The contra connection may go back as far as 1979 | by Jerry Meldon | The Boston Sunday Globe, November 30, 1986

 

The discovery of arms sales to Iran via Israel constitutes just the latest law-bending financial pipeline to Nicaragua’s contras. It may not be the last – or the most disturbing.

            Long before the revelation of aid to the contras without congressional knowledge, a network of former intelligence officers:

·         Began extralegal operations in 1979 in support of deposed Nicaraguan dictator Anastasio Somoza, before Ronald Reagan was elected.

·         The group included rogue CIA agent Edwin Wilson, before his arrest and conviction for arming and training Libyan terrorists.

·         It financed its activities by trafficking in narcotics.

This information was made available this week by the Washington-based lawyer, Daniel Sheehan. Sheehan represents correspondents for National Public Radio and Canadian Broadcasting in a $24 million racketeering and damages suit filed earlier this year against a 30-man ring based in Miami. It was during his pre-trial investigation that Sheehan shed light on the illicit operations of the contra supply network.

Named in the suit are ex-CIA officials Theodore Shackley (former No. 2 man in the dirty tricks division until his resignation in 1979) and Thomas Clines and Maj. Gen. John Singlaub (ret.) – all members of the contra supply network recruited by Lt. Col. Oliver North; and Adolfo Calero, head of the largest contra force.

The two journalists, injured in a suspicious bombing in Costa Rica, accuse Shackley and company of financing the contras with cocaine and hiring a Libyan national to murder the US ambassador to Costa Rica and make it appear to be the work of the Sandinistas. The assassination plan fizzled.

The suit is pending, and Sheehan has tracked down witnesses to the network’s shadowy activities – particularly those of CIA agents Shackley, Clines and Wilson, and Maj. Gen. Richard Secord.

Sheehan has traced the network’s arming of the Nicaraguan counterrevolutionaries to as early as 1979. Congress had just passed the Harken Amendment, banning US military assistance to Nicaraguan dictator Somoza, who was about to be deposed by the Sandinistas.

According to Sheehan’s sources, Shackley and company then began funneling aid to Somoza via Israel and Egyptian American Transport Services, Inc., or EATSCO – a shipping company Wilson and Clines had set up to cash in on delivery of $4 billion worth of armaments that Egypt would receive in accordance with the Camp David peace accords. The Air Force international programs office – then managed by Richard Secord – ultimately awarded EATSCO a $71 million contract to ship materiel to Egypt.

Between August 1979, when Somoza fled Nicaragua, and January 1981, when Ronald Reagan took over the White House, the network reportedly outfitted the remnants of Somoza’s secret police, the core of the contras based in Honduras. By mid-1981, the Reagan doctrine was off and running, and the CIA officially assumed control. The agency would remain in charge of the contras until 1984, when the Boland Amendment would again ban CIA and military involvement.

By this time, Secord had resigned from the Air Force – where he had become deputy assistant secretary of defense – in the wake of Edwin Wilson’s arrest for illegal arms deals and allegations of a government witness (later sued by Secord successfully) that Secord had profited from them. Shackley and Clines had resigned from the CIA earlier, while the Justice Department was still assembling its case against Wilson.

This did not stop Lt. Col. North of the National Security Council from turning to Secord and, through him, according to Sheehan, to Shackley and Clines – to again circumvent a congressional ban on funding the contras in 1984.

Through the Geneva-based Credit Fiduciaire Service – the same bank in which the millions from the Iranian arms deals were later deposited – and its subsidiary, CFS Investments Ltd. of the Cayman Islands, Shackley, Clines and Secord reportedly reopened their pipeline to the contras.      

 

 

 

Donovan case airs some old GOP ties: Labor secretary’s trial raises link to Teamsters | by Jerry Meldon | Published in The Boston Sunday Globe, August 31, 1986

 

Earlier this year, President Reagan pointed with pride to major gangland trials held in Boston, New York and Kansas City spotlighting the Justice Department’s spirited drive on organized crime. The president did not mention that he had cut the budgets of crime-fighting agencies as soon as he took office, or that the cases against the mob were conceived during the Carter administration.

