAC, and Martin still has a list of GOPAC contributors who contributed to a North-Secord (Richard Secord) controlled entity, in exchange for political favors to help their corporate entities. By 1985 business was booming as the level of fraud expanded beyond even the planner’s wildest dream.
Financial Fraud is impossible to commit without a place to lauder your money. Bankers have traditionally played a vital behind the scenes role in organized crime and financial fraud. Iran Contra fraud was no different. It is impossible to defraud a bank without someone on the inside circle of the bank who assists with the necessary paper work and transfer of funds. The bankers on the inside knew fraud was occurring and let it proceed. While different parts of the octopus committed different types of financial crimes, the same banks were generally used to lauder funds from a variety of frauds. Overseas registration of bank and holding companies in places like Panama and Costa Rica were common place. Many of these institution shared similar members on their board of directors, principals, and officers. Many times banks would end up with notes and stock as collateral that in the end was worthless. The frauds were segregated, and banking was integrated.
“We knew the banks were going to fail because it was "we" who were using them to fail. We would then use the bank's money which we illegally borrowed from them to short their own stock and then in turn not pay back the loan, or pay back the loan at thirty or forty cents on the dollar when it got in the hands of the Federal Saving and Loan Insurance Corporation (FSLIC). The FSLIC after receiving $15 billion in 1986, $10.75 billion in 1987 was insolvent by 1989 and became part of the FDIC. It was a fraud, compounded on a fraud, compounded on a fraud.
MCorp became the second largest bank failure in United States history. Al Martin recorded a conversation that he had with Jeb Bush about how to make large cash profits using fraud. “Hey All you gotta short the stock of MCorp. It's going down the tubes. We are taking it down the tubes." At the time MCorp common stock was trading at about three dollars a share. You couldn't short any of it. It was all out, nothing to short. But the preferred stock, was trading at about eight dollars and you could still short it. Jeb then borrowed a million dollars from MCorp just as it's going down the tubes. He used that million dollars to short MCorp preferred stock because when the company fails, he doesn't have to pay back. The profits of this type of transactions were enormous and common place during Iran Contra. This same technique was used with Allied Bancshares, Texas American, Great American Bank and Trust, and Silverado. It was done with preferred stock.
In Miami, Richard Secord borrowed money from Barbara Studley to create a financial relationship with Bayshore National Bank that was controlled by Tony DeConcerti. By the time the scheme evolved Richard Secord and Harry Aderhot had stolen more than $13 million from the Bayshore. The bank finances in shambles, it was now ripe for a take over. It was purchased by Eagle National Bank that was controlled by Jose Antonio “Pepe” Cabrera-Sarmiento who also owned Banc de Columbia. Laundered money began to flow quickly through Eagle National Bank to the Banc de Columbia (BC). The Eagle then lent out millions of dollars to Secord, Harry Aderholt, and Walter Greenburg who also owned a share of Banc de Columbia. Walter Greenberg used money from BC to purchase a series of office building in Miami including the one where Martin had his office called the Bayshore Office Building at 4770 Biscayne Boulevard.
In Arkansas. Twin Cities Bank of North Little Rock became a key player in the banking segment of the Iran Contra fraud. The banks legal consul was Rose & Hubbel, Hillary Clinton, the wife of new governor Bill Clinton, was a partner. Jonathan Flake, a key inside contact of Barry Seal and Richard Hamil, organized a series of limited partnership and syndications deals through bridge loans provided by Twin Cities Bank. Flake was involved with all different kinds of fraud related to Iran Contra. He personally was responsible for involving Congressman Alexander, Congressman Solaz, Congressman Dellums and others who eventually got hurt. It was a typical strategy of this secret team to try and compromise any politician who began to investigate them. Twin Cities Bank of North Little Rock acted as both submarket maker through its securities division as well as a financier in terms of holding the paper on non-recourse loans. Flake’s most notorious real estate fraud was known as the Boulder Property Limited Series of Partnerships.
Both Twin Cites Bank in Arkansas and Silverado in Denver were connected to Phil Winn of the Winn Group and his partners Leonard Millman and Steve Mizel. Millman also owned MDC Holdings, a publicly listed company and its brokerage subsidiary, the National Brokerage Group.
Walter Bush, the son of Vice President Bush’s Brother, owned a securities firm in Phoenix, Arizona called J. Walter Bush. The office was located in the Lincoln Savings and Loan Plaza, the bank Charles Keating made famous. The Keating 5 case as it became known cost taxpayers $3 Billion dollars and left 23,000 bond investors holding worthless paper.[i] Charles Keating specialized in providing financing for illegal security deals that existed only in file drawers. Across the hall from the securities firm was the office of the World Anti-Communist League and General Singlaub. The General had spent many years in Southeast Asia, and was a key organizer of heroin traffic moving out the “The Golden Triangle” during the Vietnam War. The profits from the drug trade were used by the WACL to unleash a war of terror against organized labor leaders in Latin and South America. The WACL included right wing military leaders from Taiwan and Korea, and also formers members of Hitler’s SS who were smuggled out of Nazi Germany and into Latin and South America who unleashed a wave of assassinations against popular 3rd World Political and Labor organizers. These former members of the “SS” formed the backbone of the South American and Central American drug distribution network set up by intelligence agencies.
The insurance fraud cutouts were run by Jack Singlaub. The scam was simple. Donations of luxury aircraft and yachts were sought from big time Republican Donors especially in Florida. The owners got huge tax breaks for over inflated values, and AIG insured for sometimes more than 10 times what they were worth. The items would then be stolen, given to friends after their identification number were changed, and everyone made a handsome profit. This fraud netted between $15 and $20 million. Claims were paid out by American International Group who looked the other way. Peter Coors and Phil Graham’s wife both gave suitcases with $2 million in cash for these projects.
Martin explained how insurance companies were paying out enormous claims for stolen property that they knew had simply been moved to a different location, and later resold with a forged title. There was also a tax shelter marketed under this fraud by Martin for Mitch Marr of WACL. Mitch used to come to Miami and Fort Lauderdale to drum up business. He would seek out willing, sympathetic Republicans, who were willing to donate expensive, private aircraft and expensive yachts and get ten times what these things were worth as tax deductions. The planes wound up at hangars from Boca Raton to Joplin, Missouri. In some cases, insurance policies had to be switched to American International Group (AIG) the largest in the country, American Reassurance, more commonly known as American Re and their subsidiary General Re. All were all controlled by very sympathetic Republicans.
Oil and Gas Fraud
Lawerence Richard Hamil, a defense department insider, became one of Richard Secords top lieutenants as he set up a series of 37 corporations all that contained the word “Gulf” in them. In virtually all Iran Contra frauds involving oil and gas leases, you see the word Gulf in the title. The Corporate Entities included: Gulf Coast Investment, Gulf Oil and Drilling Supply (GODSC), a partnership with Jeb Bush, Gulf Realty, partnership with Neil Bush, Gulf Offshore Trust Corporation, a partnership with George Bush, Jr., Gulf Asian Corporation, a partnership with Prescott Bush, the Vice President’s brother, and his son, Wally.
While most of us associate the word “Gulf “ with the Gulf of Mexico, but in reality it represented the Arabian Gulf of Bahrain were Gulf Oil and Drilling Equipment Company was headquartered. Richard Secord arranged through then Vice President George Bush’s. old friend, Ghaith Pharaon, the retired head of Saudi intelligence, for Gulf Oil and Drilling to purchase from the Saudi government oil and gas leases in the Gulf. The leases were worthless, but were made to look like a golden investment opportunity. On the basis of false valuation of the leases, GODSC borrowed millions of dollars through Intercontinental Bank or Great American Bank and Trust of West Palm Beach. Both banks failed according to Martin due to the weight of unpaid Iran-Contra loans.
Gulf Oil Drilling Supply Company is very difficult to segregate out as a single individual fraud because in reality it was a series of frauds. As the balance sheets of a company started to look profitable from laundered drug money, it was then repackaged and used for security frauds. GODSC had support from the international banking community including Credit Lyonnais and Banquet Paribas that lost over $60 million dollars to Gulf Oil Drilling Supply. GODSC had banking relationships with the Bank of Greece, Union Bank of Switzerland, and Jarlska Bank of Copenhagen. There Board of Advisers included Ghaith Pharaon, Andre Papandreou, Marcel Dassault, Jr.
