DECLASSIFIED: COVERT CRIME

DECLASSIFIED TRANSCRIPT: “Covert Crime”

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GENE WHEATON: When Harry Truman signed the National Security Act creating the CIA, he specifically stated in that act that they could not have any police powers, and they could not operate domestically in the United States, because he feared a secret police coup. By creeping in a little at a time, that coup has taken place.

NARRATOR: You are listening to “Declassified”, an ongoing interview and documentary series dealing with America’s national security establishment. In this episode, “Declassified” discusses covert operations and covert crime with former military criminal investigator, Gene Wheaton.

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At the end of World War II, the United States government reorganized its military bureaucracy, restructuring the armed forces under the newly created Department of Defense. It also
created an entirely new federal bureaucracy - a collection of agencies that has come to be informally known as the intelligence community. This new bureaucracy was initially centered around the CIA, or Central Intelligence Agency -- an offshoot of the World War II Office of Special Services -- which coordinated intelligence gathering and clandestine operations. With the growth of the Cold War, the intelligence community grew to include numerous other agencies, including the National Security Agency, or NSA, tasked with electronic eavesdropping, and the National Reconnaissance Office, which operates America’s satellite reconnaissance network.

The intelligence establishment took on two distinct functions during and after the Cold War. The first was intelligence gathering, which had existed under the auspices of various federal offices for many years previous. The second, and more controversial function, was participation in covert operations, which included propaganda, paramilitary operations, and assassinations. These covert functions were widely employed during the Cold War, and their use continues today.

The intelligence establishment was designed to operate under a veil of official secrecy, in order to make its functions opaque to foreign espionage. A body of secrecy laws and protocols grew up around these agencies, shielding them from foreign spies, but also from scrutiny by much of the American public. Congressional oversight of the intelligence establishment is limited to a select few committee members, intelligence budget information is restricted and classified, and even the existence of entire agencies, such as the NSA, has been hidden from the public at various time in the past.

Critics of the intelligence community have long contended that the institutional secrecy these agencies operate under allows them too much latitude, and too little oversight. This secrecy, they contend, has led to violations of the Constitution, and to violations of the law. The Pike and Church Committee hearings of the 1970s revealed broad-based abuses of the intelligence community, including CIA surveillance of legal American political groups, and CIA sponsored mind-control experiments performed on unwilling subjects. The Iran-Contra hearings of the 1980s uncovered a massive operation that involved illegally selling weapons to avowed enemies of the United States, and the arming of paramilitary militias in violation of laws passed by Congress.

Congressional oversight of the intelligence community was increased after the Pike and Church hearings of the 1970s, but in the wake of the September 11th terrorist attacks, many of the restrictions placed on America’s intelligence agencies are being lifted. Civil libertarians and intelligence agency critics have been quick to warn that an increase of secret police powers in the United States will do little to defend the country against terrorism, but will do much to erode traditional constitutional protections.

One such critic is Gene Wheaton, a former military criminal investigator and security contractor, who has worked as a counter-terrorism consultant for Rockwell Corporation, the Saudi Royal Family, and the Shah of Iran. Gene Wheaton was also recruited into the early stages of the Iran-Contra enterprise, and he is best known for his role in exposing elements of the Iran-Contra affair during the mid-eighties.

In this episode of “Declassified”, Gene Wheaton shares his reflections on the Iran-Contra affair, and his critique of how elements of the intelligence community have come to undermine American democracy. Gene Wheaton:  

WHEATON: I've served in the Marine Corps, the Air Force, and the Army, primarily as a criminal investigator and counter-intelligence agent. After Marine service I went back to my hometown of Tulsa, Oklahoma and was a police officer there for a couple of years, and then came back into the service as an OSI agent in the Air Force, and served about nine years in the Air Force that way. And then during the build-up for the Vietnam war, by the time I got enough university credits to get a commission, I was too old for it, so the army offered me an inter-service transfer if I would transfer from the Air Force to the Army as a CID agent, Criminal Investigation Division. So I switched from the Air Force to the Army and served at Fort Ord California, and in Vietnam. In ’71, my family and I were transferred to Iran where I was the narcotics and counter-terrorism advisor to the Shah of Iran, and was on the embassy staff as the ambassadors’ back-door liaison with the Iranian police intelligence agency. I came back from Iran in ’73, was stationed in Chicago till ’75, retired from the army and went back to Iran as a civilian working on contract doing generally the same stuff - counter-terrorism and security on major projects. My last assignment was in Iran ... for two years I was the executive assistant to one of the vice presidents of the Rockwell Corporation, and director of security for a program over there called the IBEX program; it was an airborne electronic intelligence program plus, uh, mountaintop border sites to monitor the airwaves of the neighbors ... I was brought on board after the assassination of three Rockwell managers on the program. It was a billion-dollar program, and if any more of their people died, they were going to cancel the whole program. Rockwell was fronting for the CIA on this program with the Iranian government.