In fact, several figures close to and within the Reagan administration have been scandalized by past relationships with racketeers. Sen. Paul Laxalt (R-Nevada), Reagan’s close friend, adviser and the manager of his presidential campaigns, has been defending himself lately against allegations of a dubious relationship with the Las Vegas underworld. The president’s best friend in organized labor, Teamsters Union president Jackie Presser, was recently indicted for embezzling $700,000 in union funds to pay no-show workers. And on Tuesday, former Labor Secretary Raymond Donovan will go on trial in New York on larceny and fraud charges.          

The Bronx district attorney will charge that Schiavone Construction Co. – of which Donovan was vice president, in collusion with a mob-connected trucking firm, defrauded New York City of $7.4 million in a subway tunnel construction project. Witnesses, including a confessed murderer, will testify on the Mafia’s grip on the construction industry, a 1979 Super Bowl junket to Miami during which Donovan allegedly met with organized crime figures, and the role of a black New York state senator in qualifying the trucking firm for federal funds earmarked for minority-run businesses.

Witnesses also testify to the FBI’s suppression of incriminating evidence during Donovan’s 1981 Senate confirmation hearings.

 GOP ties to Teamsters

 Last January, the Presidential Commission on Organized Crime deemed the Reagan administration “either unwilling or unable” to combat labor racketeering that has gained the mob “monopoly power” in several industries, construction among them. The union blemished most by “control or influence by organized crime” was the only major union to endorse Reagan in 1980 and 1984, the International Brotherhood of Teamsters.

While corruption of Teamster officials is legendary, far less appreciated is the relationship between the Teamsters and the Republican Party. In 1971, Richard Nixon pardoned Jimmy Hoffa, the former Teamster president convicted of mail fraud and jury tampering. Four years later, Hoffa disappeared without a trace. Gerald Ford, who was appointed vice president by Nixon and replaced him when he resigned, not only absolved Nixon of Watergate-related guilt, but pardoned Dave Beck, a Teamster president convicted of income-tax evasion. Ford’s labor secretary went before the Teamster convention one year later in 1976 to declare an alliance between the union and the Republican Party.

The alliance flourished as Ronald Reagan campaigned and later received a remarkable 40 percent of the labor vote in each of his presidential elections. As chronicled by Dan Moldea, author of “The Hoffa Wars”:            

·         On the campaign trail in 1980, candidate Reagan met with both Roy Williams and Jackie Presser, then Teamster vice presidents, the day after Williams took the Fifth Amendment 23 times before a Senate probe of his underworld ties.

·         Following the election, the president appointed Presser “senior economic adviser” to his transition team. New Jersey police had already identified Presser as the mob’s contact for loans from Teamster pension funds.

·         That spring of 1981, a Senate sub-committee described Williams as “as an organized crime mole operating at senior levels of the Teamsters Union.” The next day, he was indicted for the attempted bribery of Nevada Sen. Howard Cannon. Three weeks later, Reagan invited Williams to a White House conference on the economy. Williams is currently serving a 10-year sentence for bribery and conspiracy.

Reagan’s first labor secretary, Raymond Donovan, kept the administration on good terms with the Teamsters. According to the Presidential Crime Commission, Labor Department officials accused Donovan of blocking their investigations. Chairman Orrin Hatch of the Senate Labor Committee subpoenaed Donovan to procure Teamster pension fund documents. Later, citing a sharp decline in the prosecution of union officials after Donovan took office, Hatch charged the Labor Department with following “a policy of inaction and ineptitude that increases the vulnerability of the labor rank and file to abuses by unscrupulous officials.”

      The president’s choice as secretary of labor had been his top campaign fundraiser in the state of New Jersey. At a single dinner at which insurance man William McCann was co-host, Donovan raised $175,000. McCann was later named ambassador to Ireland, but was replaced when it was revealed that his firm swindled the union of its pension funds.

      Donovan joined the Schiavone Construction Co. in 1959. He would become a multimillionaire – in the words of veteran labor reporter A. H. Raskin – “in a see-no-evil, hear-no-evil, speak-no-evil industry … in which the partnership of unions and bosses has often led into the sewers of collusion and graft.”

Wiretaps lead to indictment

       Donovan’s conduct in that environment caught up with him when federal prosecutors, frustrated with Justice Department roadblocks, turned over to a Democratic district attorney wiretaps that had remained sealed during Donovan’s confirmation hearings. In October 1984, Donovan was indicted on charges that the Schiavone Construction Co., of which he was vice president, and a sub-contractor, the Jo-Pel Contracting & Trucking Co., defrauded the New York City Transit Authority of $7.4 million in federally subsidized subway tunnel projects in 1977-79.