By the time it was over the GODSC fraud amounted to more the $300 million. Martin believes that one of the main reasons that the reason the Kerry Committee, the Hughes Committee, the Alexander Committee, and other Iran-Contra investigating committees in the Hill as well as some people in the media shied away from GODSC was that it was connected to some many different frauds it would expose the magnitude and depth of the scandal. None of the ruling elite who owned the newspapers and made money off the scandals, wanted to let the public see the waves on the pond.
One of the most common vehicles for security fraud was the use of restricted share stock. Often called 144 stock, referring to the two year restriction rule in section 144 of the (SEC). A Start up company would often issue ten million shares of common stock but might have 100 millions shares of 144 stock. The 144 stock was sold to investors at 20 cents on the dollar. The stock was then used to obtain offshore bank loans principally through the Union Bank of Switzerland, but also through a whole host of offshore banks through the Caribbean.
The large French bank involved was Banque Paribas that had established a close relationship with George Walker Bush. There were two distinctly different type of Iran Contra banking relationships. There were cooperative bank that provided bridge financing but ultimately would be protected financially and kept whole. The Union Bank of Switzerland, Royal Trust of Canada, and Imperial of Canada, Banque Z of Curacao, Banco de Populare, were facilitator banks that would provide the start up capital to get the fraud rolling.
The bank would be made whole again by bleeding the 144 stock back into the marketplace at 40 to 50 cents on the dollar as the two year restriction was about to expire. Dealers and market makers who pushed the stock were guaranteed that in the end they would be made whole. The ultimate bag holder in these deals are the people that bought the hype, the people that bought the endless press releases, most of which were all bogus.
I typically Martin would make the representation that Company A had a tremendous new product or Company B had a contract with the International Monetary Finance Corporation. What the prospective hype didn't know is that the International Monetary Corporation was a shell corporation formed by the very same people who had rated the original fraud. It is the only way you could keep control of the hype. So you would have one bogus company signing a contract to purchase ten zillion widgets from another bogus company. Not only did the widgets not exist, but both the companies were essentially worthless.
In 1984 Barry Seal, Lawrence Richard, Hamil and Larry Nichols founded Trinity Oil and Gas Corporation (TOGC). Barry Seal’s history as a narcotics smuggler is well known, but his involvement in corporate fraud has been ignored by the press. The sole purpose of TOGC was to lauder the profits that Barry Seal was making shipping cocaine from South and Central America to Louisiana and Arkansas.
The Trinity Oil and Gas fraud demonstrates clearly how many different types of fraud were bundled together under the same corporate entity. As the drug money began to flow, a false balance sheet was created to borrow money against at participating banks. The final step in the process was the creation of what Martin called the “Trojan Horse.” A company that on paper was pushed to the public through various investment vehicles that looked as if it was a sure return on one’s investments as the stock was pumped to the public. When the plug was finally pulled the common investor from the street was left with nothing, and Federal Tax payers eventually paid for the bank fraud as the money was Federal Granulated in many cases.
TOGC was created by the law firm, of Rose & Hubbel in Little Rock, Arkansas. The Board of Directors included Dan Laster and Raymond "Buddy" Young, Jr. The Arkansas group included Freddy Lee Hampton, Calvin Edwards, George Rebb all of whom are now well know as Iran Contra conspirators. Large political contributions to TOGC crossed party lines in Arkansas and included both Republicans and Democrats. For a short time TOGC was traded publicly on the pink sheets by Meyer Blinder, Blinder Robinson Securities in Denver, Atlantic Securities, Balfour McClain Securities, Singer Island. All of these companies were owned by the National Brokerage Group of Denver.
When the price of oil had dropped in the early 1980’s, Sterling Oil and Lyric Energy of Oklahoma went bankrupt. TOGC purchased the oil wells from these companies that only produced 1 or 2 barrels of oil per day. The wells were then injected with acid which would cause the oil to mix with ground water. Non-profitable wells were now suddenly pumping 300 to 400 of barrel per day. Certain divisions of Marathon Oil, owned by Armand Hammer, were used to create false pump records. The laundered drug money was then placed into the oil revenue accounts to cover the missing oil. In all the Oil and Gas frauds, there are a common set of connections. They all used Marathon as there primary supplier, and they used GODSC for their drilling supplies. Invoices for the company were faked by Brodex Manufacturing, Global Associates and Ward Manufacturing that were receiving between $20,000 to $40,000 per month for their assistance. This is how all the money was bleed out of TOGC.
Jeb Bush at GODSC arranged for TOGC to buy old oil leases in Brazil and Argentina that were basically worthless. Jeb had purchased those leases from his father’s Zapata Oil for $1 each. GODSC then used the leases as collateral to borrow money from Iran Contra friendly banks in the Miami area, principally Capitol Bank. GODSC eventually defaulted on all their loans, and banks and investors were again left holding an empty bag.
Former President George Walker Bush, Jr. got his start in the oil business when he founded Arbusto Energy that later became Bush Exploration. After graduating from Harvard Business School, and failing in his initial run for the House of Representative in 1978, Bush Exploration faced with ever increasing losses was purchased by Spectrum Oil. Spectrum Oil was owed by William DeWitt, Jr. and Mercer Reynolds. The oil market again in trouble in the mid- 1980’s, Spectrum 7 began to sink in a pile of debt and it was purchased by Harden Energy. George, Jr. received $600,000 for his shares of Spectrum.
The Harken story was covered in great detail by Steve Pizo from Mother Jones Magazine in an October 1992 article called “Harken Energy And Insider Trading”. Harken Energy had been purchased in 1982 by a group of investors led by New York attorney Alan G. Quasha, a partner in the firm of Quasha, Wessely & Schneider. Willaim Quasha, Alan’s father, founded William Quaha and Associates, one of the first international law firms in the Philippines in 1946. He was a close friend and adviser to Ferdinand Marcos and an adviser to the Nygan Hand Bank in Australia that laundered drug profits out of Southeast Asia.
Harken went public in 1987 in a $25 million dollar deal that was under written by Stephens, Inc., a brokerage firm, from Little Rock Arkansas. The legal work for Stephens was handled by Rose & Hubbel as were many of the Arkansas Iran Contra Frauds. The deal was run through a subsidiary of the Union Bank in London that was later engulfed in a scandal that led to the down fall of the Labor government in Australia, and the Nygan Hand CIA controlled bank.
Harken, according to Martin, became a classic fraud. George Bush, Sr. arranged a bribe through former head of intelligence Ghaith Pharaon, and Harden would beat out Armoco in obtaining the right to drill for oil in Bahamian. Harden’s Stock skyrocketed as investors bought the hype. Money poured into the company from banks and investors who wanted to cash in a sure money winner. In reality, Harken lacked the require capital to take on a major oil drilling operation half way around the world.
Before a single drop of oil had been pumped, the Bush National Security team began to contemplate the invasion of Iraq that would surely destroy the chance for any new oil ventures in the Gulf. Nine months before Harken’s stock crashed causing some $38 million in losses, George, Jr. sold his stock. According to Martin a lot of different large Republican donors made huge sums of money just as George, Jr. had.
"Harken is not hard to understand -- it's easy," says Charles Strain, an energy-company analyst in Houston. "The company has only one real asset -- its Bahrain contract. If that field turns out to be dry, Harken's stock is worth, at the most, 25 cents a share. If they hit it big over there, the stock could be worth $30 to $40 dollars a share. It's a pure crapshoot." [ii] There were also active oil and gas frauds taking place in the states of Kentucky, Illinois and Nevada.
Nevada- Mining Fraud
The fraud that took place in Nevada was a perfect example of how through the control of State governments, Iran Contra profiteers generated millions of dollars in profits. According to Marin, George Bush, Sir, controlled Secretary of State, Frankie Sue DelPapa, would substitute Corporate records or make Corporate records disappear is necessary.
Helena Mining was a division of Cosmos Development that mined gold, silver and platinum in open pit mines. Republicans controlled the Bureau of Natural Resources in Nevada who was responsible for recording the quantity of minerals mined in Nevada. They would forge records much like what was done with Oil and Gas fraud, and the cash for the missing minerals was simply supplied by laundered drug money.
