Operation Gladio

by Paul L. Williams

  Helliwell presented this idea to his boss General William “Wild Bill” Donovan. Donovan shared it with James Jesus Angleton, Allen Dulles (the OSS Swiss Director), and William “Little Bill” Stephenson, master spy of the British Security Coordination. Delighted with the concept, the officials arranged to funnel money to Helliwell, who now “became the man who controlled the pipe line of covert funds for secret operations throughout Asia.”3 The money for the opiates would eventually come from Nazi gold that had been laundered and manipulated by Dulles and Stephenson through the World Commerce Corporation, a financial firm established by Wild Bill.4 But that was still in the future.

  By the close of World War II, Helliwell and a number of fellow Army intelligence officers—E. Howard Hunt, of Watergate fame; Lucien Conein, a former member of the French Foreign Legion with strong ties to the Corsican Mafia; Tommy “the Cork” Corcoran, a lawyer serving the Strategic Service Unit; and Lt. General Claire L. Chennault, the military advisor to Chiang Kai-Shek and the founder of the Flying Tigers—had created the Civil Air Transport (CAT) from surplus aircraft, including C-47 Dakotas and C-46 Commandos.5 The CAT fleet transported weapons to a contingency force of the KMT in Burma. The planes were then loaded with drugs for their return trip to China.6 The pilots who flew these bush-type aircraft were a motley group of men, often serving as agents or go-betweens with the Chinese National guerrillas and the opium buyers. Some were former Nazis, others part of the band of expatriates that emerges in countries following any war.7 Helliwell and his compatriots had created a model for trafficking in drugs that would result in the formation of Air America—the CIA fleet of planes that transported opiates and cocaine during and after the Vietnam Conflict. Thanks to their efforts, Burma's Shan Plateau would grow from a relatively minor poppy-cultivating area into the largest opium producing region of the world.8

  GHETTO GOLD

  Wild Bill had drafted plans to create a postwar central intelligence agency and, knowing this, Helliwell came up with another brainstorm—a surefire means of gaining covert funding for Gladio and other security operations.9 The new agency, he realized, could obtain cold cash by adopting the same measures as General Chaing. It could supply heroin to the black community in America's ghettos.

  World War II had disrupted international shipping and imposed tight waterfront security that made smuggling heroin into the United States almost impossible. Heroin supplies were small and international crime syndicates had fallen into disarray. But opiates were becoming the rage of the jazz scene in Harlem, and the demand for heroin was increasing day by day among black musicians in New York, where a hit could cost as much as one hundred dollars. Helliwell, dealing with the drug lords of Burma, was keenly aware of this fact.

  The notion wasn't out of line with OSS protocol. Helliwell and his Army intelligence buddies in China were already involved with providing shipments of opium to General Chaing, and with giving “three sticky brown bars” to Burmese addicts who could offer information about the military plans of Chairman Mao.10 If similar bars could be made available to inner-city dealers at rock bottom rates, then the market could be cornered and the demand made to increase in an exponential manner. Helliwell knew that a drug epidemic might arise. But, he reasoned, the problem would remain confined to the lowest strata of society, with little impact on white middle-class America.

  Helliwell, the son of a prominent English cloth buyer, was a member of the inner circle of the OSS (which became known as the Oh So Social club), along with other wealthy American dignitaries, including Henry Sturgis Morgan (son of J. P. Morgan Jr.), Nicholas Roosevelt, Paul Mellon (son of Andrew Mellon), David K. E. Bruce (Andrew Mellon's son-in-law), and members of the Vanderbilt, Carnegie, DuPont, and Ryan families. Angleton, as noted, was a Yale graduate and the son of Hugh Angleton, a multimillionaire who owned the Italian franchise of the National Cash Register Company. Dulles was a Princeton graduate and the senior partner at the Wall Street firm of Sullivan and Cromwell, which represented the Rockefeller empire and other mammoth trusts, corporations, and cartels. He was also a board member of the J. Henry Schroeder Bank, with offices in Wall Street, London, Zurich, and Hamburg, and a principal of the Bank of New York. Wild Bill Donovan was an Ivy League lawyer and had married Ruth Ramsey, the heiress of one of the richest families in America.11 Donovan justified the practice of recruiting the socially elite for the OSS by saying, “You can hire a second-story man and make him a better second-story man. But if you hire a lawyer or an investment banker or a professor, you have something else besides.”12 And so, when Helliwell, who was not a second-story man, communicated his idea to the OSS brass, he was assured of a captive audience.