      Federal regulations required that 10 percent of such business be contracted to minority-run enterprises. To circumvent this rule, according to the district attorney, the Schiavone company conspired in 1977 with William Masselli, owner of a Bronx meat-supply company, convicted robber and member of the Genovese crime family.

      With the aid of a $200,000 advance check co-signed by Donovan, Masselli had formed the Jo-Pel Co. Masselli’s partner, New York state Sen. Joseph Galiber, was black. Since Galiber reportedly owned a 51 percent interest, Jo-Pel qualified as a minority-run enterprise. However, Masselli can be heard on an FBI wire-tap claiming Galiber “didn’t put a penny into it.”

      Further evidence is to be presented at the New York trial that, through phony accounting, Jo-Pel kicked back to Schiavon some two-thirds of the $12 million it received for the subway project.

      In summer 1982, Leon Silverman, a special prosecutor appointed by President Reagan, was reexamining Donovan’s alleged organized crime connections. Evidence of fraud uncovered in the Masselli tapes was kept from Silverman, who for a second time chose not to prosecute Donovan.

      It was not the first time the Justice Department withheld evidence bearing on Donovan’s case. During Donovan’s 1981 Senate confirmation hearings, FBI assistant director Francis Mullen testified there were no references to Donovan on organized crime wiretaps in New Jersey. Later, after he was promoted to director of the Drug Enforcement Administration, Mullen admitted withholding information. There were several references to Donovan on wiretaps in New York.

      During pretrial hearings last summer, a 20-year FBI veteran testified he had been ordered to destroy notes of an interview in which an informer told him he could connect Donovan to racketeers. The same agent charged in a 1981 report to FBI director William Webster, that “after three years of dedicated effort by innumerable street agents … high-impact political corruption cases” were dropped in favor of relatively minor cases.

             Gangland-style murders

             In 1982, the FBI finally sent the Senate Labor Committee the results of an exhaustive search of its files for material on the labor secretary. According to a Fortune magazine investigation by Roy Rowan, the findings included a reliable informant’s allegation that Donovan had a longstanding relationship with one Salvatore “Sally Bugs” Briguglio.

            Briguglio was the business agent of Teamster Local 560. He reportedly had access to inside information on construction company bids on New Jersey projects. He allegedly sold the data to Ray Donovan, whose firm then underbid. As payment, Schiavone provided material worth $50,000 to renovate the home of Local 560’s president, Anthony “Tony Pro” Provenzano.

            Provenzano had earlier been convicted of extortion. He is currently serving a 20-year sentence for ordering the murder of the previous president of Local 560. Briguglio, a co-defendant in the same case and prime suspect in the disappearance of former Teamster president Jimmy Hoffa, was shot to death while awaiting trial.

            Donovan has denied under oath that he knew Briguglio. He was backed up by Briguglio’s associate, Fred Furino, under questioning by the special prosecutor. However, when Silverman subjected Furino to a lie detector test in April 1982, he failed. Two months later, his body was found stuffed in a car.

            Shortly after the Furino murder, the special prosecutor reopened his investigation into Donovan’s alleged payoffs and criminal ties. William Masselli was flown to New York from a Florida prison cell. Before he could be interrogated, his son, Nat, was shot to death in the Bronx.

            Nat Masselli had assumed control of the Jo-Pel Contracting & Trucking Co. following his father’s hijacking and narcotics conviction. At the time of his death, he was reportedly an undercover informant for the special prosecutor.

            Donovan has scoffed at any connection between his case and the homicides. He calls one informant a “damnable liar,” another, “murdering slime.”

 

 

 

Kohl off the mark on Waldheim | by Jerry Meldon | Published in The Boston Sunday Globe, May 11, 1986

 On the eve of the election last Sunday that gave former United Nations Secretary General Kurt Waldheim the inside track on the Austrian presidency, West German chancellor Helmut Kohl chastised critics of Waldheim’s wartime service as a German Army intelligence officer for their “arrogance.” Undaunted by reports – originating with the World Jewish Congress – that link Waldheim’s unit to the deportation of Greek Jews to concentration camps, Kohl said, “I sense an arrogance of the late-born, which I find hard to bear.”