In the case of Cosmos Development Delpapa substituted Corporate records allowed George, Sr. to swindle the Durhan Family out of millions of dollars worth of Gold. When the Gold Certificate Scandal was investigated by E.E. Eckert of The Contact, he found that the Comos Development fraud was part of a multi-billion dollar fraud involving Banque Paribas, Credit Lyonnais, Union Bank of Switzerland, National Bank of Greek Daiwa Bank and Sumitomo Bank.
What started out as a simple $75 million fraud, turned into a multi-Billion dollar fraud. A $50,000 investment is simply rehypothecated through additional loans and borrowing at greater and greater amounts of money. Some of the new loan money is used to pay off part of the old loans to gain access to even larger loans. Credit Lyonnais was one of the very few banks to ever admit that it lost money, $68 million on this fraud.
Eckert knew and the Financial Times of London knew that George Bush, Sr. signature was on loan papers at Credit Lyonnais. FT reported that Credit Lyonnais had a fire in their reserve document storage facility in Paris and there were three or four file cabinets contents that got burned up, including all of the Bush documents.
Real Estate fraud often leaves a paper trail, and when busted out HUD properties were bought and repackaged (fraudulently purchased, fraudulently repackaged, aid fraudulently resold, it left a much larger and more easily discernible paper trail to trace these frauds. Although Jeb Bush and his younger brother Neil, are the two Bush boys most commonly mentioned in the same breath, with Iran-Contra real estate fraud, George Bush, Jr., George Bush Sr., as well as George Bush, Sr.'s brother, Prescott, and his son, Walter, were very much connected to the very same real estate frauds.
Neil was almost exclusively real estate as he gained control of Gulf Realty a CIA proprietary from the 1950’s until late 1970’s. Neil with his two partners, Bill Walters and Ken Good, began to use it for a complex web of land fraud that stretched across Florida, Texas, California, and Connecticut. It was a really intriguing web of land fraud. The Boca Chica Development, the Destin Country Club Development — these were all deals that were designed to be frauds. They went down the tubes. Ultimately they were bailed out with public money to the tune of $780 million apiece. There were about 100 such projects in all which were ultimately bailed out by some public guarantee institution. It wasn’t necessarily the FDIC or the FSLIC, but in some cases, very esoteric public guaranteed funds were used to bail these deals out.
Florida- Destin Country Club Project
A prime example of the Real Estate fraud during Iran Contra is the Destin Country Club Development in Florida. It was originally designed as a upper middle class residential oasis with a championship golf course, swimming pool, tennis courts and clubhouse. The estimated development cost was $78 million to build, and homes would sell from $199,000 to $499,000. It was your typical Florida gated community.
Many of the investors for the project were members of GOPAC who purchased equity in the project. These same GOPAC members got to buy in the development at $.50 on the dollar when it went belly up. The originator of the deal was Gulf stream Partners that was controlled by Neil Bush, and his Bill Walters and Ken Good. Ken Good and Jeb Bush managed the Bush Cordina Real Estate , where George, Jr. received pay for being on the Board of Trustees. Your classic political no show job.
he initial start up capital, $50 million, for the project came from the Silverado Savings and Loan where Neil Bush would later receive a slap on the wrist for Banking fraud. Like all frauds the front end of the operation needed to look impressive. A sales office and a couple of models where built, and a multi page brochures were designed to give the illusion of the wonderful transformation that was about to take place. Al Martin was one of the people marketing the deal. Like many of the Iran Contra Land Fraud, the land was never even purchased only the rights to the land were obtained.
The deal began with a $9 million payment for the right to purchase to the land. According to Martin, another $4.1 million was spent for legal costs creating the limited partnership, beautiful brochures of the new oasis that was about to be created, and other red herrings. It cost about $13 million to set it up, but the profit from the deal was $350 million. The Destin Deal as Martin describes it was a feel good deal that allowed Congressmen, Senators and Governors that were sympathetic to “The Cause” to make large sums of cash on property they bought with non-recourse notes issued by Iran-Contra friendly banks. American Bank and Trust of Pensacola, Florida, a little tiny one-horse bank owned by BCCI issued $153 million of non-recourse notes. According to Martin Congressman Porter Goss, Paula Hawkins, Senator Graham, and Senator Mack of Florida, all were given these non-recourse notes.
Despite the fact that Senator Graham was a Democrat, he was a major participant in Iran Contra fraud. Graham turned a blind eye to Iran Contra fraud and in return he was paid off through the sale of his own land through Swissco Management Group. A profit later estimated to be $57 million by the Miami Herald. Ray Locker, Tampa Tribune broke this story and was suddenly promoted to editor to prevent him from writing about any more Republican involvement on a personal recommendation of Porter Goss, no less. I want to mention Porter to some degree as an example of how senior members of Congress made a fortune in terms of illicit Iran-Contra profiteering at the time. This project added another $78 million dollars to taxpayer bail outs.
I essentially along the same lines, a lot of Republicans members made money by leveraging themselves into deals and then settling there outstanding debts for nothing or near nothing as they would borrow money on the deals and then default. Porter, for example, made $12-13 million on these deals according to my calculations.
Silverado had provided the initial $50 million bridge loan to get the deal underway. Neil Bush and his partners then went to Marvin Warner at Great American Bank and Trust, an Iran-Contra sympathetic bank with its main office in West Palm, Florida. American lent another $17 million that was used to keep the original loan afloat as the project gained momentum. The partners including Jeb, Neil, George, Jr. and a host of others used their so called general partnership equity in the Destin Deal, and they used it to collateralize additional loans. For instance, that's how Jeb was able to get a $4 million loan at Broward Federal Savings and Loan that was later defaulted on.
Broward Federal Savings and Loan was owned by two brothers who themselves were subsequently indicted for bank and securities fraud and because they talked about the bank's relationship with Jeb Bush and others. It very nearly became a problem for Jeb. Of course, one of these brothers somehow died under unusual circumstances before going to trial, and the other brother simply pled guilty and nothing further was ever said. The bank simply went into receivership. The general partners had taken their general and partnership interest in the deal and rehypothecated that to bank loans. At the end of a typical operation $3 to $4 million dollars per principal could be pocketed.
Destin Country Club Development got hypothecated through a total of 53 banks worldwide that helped pump up this giant ponzi scheme, rehypothecation of fraudulent interest and refinancing of fraudulent interests. There was initially a core group of banks that needed to be protected to get you rolling. But at the next level of the ponzi scheme Martin knew he had sympathetic banks that knew the loans that they issued would never be repaid. Al Martin had a list of 140 banks that had gone into receivership because they had participated in this criminal enterprise. Many of them like Orange State Bank of Miami, Ocean Bank had between $200 and $300 million in outstanding bad loans on their books when they went into receivership.
How did these congressmen, governors and senators get money out of the Destin Country Club Development deal? It was very simple. They were non-recourse notes that they had supposedly borrowed to begin with. A deed equity interest would show that a person had $7 million for his equity interest in the deal, when in fact no equity existed at all. The bank would issue a loan against this asset. Ultimately when the project failed and went into default, the borrower paid back maybe $3 million of the loan money leaving a tidy profit of $4 million.
In the Destiny Country Club project, the borrower never paid any interest on the loan as the limited partnership paid the interest on the loan for the first 18 months before it collapsed. When the Destin Country Club project collapsed it brought down the American Bank and Trust of Pensacola with it. The Comptroller for the State of Florida, Gerald Lewis, who was responsible for investigating the banks failure, claimed that he was unaware that the bank was really owned by BCCI. Marvin Warner, a major shareholder in the bank, was the second cousin of Lewis. Lewis was eventually implicated in kickback schemes related to these same bank failures in Florida, and lost re-election. As many of these stories end, he retired comfortably to large estate in St. Luica. Graham swapped out some Gulf Stream Property which was turned into Swissco Management. Swissco was controlled by Carlos Cardoen, Destin Country Club deal.
A good example during Iran-Contra was the connection between Olympia & York Development Group in Canada and the U.S. subsidiary, The Cadillac Development Group, headquartered in Miami. It worked closely with Jeb Bush. Cadillac’s specialty was busted out HUD section 8 property deals. These properties qualified for virtually tax free financing often with government guarantees of the loans. These properties would often be refinanced endlessly. Bush Cordina and Cadillac Development made investments in the worst sections of black, and Latino neighborhoods that where filled with Section 8 properties. Section 8 housing was never scrutinized by government official who always turned a blind eye to what was going on.