I have worked on and off on projects with CIA people because of being a military investigator. I consider myself a policeman, not an intelligence agent. But in the 70s ... when I was advisor ... I was in civilian clothes . . . I wore civilian clothes for 20 years even though I was a military man, and I carried federal agent’s credentials. But in Iran, when I was the narcotics and counter-terrorism advisor to governments over there, I got very close with people in the CIA. I was a Farsi linguist, and I had Iranian security clearances and American security clearances and I just ran with that crowd, and they just sort of adopted me into their subculture. And that’s how I became an insider with these people was because of all of that.

When I went back to Iran in ‘75 after I retired from the army, I went back with a, I guess you could say, an electronic handshake: some people in the agency in Washington told people over there I was coming and that I was one of the good guys and an insider, and had these clearances, and they set me up for a point of contact in the embassy if I ever needed their help, and on the outside if they ever needed mine. Mutual back scratching type thing. I’ve never in my life worked for the agency per se; the closest thing was working for Rockwell as a contractor, and I had a CIA security clearance at that time.

My really broad-based knowledge of the covert operations peaked out when I was really brought into the inner circle of these covert operators in the mid 80s. I had been in different compartments of the same batch of people, where even their own people -- a lot of them didn’t know the big picture -- but I was considered a fair-haired boy with Middle East background and aviation background, and different cells in the intelligence community needed me for different things, and I was so close to a bunch of these people, that I was gradually, I was almost considered one of them. They treated me just like I was a CIA covert operator.

While running back and forth to Saudi Arabia and Pakistan and Egypt in the ‘80s, early, mid 80s ... I kept my contacts with the embassies around the world and with the State Department, and with the Agency, so that I could get quicker access into countries whenever I got a project that I could work on. In 1985 I became the vice-president of a cargo airline called National Air. It was during that period, summer of ’85, that some of my old CIA contacts -- who were no longer full-time employees of the agency -- but when they retire these guys they usually give them a contract as an outside contractor on the side, and then they have deniability for working for the agency. They can say, “No, he’s not an employee of the agency,” but in fact they are contractors and they still carry security clearances and have to be polygraphed once in a while. I was recruited into Ollie North’s network by that group during the summer of ’85 because they wanted my airplanes for missions to the Contras, and they wanted my Middle East background for helping devise a plan for movement of weapons to the Mujahadin in Afghanistan. I had traveled across Afghanistan before, and again, I speak the language, and had been in and out of in Afghanistan and Pakistan more so than anybody they could find within the agency.

The guys that I had known for several years, uh, primarily Carl Jenkins, who was a long-time career CIA paramilitary mercenary operator, uh, probably the most highly respected of those people in that division of the agency ... he was the commander of the biggest CIA base in Laos while Shackley was over there, and while Bill Sullivan was over as ambassador. Carl and I became very close friends in the early 80s, to the point where I would keep a bedroom in his home in Washington with clothes and papers and things so I didn’t have to carry them from California. I was commuting regularly back and forth when I was going overseas, and Carl and his wife, who was an active super-grader in the agency -- he was her case officer and she had been his interpreter, and then he got her a master’s degree and then she got her Ph.D. She went on to head one of the branches of the agency -- we became like brothers and sisters, between me and them.

So I was back in Washington trying to drum up business for this little cargo airline, and Carl agreed to be my Washington representative, uh, for marketing purposes to open doors for me in Washington, D.C. ... to see if I could get some cargo contracts. It was in that vein that Carl told me it was time ... that the guys in the national security council wanted to bring me into the inner circle. And that’s where I sort of got at the very national level of this. I had previously attended some black-tie functions with Bill Casey and the veterans of the OSS; had been invited to a party where the guest of honor was Vice President Bush. My wife and I were invited. We were running with a fairly high-level crowd. In December of, uh, ’85 was the scheduled time for me to actually meet with Ollie North, so they had a black-tie dinner at the Palm Restaurant in Washington D. C. on the 4th of December. It was the day that Bud McFarland resigned as national security advisor.

At that black tie party at the Palm Restaurant on the 4th of December in 1985, I was specifically invited by Neil Livingston and to come in and meet Ollie North, and it was a party to promote Neil Livingston’s book, called “Fighting Back”, and the subtitle was “The War on Terrorism”. He and a State Department/CIA spook by the name of Terry Arnold wrote that book together and this was the coming-out party for the book, and all the covert operations community, the real snake eaters, were going to be there with black ties. Ollie North was there and Bud McFarland and I don’t know, 75 or 100 people in black ties, having drinks and dinner and hobnobbing and they felt like ... the atmosphere at that party was one of ‘We are the shadow government running the United States.’ It was almost like a diplomatic party or a State Department coming out party for a regime. These guys were in charge, and that was how they presented it.