What is arrogant is the head of the German government pronouncing judgment on this issue. However, it does not come as a surprise: Kohl is not known for his prudence.

In addition, he apparently gathered from his rendezvous with Ronald Reagan at the Bitburg war cemetery one year ago that “reconciliation” absolved his country of residual war guilt. Furthermore, there has been a recent upsurge in anti-Semitic remarks by West German politicians, and Kohl has done little to quell it. And perhaps most significantly, 10 months before nationwide elections, Kohl is in trouble, and, like his friend Kurt Waldheim, a cornered Kohl is not above appealing to national pride.

Kohl is under pressure, as prosecutors in two German cities decide whether he lied or suffered amnesia in testimony before two official inquiries into payoffs from private corporations. A total of $80 million was illegally funneled to German politicians between 1968 and 1980. The major donor to Kohl as an industrial giant whose founder, Friedrich Flick, helped finance Adolf Hitler’s rise to power; Flick was subsequently convicted at Nuremberg of war crimes, including the use of 48,000 slave laborers, 80 percent of whom were worked to death.

In November 1984, Chancellor Kohl admitted to a parliamentary commission that in the late ‘70s he had secretly accepted $53,000 from the Flick Group, a multibillion-dollar holding company. He claimed to have turned the money over to his party’s treasury. However, according to reports in the German press, Kohl actually received closer to $200,000 between 1974 and 1980, when he was a regional governor.

The timing of the payoffs is noteworthy. Two former finance ministers are now on trial, along with the former manager of the Flick Group, whose meticulously kept records of payoffs in the late ‘70s constitute the most incriminating evidence. The money, according to the magazine Der Spiegel, was in exchange for finance ministry approval of a $175 million tax waiver to Flick following its 1975 sale of an $800 million interest in Daimler-Benz, manufacturer of Mercedes cars, to Germany’s largest bank.

However, according to Der Spiegel, Flick’s payoffs to Helmut Kohl were more likely part of another deal.

The directors of the powerful conglomerate were upset in 1972 when Kohl’s conservative Christian Democratic Party lost its first postwar national election. Shortly thereafter, Kohl’s vanquished predecessor was made an offer he could not refuse. He resigned from the CDU chairmanship, joined a law firm, and, through a numbered bank account, received $700,000 from Flick over a seven-year period for legal services he never, apparently, rendered. The Flick brain trust, meanwhile, identified Helmut Kohl as most likely to succeed.

Among notes recorded in this period by Flick’s manager, and published recently in the German press, are entries such as: “I intend to fit out Herr Kohl exactly as we did the other gentlemen.”

The irony in this story involves the Flick manager, Eberhard van Brauchitsch. Throughout the 60s, Friedrich Flick, alone among leading Nazi-era industrialists, steadfastly refused to compensate surviving wartime slave laborers. The final “no” was uttered by von Brauchitsch, who is the son of Hitler’s one-time commander-in-chief and is now on trial in Bonn for lining the pockets of German politicians.

In January of this year, shortly after purchasing the Flick empire for a little under $2 billion, Germany’s largest bank agreed to pay surviving slave laborers a sum of $2 million. When the issue of survivor compensation resurfaced, a spokesman for the Christian Social Union, the CDU’s right-wing ally, told a Cologne newspaper he saw “neither a legal nor a moral basis for this demand by the Jews. The fact that it comes up now creates the impression that Jews are quick to show up whenever money tinkles in German cash registers.”

Although one might have hoped for an altogether different reaction from a head of state, Helmut Kohl characterized the 35-year-old spokesman as “a splendid young man” who had simply said something “foolish” and apologized. During parliamentary debate in March, Kohl went on to assert that it was absurd to even speak of renewed German anti-Semitism. According to the chancellor, “the overwhelming majority of our citizens, and particularly the young, are immune to anti-Semitism.”

It is not at all surprising, then, to read of Helmut Kohl’s being shocked by accusations against “his old personal friend” Kurt Waldheim and his denunciation of Waldheim’s critics as not only “arrogant,” but ignorant of conditions during the war. Unfortunately, Helmut Kohl is one of the all too many who prefer to re-write history, including their own.