Section 8 was a pre-Iran Contra scandal originally set up during Johnson “Great Society” pushed to help the poor. It was set up to let Real Estate Developers make millions of dollars so much for the poor. Martin repacked a lot of HUD deals over his 20 years working in the business. A property would go bankrupt and then HUD would write it off. They would never perused the defaulters who frequently repurchased the property through another shell company, and then they would start the fraud all over again. Martin was involved in a 830 unit building in Miami spread all along the Overtown, Hialeah border. Between 1984 and 1986 that property was busted out and picked up 7 times, and no one ever improved the property. The Bush Company involved was called Black Bird Investment Group. It sucked over $83 million out of HUD during that time.
After the falling apart of Iran-Contra in late 1986, then there were some prosecutions. But those prosecutions were only those where it became politically expeditious. Certain parties on the upper rungs of the ladder used prosecution to hide there own involvement and discredit witnesses, plausible deniability.
The International Medical Group controller, Michael Recary fled the country in 1990 and 1991 leaving taxpayers with another $350 million to pay off. He escaped within 3 hours of a warrant being issued for his arrest. George Fernandez gave him a car owned by Bush Realty Corporation to drive to Miami International Airport where he boarded a plane for Venezuela and lived openly for several years until pressure from articles written in the Miami Herald and the Wall Street Journal forced his return to the United States. George Fernandez was later murdered. Recarey then joined a list of about two dozen people who were officially sought by the United States government on various bills of indictment, but unofficially not wanted for political motives.
While DEA publications and efforts focused on the threat of drugs over the Mexican border, a new supply network was set up.
"Under North's direction, Shackley and Clines recruited their old Operation Mongoose pals to run contra's re-supply operation at El Salvador's Eloping, formed shadow companies to build clandestine jungle airstrips-established the Contras as a link in the Medellin Cartel's Andesto-Maimi cocaine trail."[iii]
Martin describes 6 principal cocaine traffickers in the first part of his book; Bahamas, Arkansas, Detroit-Canada, Florida, Mexico-Israeli-Mossad. The real unanswered questions are: How did this cocaine get distributed? How did it get sold? Who bought it? Cocaine was distributed through a series of network that spanned the entire continental United States. This distribution network included the Hell's Angels, various militia organizations and fringe groups acting as subcontractors. Black Caucus Maxine Waters actually talked about this publicly, the connections that North had with the militias and the Hell's Angels. No money was ever provided to pursue these serious allegations.
Michael Palmer and Carben Industries
Carben Industries was a corporation based in San Josa, Costa Rica that was owned by Michael Palmer. The Board of Directors and Offices included Oliver North, Richard Secord, CIA Costa Rican Station Chief, Joe Fernandez. Palmer was eventually indicted in Miami, and faced a possible sentence of 40 years behind bars, and a lot of resources were committed to protect Palmer. He pled guilty and served 117 days in the Federal Metropolitan Correction Facility in Miami, and then was quietly relocated to Honduras.
Carben Industries had airplane hangars in Detroit, Michigan, Mena, Arkansas, and Miami, Florida. All of these location became primary drop locations for the movement of cocaine into the United States. Opa Locka Naval Air Station in Miami was the headquarters of Michael Palmers Miami operation. Only about 60% of the air base was used by the Navy and the rest was rented out. Carben Industries leased 4 hangars. Carben Industries and Southern Air Transport shared many of the same corporate accounts including a limousine service, hotel suites, corporate charge, and travel agency. Southern Air Transport paid the bills for corporate expenses related to Carben Industries employees, according to Martin.
Michael K. Palmer spent most of his working hours operating out of Detroit. Under the direction of Barry Seal, the Defense Intelligence Agency, and Southern Air Transport, Palmer controlled the flow of narcotics in and out of Detroit, Michigan. When not working Palmer socialized with Al Martin and his drinking buddies in Miami, Richard Secord, Jim Langston, President of Southern Air Transport (SAT), and Bill Mason, SAT Vice President. Palmer lived the good life with guest memberships at all of Miami’s most exclusive clubs including the Jockey Club, the Ocean Club and the Turnberry club.
Detroit located on the Canadian Boarder was the major hub for narcotics moving from Canada into the United States. Cocaine moved across the Canadian border into Detroit by truck to a small air strip outside of Detroit where Michael Palmer owned several aircraft hangers. The cocaine was then transported by Polar Air Aviation (PAA), subsidiary of Southern Air Transport (SAT).[iv] Polar Air got its name from the fact that its transportation routes are mostly in the cold north Canada and Frontier. PAA also flew cocaine across the Canadian Border.
So Detroit is important link in the Iran contra Story for two reasons. It exposes the “Canadian Connection” another part of International part of the Iran Contra Story that was never talked about during congressional Hearings, and Southern Air Transport through their various subsidiaries distributed cocaine all over the Untied States. While Polar Aviation flew most of the Northern Routes. Brad Ayers reported back to his superiors at the DEA that Polar Aviation was distributing drugs and his report like many during this era fell on deaf ears.
Palmer’s northeastern corridor route moved cocaine from Nova Scotia, and Maine. The Canadian Intelligence service worked in conjunction with the CIA on this project. A custom agent in Portland, Maine, Peter Videnieks, intercepted flights that contained cocaine. His reports on the interdiction were submitted to the Southeastern Regional Custom Chief, George Weiss who promptly put them through the shedder. People associated with the flights and the reports, mysteriously died. As usually happens, when there is a break in the chain of command in an illegal operation, Vickenieks was relocated to another office. The chief of customs at the time Billy Von Rabb wanted to expose the fact that he had been told by the Vice Presidential Task Force on Drugs to allow certain aircraft into our territorial water and air space. He was later brought up on Bogus charges to keep him silent. George Weiss was rewarded for his loyalty to the cause by being made head of Customs.
Vortex air was another asset of Michael Palmer that was actually mentioned in government reports detailing the relationship between the Nicaraguan Contras and Cocaine. And this is where the story almost becomes unbelievable as it turns out that between January and August of 1986, the State Department issued checks to Vortex and 3 other drug running couriers to the tune of $806,401.02.[v]
Office of Naval Intelligence (ONI) & CZX Productions Ltd.
Many people mistakenly believed that CIA, DIA, or NSA was the real power broker during Iran Contra, Al Martin thought the prime power for the scandal rested in the Office of Naval Intelligence. ONI had a God like power to control liability related to weapons and narcotics trafficking during Iran Contra. Of the roughly 4500 articles written about Iran Contra only 6 mention ONI is any meaningful context.
The ONI operation has always been located in the Western US. The principal cut out for ONI is Evergreen Airlines located on a small air strip in Medley, Oregon called “Mena of the West” by many. A group within NOI called “Goal Oversight Development”(GOD) was led by retired Admiral Elmo Zumwalt, and included other retired Generals like Admiral Henderson, Admiral Pauley, and Admiral Collins. As Martin describes it “their powers are virtually god-like, their ability to assassinate people, to make people disappear, to make documents and entire files disappear anywhere, anytime, and their ability to corrupt judicial proceedings, were enormous. Their power is such that the largest media organizations are frightened of it.”
Journalists top the list of people assassinated by NOI and the GOD committee. Paula McCollum, Keith Wickenham, John Lear, and Lars Hansson lead the list of journalists that were killed because they investigated NOI activities. Bill Moyle was forced out as well. Major General Gray Eitel testified to Congressional Committees and filled his own Civil Lawsuit on the behalf of US citizens regarding the details of the eventual bankrupt Evergreen Airlines. And while Eitel made a lot of noise in the media when he first started, he later fell silent. Martin states: “You cannot deal with them in terms of a payoff or in terms of getting somebody back in the woodwork that might know too much and helping them out financially. They never deal that way. They only threaten and they liquidate. That is their only way of keep their own laundry clean. That's the only way they know how to operate and it's the only way that I've ever known them to operate. I still remain in fear of them, as does anyone who wants to stay alive.”