There was a plan that was approved later on by the Congress in August, no, excuse me, October of 1985 -- Congress was going to vote in 27 million dollars in non-lethal aid for the Contras and it was going to be a legitimate but covert, uh, program to supply the Contras with everything from medicines to tents and uniforms and food and whatever else they might need that was non-lethal, but as it turned out, that program became a lethal one too, because they would ship what they would laughingly refer to as hard rice, meaning weaponry, in with the $27 million worth of stuff.

Carl took me to the, what they called the Humanitarian Aid Office for the State Department in Roslyn, Virginia, and I met with Chris Arcos who was the deputy for that program to a guy, an Ambassador Dumeling. We were trying to get some of the 27 million dollars of cargo to haul to Honduras for the Contras that Congress had approved, and we were told several times in no uncertain terms that the only way we could do it was to work through Dick Secord and that aviation supply route, and I refused to do that because I knew that Secord had an unsavory reputation; he been forced into retirement out of the Air Force as a major general in ’83 over the Ed Wilson scandal in Libya. So I was advising the people around Ollie North, the liaison people between me and him, that they were dealing with a bunch of unsavory characters that had a reputation, an official public reputation, of causing extreme embarrassment to the government. At that time I didn’t ... I thought the contractors -- Secord and that group -- I thought they had a legitimate covert contract with the government, but they were also diverting aircraft and hauling illegal cargo on the side, and I was receiving direct information about their movement.

Well, in May of ’86, I personally briefed CIA director Bill Casey, and of course he looked startled. I had no idea at the time that he was one of the masterminds behind all this illegal stuff, but he said he’d look into it and get back to me. And he said he had to leave the country the next day, and would be back in touch with me in two or three weeks. It was exactly the same weekend, or the week, I think the 30th of May, when I met with him, or the 31st, when Ollie North was on that secret trip with Bud McFarland to Tehran. So I suppose Casey was going over to Israel to brief them about it. I didn’t know that at the time. Casey sent a message to me after he got back saying that the agency wasn’t involved in any of this stuff, and that the government wasn’t involved in this illegal diversion, and “If you think you can do anything about it, let the chips fall where they may,” as a bluff. I’m just a raggedy little old Oklahoma country boy, retired chief warrant officer, and I guess he figured I couldn’t do it.

Anyway, as result of those briefings in the summer of ‘86, and I was kind of – this struck me as being treason and grand larceny on a major scale, stealing from the taxpayers’ money, -- and having been a cop all my life, I thought it was kind of wrong. So I got with a couple of Washington D.C. journalists that I knew. And one of them was a two-time Pulitzer prize winning journalist by the name of Newt Royce. And Newt Royce and Mike Icoca, who was a free-lancer who was writing with him – Newt at that time was with the Hearst newspaper chain in Washington D. C., with their bureau. I had information -- direct knowledge from the Saudi royal family -- that kickbacks were being, from the Saudi AWACS program, were being used to help fund the Contras, to buy weapons from different countries around the world. And I furnished Newt with the names of other people that could back up what I was saying, and that this was a scam because Secord, who was on active duty after the Iranian revolution, was the chief architect of the Saudi AWACS program. The Saudi AWACS program was identical to our Iran IBEX program that we had to close down in Iran. They just moved it across the Persian Gulf to Saudi Arabia and renamed it. It was an 8 billion dollar program, and those guys were talking about 10 % or 15%, so you’re talking about an 800 million dollars minimum, estimate, that that these guys could get whenever they wanted it, out of the bag.

And Newt and Mike Icoca wrote it up on the wire service for Hearst newspaper chain, and it went out on the wires and was made a front page headline of the San Francisco Examiner on the 27th of July of 1986. As a result of that article in August of ‘86, Congressman Dante Facell wrote a letter to then secretary of defense Casper Weinberger asking him if it was true that foreign money, kickback money on programs, was being used to fund foreign covert operations. And in September of ‘86 Cap Weinberger wrote a letter back to Facell denying that it was being done by the U.S. government, with any knowledge of it being kickback money. That eventually, one of George Bush’s last acts -- and Larry Walsh, the special prosecutor, indicted Weinberger as a result of that correspondence -- and Bush pardoned him as one of his last acts. And that’s how this whole mess got started.