The ONI narcotics operations in 1985 included 4 locations: Spokane, Washington, Medford, Oregon, Fire Lake, Nevada, and Phoenix Arizona. The narcotics were transported primarily through Mexico for the NOI operation that was totally separate from the CIA cut outs. The money went into covert operations and what Martin called “The Admirals Retirement Club”, as many of these Admirals retired with million dollar homes and their own private jets.
As Eitel began investigating Evergreen Airlines he was reassured, threatened, intimidated and harassed in every way imaginable. It was Eitel lawsuit that would eventually force Evergreen into bankruptcy. By declaring bankruptcy Evergreen gained favor in the local courts and was able to hide documents and made obtaining information much more difficult. This was a common strategy when operations became compromised during the Iran Contra Days. Bankruptcy laws protected members of the Corporation even though they had been involved in fraud on a grand scale.
I went to speak about another ONI cut out, CZX Productions that stood for Casey Zumwalt X-Files. 60 minutes did a piece about this cut out, but it was a simple story about a small airline with connections to the CIA running narcotics. Of all the Iran contra operations, this was the most sinister and secretive. Martin offered to talk with 60 Minutes about the details of the operation, but not without financial enumeration as he knew the cost for going public would be too great.
Compromised: Clinton, Bush and the CIA
“The public ….has the right to know about the CIA sponsoring candidates for U.S. Presidency and, thereby, compromising themselves and their values. We wrote this book because, otherwise, there would be no assurances that the truth would ever be told.”[vi]
In 1994 Terry Reed and John Cummings wrote, Compromised: Clinton, Bush and the CIA, that outlined a strategy where by the Bush family sought to compromise the Democrats by involving them in a scandal he had been part, cocaine trafficking. During the early 1980’s, Arkansas became a central hub not only for planes landing with shipment of Cocaine from Central America, but also for the laundering of the profits from the trade. Terry Reed had been recruited by Oliver North to help coordinate the trade of illegal weapons and cocaine with North’s partners in Central America. Central in this planning effort was the notorious Barry Seal.
Barry Seal had played a major role in CIA complicity in the drug trade for many years. He knew more about the inner workings of the DEA, CIA, FBI and other agencies that turned blind eye to US government involvement in drug trafficking than anyone. In a 1986 the Louisiana Attorney General wrote a letter to Edwin Messe stating that Barry Seale had been personally responsible for the importation of $3 to $5 billion worth of cocaine into the United States.
Martin states that on May 23, 1984 the Justice department began a 2,500 page debriefing to sanitize Barry Seals records. Seal had been on of the original members of “Operation 40” that organized covert activities against Cuba so this task of sanitation must have been a long one. On September 11, 1984, Martin attended a meeting that included Oliver North and Dewey Claridge that sanctioned Barry Seal as a narcotics smuggler for the CIA.
According to Reed, Seal’s planes were outfitted with sophisticated military style communication systems that received its flight plans from satellites allowing it to evade detection flying in and out of the United States. On one such flight Seal reveals to Reed how cocaine was being used to neutralize Bush’s potential political opponents.
"So you've got direct knowledge of the Republicans trying to neutralize some Democrats before they can nuke Bush with this?"
"Hell yeah. I've been part of it. Remember in that meeting I told you I had a plan to blow the lid off the whole damn Mena deal and shut it down due to adverse publicity? Well, what I didn't tell you was that project was already in effect, and the Republicans were already trying to neutralize some important people in Arkansas...namely the Clinton family."
"Let's don't call it cocaine. Let's just call it neutralizin' powder. Least that's the way the Bush family saw it. This is just one family warrin' against another. Just like the Mob. "[vii]
In 1996 Michael Ruppert, prepared a statement for the US Senate Select Committee on Intelligence investigating allegations of US government involvement in drug trafficking. Ruppert had dedicated his life to stopping US government involvement in drug trafficking since discovering as a Los Angles police officer that the enforcement community was turning a blind eye to the importation of drugs into the Untied States. He documented efforts by the CIA in operation Pegasus, and Watchtower to install radar beacons that allowed planes flying out of Columbia to evade radar as they headed for Manuel Noriega’s Panama. He states: The missions are Iran-Contra era operations and directly link to admitted Agency operations at Mena, Arkansas where tons of cocaine were smuggled by Agency personnel into this country. That smuggling took place under direct orders from the highest levels of this government.
The investigative material, contrary to denials, is overwhelming, irrefutable and shows a direct link between then Governor Bill Clinton and CIA operations.[viii] Like many before them, Reed and Seal suffered the consequences of eating from the hand of the beast. Reed survived, Seal did not. Reed was framed in an insurance fraud scheme. During the discovery phase of his trail, he obtained a 1987 document proving what he had known all along that the FBI was warning the DEA and the CIA that the operation in Mena Arkansas was about to be exposed by the media. The documents also confirmed that Seal was a CIA operative.[ix]
Barry Seal a year before being sentenced on drug trafficking charges, traveled to Washington DC to testify before the Presidents Commission on Organized Crime. He stated that he was moving drugs for the cartel with direct support of the US government. He described how he had used Department of Defense navigation and communication equipment designed for nuclear war to avoid being detected by military radar while making gun and drug shipments.[x] Shortly after accepting a plea bargain from the US Attorney in Louisiana, Seal died in a hail of gun fire from members of the Medellin cartel on February 18, 1987. The media characterized the assassination as a successful attempt by the Medellin Cartel to silence a potential witness against them. Those who understand history know this was the killing of a man who could connect many powerful government officials with a coordinated effort to raise money for illegal political activities at home and abroad.
In 1997 article titled, “CIA Linked to Seal’s Assassination”, Daniel Hopsicker interviews two New Orleans attorneys who provide important details about Barry Seal. Sam Dalton, representing the Seal’s Columbian assassins, questioned the CIA about its involvement in Seals death during the penalty phase of their trail. During discovery Dalton gained access to the contents of Seal’s trunk. It was apparent that the FBI had done a good job removing any incriminating evident before they handed over the contents of the truck, but they missed the “smoking gun”. Dalton states: "But they had missed a few things that indicated just how valuable that trunk was. Because that's where that phone number was. That's where we found George Bush's private phone number. They were regularly talking to each other very seriously over what was probably a secure phone. Barry Seal was in direct contact with George Bush.” [xi]
Lewis Unglesby who represented Barry Seal in 1986 recalled the first time he became aware of how high Barry Seal’s connections in the Untied States government were. He states: “I sat him down one time, and said: I cannot represent you effectively unless I know what is going on. Barry smiled, and gave me a number, and told me to call it, and identify myself as him (Seal.)
I dialed the number, a little dubiously, and a pleasant female voice answered: 'Office of the Vice President.'"
"This is Barry Seal," Unglesby said into the phone. "Just a moment, sir," the secretary replied. "Then a man’s
voice came on the line, identifying himself as Admiral somebody, and said to me, 'Barry, where have you been?'"
"Excuse me, Sir, "Unglesby replied, "but my name is Lewis Unglesby and I am Barry Seal's attorney.” There was a
click, Unglesby relates. The phone went dead. “Seal just smiled when I looked over at him in shock, and then
went back to treating me on a need-to-know basis."[xii]
In an article originally appearing in Penthouse magazine in 1995, and later mysterious dropped by the Washington Post after accepting it for publication, “The Crimes of Mena”, Sally Denton and Roger Morris: “The tons of drugs that Seal and his associates brought into the country, officials agree, affected tens of thousands of lives at the least, and exacted an incalculable toll on American society. And for the three presidents, the enduring questions of political scandal are once again apt: What did they know about Mena? When did they know it? Why didn't they do anything to stop it? ….. The crimes of Mena were real. That much is now documented beyond doubt. The only remaining issues are how far they extended, and who was responsible.”[xiii] The Clintons’ involvement in this scandal has done more to harm the Democratic Party over the last 20 years than any other single issue. The illegal drug trade has provided the money and political muscle to mislead the public on the issue of Homeland Security.
Israel and the Mexican Connection
The next operation was what Al Martin liked to call the "Jewish Threesome." It included Eddy Singer, Yoram Ettinger, a member of the Israeli Knesset, and Lt. Col. Ari Klein, a retired Israeli intelligence officer who had been Mexico City's station chief for the Mossad during the 1980’s. This group was basically another Barry Seal cut out who ran many of the CIA trafficking operations. The Singer operation was never discussed during Congressional Hearing because it established an undeniable link between the CIA and Mossad. Yoram Ettinger later became a key player in trafficking weapons, high technology weapons and design to both the Chinese and the Russians.
The Singer Operation moved about more than 1000 kilos of cocaine from Mexico into the Untied States, as cash flow from this operation amounted to over $300 Million per month. The organization had been assembled using Israeli government connections between Ari Klein and past Mexican President, Jose Lopez-Portillo, who was later indicted for fraud, narcotics and weapons trafficking. The operation was started in the early 1970’s.
In 1981 Enrique Camarena was assigned to the Guadalajara, Mexico Division of the DEA. Camarena became famous for his ability to infiltrate drug trafficking operation in Mexico and Latin America. Al Martin believes that Camarena began to understand the inner working of the Singer operation, when on February 7, 1985 he was kidnapped, tortured for several days. His mutilated body was discovered March 5. He had been murdered by the Federal Mexican Police with complicity from the CIA because he was about to expose the long standing cocaine operation run as a partnership between the CIA and Mossad. Both the Kerry and Hughes Committees wondered who the CIA was trying to protect in the Mexican government and the Mexican Federal Police. The person was Gen. Raul Medina, Chief of the Mexican Federal who actually ordered the death of Enrique Camarena at the urging of the CIA. He knew about the connections and the orders, how it was done, and how Carmarena's killers were protected.
Former Mexican dictator Jose Lopez-Portillo who was President in Mexico when the price of oil had skyrocketed and Mexico discovered huge oil reserves of their own, was now being investigated for fraud concerning non-existent oil well leases. The frauds included participation by Zapata Corporation, Tidewater Corporation and Harken Energy. Reagan and Bush had to go to extreme lengths to keep the Bushes out of the indictment, but they finally succeeded. Economic Hitmen?
Legendary DEA agent Celerino Castillo step into the void left after Camarena’s assassination, and began to expose what he knew. He was immediately discredited by the DEA and dismissed. Castillo would later become a driving force behind the movement in the US to expose government involvement in the narcotics trade. Castillo was largely responsible for Gary Webb series in the San Jose Mercury that brought government involvement in the narcotics trade under the spotlight. He later authored a Federal Court Document asking for George Herbert Bush to be indicted under the Drug Kingpin Laws.
Danny we hardly knew you
On August 10, 1991 at 12:30 in the early afternoon, a hotel maid at the Sheraton Hotel in Martinsburg, West Virginia knocked on the door on room 517. When no one answered she used her hotel pass key to gain entry into the room. As she opened the door, she could see blood spatter all over the bathroom floor and let out a tremendous scream. In the bath tub was the nude body of Danny Casolaro who wrists had been slashed multiple times. There was blood splatter not only on the floor, but also on the tub walls. Although Danny had carried many of his papers related to his research to West Virginia with him for a meeting on what he called "The Octopus", there was not a briefcase, a file or even a single piece of paper recovered from the room.
By the time that this so called "Suicide" was reported to the press on Monday, August 12, Casolaro's body had been cremated eliminating the possibility of an autopsy. The last person to see Danny alive was Bill Turner, a former Hugh Aircraft employee, who met with Danny at 3:00 PM on the Friday afternoon before his death. Turner refused to discuss the details of the meeting he had with Casolaro, but he did describe his mood as "scared shitless", when Danny showed him photo copies of papers linking Oliver North directly to the Bank of Credit and Commerce International. “I saw papers from Danny that connected back through the Keating Five and Silverado.” Danny had photocopies of checks made out to Adnan Khashoggi, an international arms dealer with connections to the House of Saud, and Manucher Ghorbanifar, arms dealer and IranContra middleman.
In the days before his death, Danny had called Ann Klenk, a former associate of D.C columnist Jack Anderson and told her he had solved the “Inslaw Case” that he had been researching. Inslaw was owned by a former Justice Department employee, Bill Hamilton who had developed a new software package called “Promis”, Prosecutor's Management Information System. It was designed as a tool capable of monitoring and collecting all the information prosecutors needed to manage large scale investigations into organized crime, drug trafficking and banking fraud.
Danny had spent the last year of his life trying to understand the Inslaw computer software case. Bill Hamilton claimed that the Reagan administration had stolen the software, and was selling it overseas without paying him the necessary royalties for his work. Hamilton believed he had been cheated out of millions of dollars. What Danny discovered was that the Inslaw case was connected to the Iran Contra Affair, the October Surprise, The Bank of Credit and Commerce bank fraud scandal, and the Music Corporation of America.
Casolaro was despondent over how the story ended, telling Klenk she could have the Inslaw case because, It’s just a little piece of the puzzle anyway. The Inslaw case had led Danny into “"Bermuda Triangle of spooks, guns, drugs and organized crime."[xiv] According to Klenk, Danny quickly realized that the real story behind the Inslaw Case was the drug aspects as related to the Central Intelligence Agencies involvement in the narcotics trade around the Globe. The tangled web between the Wackehunt Corporation and the CIA provided fertile ground for Danny’s Investigation.
Shortly after Danny’s murder, Carol Marshall, a friend of Danny’s, decided it was important to publish the material that Casolara had accumulated, and she began to pick up where Danny’s path to the truth had tragically ended. “I have in my possession five boxes of documents, obtained from a convicted methamphetamine chemist whose closest friends were a 20-year CIA operative and a former FBI Senior-Agent-in-Charge of the Los Angeles and Washington D.C. bureaus. The labyrinthine involvements of these people and their corporate partners is revealed in this manuscript, along with information obtained by Washington D.C. journalist Danny Casolaro prior to his death in 1991.” In October 1996, she published, The Last Circle, a comprehensive overview of Danny Casolaro’s research. Danny had “told friends that he "had traced the Inslaw Case and related stories back to a dirty CIA 'Old Boy' network" that had begun working together in the 1950's around the Albania covert operations. These men had gotten into the illegal gun and drug trade back then and had continued in that business ever since. Before his death, Danny had made plans to visit the Wackenhut Corporation in Indio, California, and even considered naming his book, "Indio."[xv]
On May 18, 1990 Michael Riconosciuto phoned Bill Hamilton who had written the “Promis” software package, and told him that if he wanted to prevail in Federal Court with his lawsuit against the people responsible for stealing his software, then the key fact was that the trail of the criminals involved led back to the October Surprise. Riconosciuto had traveled to Iran in 1980 with Dr. Earl W. Brain and “paid $40 million to Iranian officials to persuade them NOT to release the hostages before the presidential election in which Reagan became president of the United States.[xvi]
According to Riconsciuto, Dr. Brain had hired him to modify PROMIS software for sale to different countries around the world. Danny created a back door into the software that would allow the United States government the ability to spy on any foreign government that used Promis. At the time Dr. Brain was the head of Infotechnology, Inc. whose holding included United Press International (UPI). The company got its start through the junk bond market.[xvii]
The attorney for the Inslaw Case was Elliot Richardson who had spent his entire career serving in government. He had resigned as Attorney General instead of firing the Special Watergate Prosecutor Archibald Cox in what came to be known as the “Saturday Night Massacre”. Richardson composed an affidavit for the Inslaw case for Riconosciuto to sign.
It read as follows:
"I Michael J. Riconosciuto, being duly sworn, do hereby state as follows:
"(1) During the early 1980's, I served as the Director of Research for a joint venture between the Wackenhut Corporation of Coral Gables, Florida, and the Cabazon Band of Indians of Indio, California. The joint venture was located on the Cabazon reservation.
"(2) The Wackenhut-Cabazon joint venture sought to develop and/or manufacture certain materials that are used in military and national security operations, including night vision goggles, machine guns, fuel air explosives, and biological and chemical warfare weapons.
"(3) The Cabazon Band of Indians are a sovereign nation. The sovereign immunity that is accorded the Cabazon’s as a consequence of this fact made it feasible to pursue on the reservation the development and/or manufacture of materials whose development or manufacture would be subject to stringent controls off the reservation. As a minority group, the Cabazon Indians also provided the Wackenhut Corporation with an enhanced ability to obtain federal contracts through the 8A Set Aside Program, and in connection with Government owned contractor operated (GOCO) facilities.
"(4) The Wackenhut-Cabazon joint venture was intended to support the needs of a number of foreign governments and forces, including forces and governments in Central America and the Middle East. The Contras in Nicaragua represented one of the most important priorities for the joint venture.