The covert operations subculture and the pyramid system of it is difficult for the average citizen to understand. And I understand it because I saw it, but it’s awfully hard to describe. This stuff goes back to the scandals of the 70s ... of Watergate and Richard Helms, the CIA director, being convicted by Congress of lying to Congress, of Ted Shackley and Tom Clines and Dick Secord and a group of them being forced into retirement as a result of the scandal over Edmond P. Wilson’s training of Libyan terrorists in conjunction with these guys, and moving C-4 explosives to Libya. They decided way back when, ‘75-’76, during the Pike and Church Committee hearings, that the Congress was their enemy. They felt that the government had betrayed them and that they were the real heroes in this country and that the government became their enemy. In the late 70s, in fact, after Gerry Ford lost the election in ’76 to Jimmy Carter, and then these guys became exposed by Stansfield Turner and crowd for whatever reason ... there were different factions involved in all this stuff, and power plays ... Ted Shackley and Vernon Walters and Frank Carlucci and Ving West and a group of these guys used to have park-bench meetings in the late 70s in McClean, Virginia so nobody could overhear they conversations. They basically said, “With our expertise at placing dictators in power,” I’m almost quoting verbatim one of their comments, “why don’t we treat the United States like the world’s biggest banana republic and take it over?” And the first thing they had to do was to get their man in the White House, and that was George Bush.

Reagan never really was the president. He was the front man. They selected a guy that had charisma, who was popular, and just a good old boy, but they got George Bush in there to actually run the White House. They’d let Ronald Reagan and Nancy out of the closet and let them make a speech and run them up the flagpole and salute them and put them back in the closet while these spooks ran the White House. They made sure that George Bush was the chairman of each of the critical committees involving these covert operations things. One of them was the Vice President’s Task Force On Combating Terrorism. They got Bush in as the head of the vice president’s task force on narcotics, the South Florida Task Force, so that they could place people in DEA and in the Pentagon and in customs to run interference for them in these large-scale international narcotics and movement of narcotics money cases. They got Bush in as the chairman of the committee to deregulate the Savings and Loans in ’83 so they could deregulate the Savings and Loans, so that they would be so loosely structured that they could steal 400, 500 billion dollars of what amounted to the taxpayers’ money out of these Savings and Loans and then bail them out. They got hit twice: they stole the money out of the Savings and Loans, and then they sold the Savings and Loans right back to the same guys, and then the Federal Deposit Insurance Corporation -- the taxpayers money -- paid for bailing out the Savings and Loans that they stole the money from ... and they ran the whole operation, and Bush was the de facto president even before the ‘88 election when he became president.

See, when Harry Truman signed the National Security Act creating the CIA, he specifically stated in that act that they could not have any police powers. And they could not operate domestically in the United States, because he feared a secret police coup. By creeping in a little at a time, that coup has taken place.

This crowd really believes that the unwashed masses are ignorant, that we are people who are not capable of governing ourselves, that we need this elitist group to control the country, and the world -- these guys have expanded. They look at the United States not as a country, not in any kind of patriotic mode now, but they look on it as a state within a world that they control. And that’s this attitude that they have. They’re not unlike any other megalomaniac in the world. They’re nutty as fruitcake, but they’ve got distinguished gray hair, three-piece dark suits and they carry briefcases, and they’ll stand up and make speeches just as articulate as anybody in the world, but they don’t socialize and function outside their own little clique. My experience with them is that they could be certified as criminally insane and put away in a rubber room and have the key thrown away. That’s how dangerous they are. But they’re powerful, and they’re educated. And that makes them twice as dangerous. And that’s basically what’s running the world right now.

If I had not been part of this, and hadn’t seen it first hand, I would not believe a word I’m saying. You couldn’t convince me that something like this -- and the American people will not believe it. Because you can’t get the average citizen . . . I’ve talked to judges and lawyers who have invited me in to talk to them. Some of them really patriotic concerned people. It turns them off, because it changes their entire life experience, and the reason that they have existed, and the things they have believed in all their life if you tell them this.

I have sat on the banks of the Potomac in restaurants with 75 and 80-year-old retired CIA people and retired generals, West Point graduates, honorable people ... these old men have sat with tears in their eyes and told me that, “Gene, what you’re into, you understand it more than we did, and it’s absolutely true, but it’s just so big you can’t do anything about it.” I guess if I believed that, I’d go off to some South Sea island and drink a few Cuba Libres laying in the sand or something, but somebody has to keep charging in there, you know. The biggest chink in their armor – and it would take somebody smarter than me to figure out how to exploit it -- is their insecurity. They are afraid of a peasant with a pitchfork. And the reason they react so strongly and violently against anybody who opposes them, is because they’re afraid someone will grab a thread and unravel it, and their whole uniform will come unraveled ...

The only way I can think of to get this thing exposed, would be to coordinate with all of the different independent small newspapers and radio stations in the United States -- and television networks -- and get them to start blasting this thing -- and some universities -- because the major media’s not going to do anything about it.  

NARRATOR: You have been listening to “Declassified”, an ongoing interview and documentary series dealing with America’s national security establishment. Copies and transcripts of this program are available at http://www.declassifiedradio.com. That’s http://www.declassifiedradio.com. Please refer to “Covert Crime” when ordering this episode.

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