"(5) The Wackenhut-Cabazon joint venture maintained close liaison with certain elements of the United States Government, including representatives of intelligence, military and law enforcement agencies.
"(6) Among the frequent visitors to the Wackenhut-Cabazon joint venture were Peter Videnieks of the U.S. Department of Justice in Washington, D.C., and a close associate of Videnieks by the name of Earl W. Brian. Brian is a private businessman who lives in Maryland and who has maintained close ties with the U.S. intelligence community for many years.
"(7) In connection with my work for Wackenhut, I engaged in some software development and modification work in 1983 and 1984 on the proprietary PROMIS computer software product. The copy of PROMIS on which I worked came from the U.S. Department of Justice. Earl W. Brian made it available to me through Wackenhut after acquiring it from Peter Videnieks, who was then a Department of Justice contracting official with responsibility for the PROMISE software. I performed the modifications to PROMIS in Indio, California; Silver Spring, Maryland; and Miami, Florida.
"(8) The purpose of the PROMIS software modifications that I made in 1983 and 1984 was to support a plan for the implementation of PROMIS in law enforcement and intelligence agencies worldwide. Earl W. Brian was spearheading the plan for this worldwide use of the PROMISE computer software.
"(9) Some of the modifications that I made were specifically designed to facilitate the implementation of PROMIS within two agencies of the Government of Canada; the Royal Canadian Mounted Police (RCMP) and the Canadian Security and Intelligence Service (CSIS). Earl W. Brian would check with me from time to time to make certain that the work would be completed in time to satisfy the schedule for the RCMP and CSIS implementations of PROMIS.
"(10) The proprietary version of PROMIS, as modified by me, was, in fact, implemented in both the RCMP and the CSIS in Canada. It was my understanding that Earl W. Brian had sold this version of PROMIS to the Government of Canada.
"(11) In February 1991, I had a telephone conversation with Peter Videnieks, then still employed by the U.S. Department of Justice. Videnicks attempted during this telephone conversation to persuade me not to cooperate with an independent investigation of the government's piracy of Inslaw's proprietary PROMIS software being conducted by the Committee on the Judiciary of the U.S. House of Representatives.
"(12) Videnieks stated that I would be rewarded for a decision not to cooperate with the House Judiciary Committee investigation. Videnieks forecasted an immediate and favorable resolution of a protracted child custody dispute being prosecuted against my wife by her former husband, if I were to decide not to cooperate with the House Judiciary Committee investigation.
"(13) Videnieks also outlined specific punishments that I could expect to receive from the U.S. Department of Justice if I cooperate with the House Judiciary Committee's investigation.
"(14) One punishment that Videnieks outlined was the future inclusion of me and my father in a criminal prosecution of certain business associates of mine in Orange County, California, in connection with the operation of a savings and loan institution in Orange County. By way of underscoring his power to influence such decisions at the U.S. Department of Justice, Videnieks informed me of the indictment of these business associates prior to the time when that indictment was unsealed and made public.
"(15) Another punishment that Videnieks threatened against me if I cooperate with the House Judiciary Committee is prosecution by the U.S. Department of Justice for perjury. Videnieks warned me that credible witnesses would come forward to contradict any damaging claims that I made in testimony before the House Judiciary Committee, and that I would subsequently be prosecuted for perjury by the U.S. Department of Justice for my testimony before the House Judiciary Committee."
The affidavit, Case No. 8500070, entered into court records, resulted in Riconosciuto's arrest within days.
On March 21, 1991 Micheal Riconosciuto filed an affidavit with the House Judiciary Committee that was investigating the Inslaw case Vs the United States government. Eight days later he was behind bars for the manufacture of methamphetamine. This arrest followed a pattern typical during the Iran Contra era. When a individual within the power structure during the Iran Contra Scandal decided to come forward and speak the truth, they are almost immediately arrested and charged for crimes that they had been performing for government officials. When these individuals then asked for documents pertaining to their activities during the discovery phase of the trail, Judges almost always ruled against the introduction of such evidence due to the potential revelation of “State Secrets”. Riconosciuto never denied that he was involved in drug manufacturing, but knew he was simply working on a government approved special project that had been sanctioned by corrupt government officials. Justice denied, and the truth forgotten.
On August 3, 1991 Danny Casolaro had contacted Lester K. Coleman, a former employee of both Defense Intelligence Agency (DIA) and the Drug Enforcement Agency (DEA) to discuss the “Promis” software as it related to the Octopus. In October 1991, Coleman provided an affidavit to concerning the arrest of Michael Riconoscuito.
"Affidavit of Lester K. Coleman, being duly sworn, do hereby state as follows:
"(1) I am currently self-employed as a freelance writer, editor, and security consultant. I am a United States citizen and am temporarily outside of the United States.
"(2) In November 1984, the Defense Intelligence Agency (DIA) offered me a position in human intelligence operations in the Middle East. I was raised in the Middle East, where I lived in Iran, Libya and Saudi Arabia. I speak three dialects of Arabic and some Farsi. I accepted the position and received training from the DIA. I was assigned to a Middle East intelligence unit.
"(3) Between February and September 1987, I was seconded by DIA to the Drug Enforcement Administration (DEA) in Nicosia, Cyprus, reporting to the DEA Country Attache, Michael T. Hurley.
"(4) After a cover assignment in the United States, I was again seconded to the DEA in Nicosia, Cyprus, in early 1988.
"(5) During April and May 1988, I worked in the office of Euramae Trading Company, Ltd. in Nicosia, Cyprus, a DEA proprietary company. On or about May 29, 1988, because of my concern about poor security in the DEA operation in Cyprus, I returned to the United States, having previously obtained the concurrence of DIA.
"(6) During my two stints as a DIA covert intelligence officer seconded to the DEA in Nicosia, Cyprus, I became aware of the fact that DEA was using its proprietary company, Euramae Trading Company, Ltd. to sell computer software called PROMISE or PROMIS to the drug abuse control agencies of various countries in the Middle East, including Cyprus, Pakistan, Syria, Kuwait and Turkey.
"(7) I personally witnessed the unpacking at the Nicosia, Cyprus, Police Force Narcotics Squad of boxes containing reels of computer tapes and computer hardware. The boxes bore the name and red logo of a Canadian corporation with the words `PROMISE' or `PROMIS' and `Ltd' in the company name.
"(8) The DEA objective in inducing the implementation of this computerized PROMIS[E] system in the drug abuse control agencies of the Middle East countries was to augment the drug control resources available to the United States Government by making it possible for the United States Government to access sensitive drug control law enforcement and intelligence files of these Middle East governments.
"(9) It is also my understanding that third party funds were generally made available for the purchase of these computer software and hardware systems. One third-party funding source was the United Nations Fund for Drug Abuse Control in Vienna, Austria.
"(10) As DEA Country Attache for Cyprus, Michael T. Hurley had overall responsibility for both the Euramae Trading Company, Ltd. and its initiative to sell PROMIS[E] computer systems to Middle East countries for drug abuse control.
On August 5, 1991 Danny had called Bob Bickel, a Texas Oil engineer who had previous been an informant for the custom department. Casolaro stated he was "getting close to the source, and he would soon go to Martinsburg and bring back the head of the Octopus."[xviii] Michael Riconosuito called both Danny and Hamilton of the 5th but was only able to reach Hamilton. Riconosuito was planning to trade information about Mike Abbell, Gilbert Rodriguez, and Bob Nichols in exchange for entry into the Witness Protection Program.[xix] Bickel would later confirm that Casolaro had spoken at length to him about these same three individuals Abbell, Rodriguez, and Bob Nichols, and that Danny had grilled Bob Nichols about what he had learned about the Octopus especially as it related to Abbell.
Casolaro had asked Bickel to help him investigate Mike Abbell, a former official of the Department of Justice. According to Carol Marshall, Hamilton and Casolaro had decided that Danny would lead an investigation into Abbell, but they would try to hide the real target so that no one would know the true focus on their work. Risconosuito spent the next 5 days trying to call Danny and warm him that investigating Abbell was extraordinarily dangerous.
In Danny’s search for the Octopus, Michael Risconosciuto’s testimony became his primary focus. Casolaro would take the information provided to him by Michael, and then question Bob Nichols about the details and the accuracy of the information. Nichols "went ballistic," according to Riconosciuto, when Danny bounced the Gilberto (Rodriguez) matter off him. Riconosciuto said he tried to warn Danny. "I called from that day on it was on a late Monday, Tuesday, Wednesday, all the way through the weekend when they found Danny [dead]," he said. "Every day I was calling the Hamilton’s, asking if anybody had heard from Danny. And I was frantic." [xx]
“Dr. John Nichols was the key to Danny’s Octopus” Michael Riconoscuito
Nichols began to warm Danny that Riconosuito’s testimony was fantasy and that he should abandon his relationship with him. A friend of Danny’s recounts a lunchtime meeting where he witnessed Dr. Nichols warning Danny to stay away from Michael.
Robert Booth Nichols had flown to Washington D.C. from Puerto Rico to warn Danny to stay away from Riconosciuto. "You don’t know how bad this guy Riconosciuto is ... he might not get you today, he might not get you next month. He might get you two years from now. If you say anything against him he will kill you." Nichols repeated the warning several times.
In September 1987, Special Agent Thomas Gates of the Los Angeles division of the Federal Bureau of Investigation had been assigned to investigate Dr. Nichols. Agent Gates concluded that Nichols was linked to the notorious Japanese organizer crime gang, Yakuza, the Gambino crime family, and Music Corporation of America (MCA) that had fallen under mob control. Danny showed his friend a wiretap summary complied by Gates. Danny had decided early on that Riconoscuito was a credible witness.[xxi] Casalaro had determined that Dr. John Nichols was the king pin responsible for laundering billions of dollars in drug profits for organized crime.
The wiretaps included conversations between high ranking La Cosa Nostra figures from the Gambino crime family, and the Japanese Yakuza. Eugene Giaquinto who was the President of MCA enjoyed a special relationship with John Gotti. The purpose of the FBI wiretaps was to determine "source, type and quantity of narcotics/controlled substances, methods and means of delivery, and the source of funding for purchasing of narcotics/controlled substances." The names included Robert Booth Nichols, Angelo Commito, Edward Sciandra, Michael Del Gaizo and Joseph Garofalo.[xxii]
One of the last people Danny interviewed before his death was Allan Boyak. When they met, Boyak provided Danny with a transcript of a meeting between Boyak, Riconosciuto, and Ted Gunderson. Boyak later became one of Michael Riconosuito attorneys after he was arrested.[xxiii] Boyak was interviewed by Jeffery Steinberg at the Executive Review, the research magazine of Lyndon LaRouche who has spend the better part of 3 decades investigating allegation of government involvement in the narcotics trade. According to Steinberg’s notes from his interview with Boyak, Boyak was a member of U.S. Army Special Forces in his early years, and did contract work for the CIA in the 1960’s and early 1970’s. He also worked for the DEA.[xxiv]
Boyak left the Drug Enforcement Agency after a dispute, and entered Law School where he met Jim Nichols who was Dr. Nichols brother. The family had disowned his brother due to his work with organized crime. Once out of law school Boyak became a defense attorney for high level West Coast drug traffickers. Steinberg’s notes continue: "In addition to his o.c. [organized crime] cliental, Boyak also maintained contacts and apparently did some legal work for some of his old buddies from his Green Beret and CIA days. One such pal was Art Suchesk, who ran a CIA proprietary company called Hoffman Electronics. " ... At some point in the late 1970's, one of Boyak's clients, a Mormon old boy named Cap Kressop, who was a technical wizard, was approached by Robert Nichols and asked to manufacture a prototype laser site for a rifle. Kressop was offered a $200,000 contract for the job but he became suspicious when Nichols wanted to pay him in cash. "Boyak contacted Nichols at his Marina Del Rey, California home/office [apartment "007"] and the two had a lengthy meeting there. Boyack's description of that meeting is that it was continuously interrupted by telephone calls and telex messages. Boyak came away convinced that Nichols was involved in large scale illegal drug operations. "After consulting with one of his close friends from Green Beret days, then an assistant U.S. Attorney named Dexter Leitenen (now the Miami U.S. Attorney), Boyak went to the Los Angeles FBI office with the suspicions about Nichols' activities. "The FBI background check [conducted by Ted Gunderson] on Robert Booth Nichols (born 1943 or 1944 he couldn't remember for sure) revealed that he was `squeaky clean.' In fact, he had a Class I machine gun license.
"Boyak did discover, however, that one of the people Nichols referenced as a business associate and personal friend, Harold Okimoto, was believed by some of his sources to be a top Japanese organized crime figure based in Hawaii. Okimoto was described as a top agent in the Yakuza overseas. "Over the next two year period, after the L.A. FBI had dropped any interest in the Nichols matter, Boyack's friend, [Arthur] Suchesk, repeatedly ran into Nichols in such places as Singapore, the Philippines, and Taiwan. Suchesk was based out of Zurich, Switzerland during this period, apparently still doing his front man work for the CIA.
"Boyak says that information developed during this period, through Suchesk and others, [indicated] that Nichols was indeed a big-time drug dealer who was very well insulated from any U.S. law enforcement problems. Nichols operated exclusively overseas. Whenever he came to the United States, he never engaged in any illegal activities. "However, Boyak described Nichols' rum importing business as a cover for big-time heroin trafficking from the Golden Triangle. Nichols was also named as `Mr. Big', according to Boyak, in the Medellin Cartel, in drug prosecutions in Utah and Los Angeles. "Three to four years ago, Boyak received an out of the blue telephone call from Michael Riconosciuto. Michael identified himself as a former employee of Robert Nichols. He also referenced Ted Gunderson as a `mutual friend.' Boyak had only met Ted once very briefly when he was pressing the L.A. FBI to look into the Nichols dope suspicions ..."
" ... Then in April 1991, Boyak received a phone call from Ted Gunderson, informing him that `Michael was in trouble. He was caught in a government frame-up.’ "Boyak returned to his background profile of Bob Nichols, parts of which were apparently provided by Bob's estranged brother, Jim Nichols. It seems that as a young man, Robert Nichols wound up in Hawaii functioning as a hit man for the Tongs. He was `adopted' as the Yakuza godson of Harold Okimoto, a 67 year old car dealer in Hawaii. "Nichols grew up to be a big business front man for the Far East syndicate. He reportedly laundered between $50-200 million for Ferdinand Marcos. He now owns an estate in Hawaii, a feudal castle outside of Milan, Italy and the referenced Marina Del Ray home in California. "Nichols has an office in Zurich. At one point, he was reportedly involved in the smuggling of China White heroin into Mexico where it was treated to look like the Mexican brown heroin which was more popular at the time.
"It should be emphasized that all of this information about Robert Nichols comes exclusively from Allan Boyak. None of it has yet been independently corroborated to my knowledge. Bill Hamilton and some other people involved in tracking the Inslaw story have all spoken to [Robert] Nichols and report that he has been straightforward with them and has provided leads and documents re: Michael Riconosciuto.
[ii] Pizo, Steve, “Harken Energy and Insider Trading”, Mother Jones, October 1992.
[iii] B. Weinberg, Ibid. p.58
[vi] Terry Reed and John Cummings , Compromised: Clinton, Bush and the CIA, S.P.I. Books, New York, New York, 1994. p9-10
[vii] Ibid. p. 213
[viii] Michael Ruppert, prepared for Senate Select Committee on Intelligence, November 15, 1996.
[ix] Reed, p 198.
[x] Ibid., p. 221.
[xi] Daniel Hopsicker, CIA Linked to Seal’s Assassination, George Bush’s Personal Phone Number Found in Seals’ Trunk, The Washington Weekly, Aug. 18, 1997
[xii] Ibid. p. 2
[xiii] Sally Denton and Roger Morris, “The Crimes of Mena”, Penthouse Magazine, February 1995.
[xv] Marshall, Carol, The Last Circle, Http://www.lycaeum.org/books/books/last_circle/6.htm, 8/24/2005. p. 1
[xvi] Ibid. Chapter p.
[xvii] DeRienzo, Paul, “Death of a Journalist Exposes a Secret Government”, November 1991.
[xix] Marshall, Chapter 17 .
[xxi] Chapter 10
[xxiv] Casalaro, Dan. "Memorandum for the File," dated 6/25/91