  Donovan, Angleton, and Dulles viewed Helliwell's proposal as answered prayer. Selling smack to the black jazz subculture would provide US intelligence with a steady supply of revenue for Gladio throughout the postwar era. The Truman Administration had set aside no funds for covert, postwar operations in the federal budget. And cold cash, Donovan knew, would become the key weapon of the new agency he remained hell-bent on establishing as soon as he got back to Washington. It alone could provide the means to purchase the services of foreign agents, foreign politicians, and foreign assassins without the approval of any elected official.13

  Donovan's reasoning, bizarre as it might seem to modern readers, was shared by most American political leaders—Republican and Democratic alike—at the close of World War II. Alfred W. McCoy explains:

  Henry Luce, founder of the Time-Life empire, argued that America was the rightful heir to Great Britain's international primacy and heralded the postwar era as ‘The American Century.’ To justify their ‘entanglement in foreign adventures,’ American cold warriors embraced a militantly anti-Communist ideology. In their minds, the entire world was locked in a Manichaean struggle between ‘godless communism’ and ‘the free world.’ The Soviet Union was determined to conquer the world, and its leader, Joseph Stalin, was the new Hitler. European labor movements and Asian nationalist struggles were pawns of ‘international Communism,’ and as such had to be subverted or destroyed. There could be no compromise with this monolithic evil: negotiations were ‘appeasement’ and neutralism was ‘immoral.’ In this desperate struggle to save ‘Western civilization,’ any ally was welcome and any means was justified.14

  Since any ally was welcome and any means justifiable, Wild Bill decided the implementation of Helliwell's drug scheme would enable him to make use of Charles “Lucky” Luciano and the Sicilian Mafia.

  THE COMMISSION

  Charles “Lucky” Luciano, born in Sicily as Salvatore Lucania, emerged as America's leading Mafioso by creating “the Commission” with Meyer Lansky, his long-time friend and accomplice, in 1931. The Commission eventually governed organized criminal activity within the United States by establishing territorial boundaries, settling internal disputes, and ruling on in-house killings. Twelve Mafia bosses sat on the board of directors, with Luciano as the head.15

  During Prohibition, Luciano and Lansky gained control of the New York docks and longshoremen's union by means of muscle and blood in order to supply speakeasies within Manhattan with scotch from Scotland, rum from the Caribbean, and whiskey from Canada. When a bloody war broke out between the families of Giuseppe “The Boss” Masseria and Salvatore Maranzano from 1927 to 1929, Luciano put an end to it by arranging the elimination of both Mafia chiefs and laying down the law to survivors. “I explained to ’em that all the war horseshit was out,” he later explained. “I told ’em we was in a business that hadda keep movin’ without explosions every two minutes; knockin’ guys off just became they came from a different part of Sicily; that kind of crap was givin’ us a bad name, and we couldn't operate until it stopped.”16

  HEROIN AND HOOKERS

  At the end of prohibition, Lucky imported heroin from the Chinese warlords in Shanghai and Tientsin that had then been refined in laboratories controlled by the Corsican Mafia. The product that reached the mean streets and opium dens of
Boston, New York, Philadelphia, Los Angeles, and San Francisco was less than 3 percent pure, since it was heavily cut with sugar or quinine.17 What's more, a surprising amount of the product did not include any heroin at all.

  Heroin represented a minute part of the Commission's business. Before World War II, America had less than twenty thousand heroin addicts and less than one thousand kilos were produced annually throughout the world.18 Use of the drug in America remained largely confined to Asian immigrants and black musicians, and most made men—the term for fully initiated members of the Mafia—“shunned drug peddling” as an “immoral” and “unmanly activity.”19 “My tradition,” Mafioso Joe Bonanno wrote in his memoirs, “outlaws narcotics. Men of Honor don't deal in narcotics.” Lucky was the exception to this code of honor. He established the heroin trade with Turkish and Chinese opium merchants, saving a considerable amount of the “good stuff” for the women who worked his brothels. The drugs served to strengthen their dependence upon his largesse and good will. Indeed, the combination of organized prostitution and drug addiction became one of Lucky's trademarks. By 1936, he controlled two hundred New York City brothels, employing twelve hundred prostitutes. These establishments provided him with an estimated annual income of $10 million.20

  LUCKY'S LOCKUP

  On February 2, 1936, US Attorney Thomas E. Dewey launched a raid of brothels in Manhattan and Brooklyn, which netted arrests of ten pimps and one hundred prostitutes. Unable to come up with the cash for the stiff bonds of $10,000 imposed by the presiding judge, several of the prostitutes bartered with Dewey for their release by fingering Luciano as their ring leader. On June 7, Lucky was convicted on sixty-two counts of compulsory prostitution and sentenced to thirty to fifty years of hard time at the Clinton Correctional Facility in Upstate New York.21

  Even within a prison so harsh it was known as “Little Siberia,” Lucky managed to bribe prison officials with enough cash to gain not only a private cell on the best block, but also a personal valet to press his dress slacks and silk shirts and an experienced chef to prepare his meals. The warden also permitted him to receive a steady stream of visitors, including Vito Genovese, his under-boss, and Meyer Lansky, his long-time partner in crime.22

  THE NORMANDIE SCAM

  In June 1942, Frank Costello, Albert Anastasia, and Tony Anastasio, three of Luciano's closest criminal cronies, came up with a plan to get their pal out of prison. Knowing that the Department of the Navy was paranoid about security at the New York waterfront and the possibility that Nazi U-boats might sink American ships remaining in the harbor, they decided to stage an incident that would require Lucky's release from Little Siberia. As Luciano later told his biographers:

  Costello got in touch with me right away. Albert had worked this idea out with his brother, Tough Tony. Albert said that the guys from Navy Intelligence had been all over the docks talkin’ to ’em about security; they was scared to death that all the stuff along the Hudson, the docks and boats and the rest, was in very great danger. It took a guy like Albert to figure out somethin’ really crazy; his idea was to give the Navy a real big hunk of sabotage, somethin’ so big that it would scare the shit out of the whole fuckin’ Navy.23

  The SS Normandie, a French luxury liner, had been converted into a transport ship for the Allied forces. When it was set ablaze at Pier 88 in the New York harbor, the incident was blamed on Nazi spies. The Office of Naval Intelligence (ONI) sought the help of waterfront union officials, including Joe “Socks” Lanza and Tony Anastasio, to prevent further “sabotage.” Lanza and Anastasio informed the officers that adequate security could only be guaranteed by Luciano, who had ruled the waterfront for many years with an iron hand. “Everybody in New York was laughing at the way those naive Navy agents were going around the docks. They went up to the men working in the area and talked out of the corner of their mouths like they had seen in the movies, asking about spies,” Meyer Lansky recalled.24

  Lt. Commander Charles Radcliffe Haffenden of the ONI paid a visit to the Clinton Correctional Facility, where he offered Lucky the promise of pardon and deportation to his native Sicily in exchange for his help in securing the harbor and preventing strikes by the Manhattan longshoremen.25 “As far as Haffenden was concerned, he didn't know nothin’ that was goin’ on except that he was sittin’ there with his mouth open, prayin’ I would say yes and help his whole department.” Luciano later said.26 Thus Operation Underworld got underway, with Lucky transforming from a mob thug to an agent of the ONI.

  MONSIGNOR MONTINI'S INFLUENCE

  On April 15, 1943, the OSS was charged with implementing plans for the Allied invasion of Sicily. The Joint Staff Planners for the US Joint Chiefs of Staff had drafted a report titled Special Military Plan for Psychological Warfare in Sicily that recommended the “Establishment of contact and communications with the leaders of separatist nuclei, disaffected workers, and clandestine radical groups, e.g., the Mafia, and giving them every possible aid.”27

  The report was approved by the Joint Chiefs of Staff in Washington and the order to make the Mafia connection was dispatched to Donovan. Earl Brennan, the OSS director in Italy, reached out to Monsignor Giovanni Montini, the Vatican Undersecretary of State who would become Pope Paul VI, for help in locating opponents to the fascist regime in Sicily. Montini suggested that Brennan reach out to Calogero “Don Calo” Vizzini, the capo di tutti capi—“boss of all bosses”—of the Vizzini/Agostino crime family, who had been imprisoned by Mussolini for his support of the Christian Democrats and his opposition to fascism. Brennan conveyed this information to Donovan, who knew that no one involved in the OSS or ONI had closer ties to the Vizzini clan than Lucky Luciano. Luciano had been born less than fifteen miles from Villalba, where his Mafiosi relatives still worked for Don Calo.28

  THE RETURN OF THE MAFIA

  At Donovan's request, Commander Haffenden again appeared at Lucky's cell with a request for help. Luciano complied by drafting a communiqué that was then airdropped near Don Calo's farmhouse.29 Two days later, American tanks rolled into Villalba after driving fifty-five miles from the beachhead of General Patton's Seventh Army in Palermo. Don Calo and his men climbed into the tanks and spent the next six days guiding the division through western Sicily and organizing support among the local populace for the advancing US troops.30

  Thanks to the success of Operation Husky (the code name for the Allied invasion of Sicily), Don Calo was appointed Mayor of Villalba.31 As soon as he assumed public office, Don Calo murdered the local police chief, whom he found “too inquisitive.”32 Other Mafiosi, at the insistence of the OSS, assumed positions of political power. Giuseppe Genco Russo, Don Calo's second in command, became Mayor of Mussomeli, while other members of the Vizzini/Agostino crime family became chief governing officials of other towns and villages in western Sicily.33 The appointments were understandable. Donovan wanted antifascists in charge, and the Mafiosi were most certainly antifascists, since many had spent the war years in Mussolini's jails.34 Michele Pantaleone, who observed the Mafia revival in his native village of Villalba, writes:

  By the beginning of the Second World War, the Mafia was restricted to a few isolated and scattered groups and could have been completely wiped out if the social problems of the island had been dealt with…the Allied occupation and the subsequent slow restoration of democracy reinstated the Mafia with its full powers, put it once more on the way to becoming a political force, and returned to the Onorata Società, the weapons which Fascism had snatched from it.35

  The return of the Men of Respect became a nightmare for ordinary Sicilians. Shifting from rural to urban crime, the Mafia bosses led by Don Calo graduated from the stiletto to the Beretta and the tommy gun. From 1944 to 1960, the bosses commissioned an average of three murders a week. Scarcely a shred of their fabled knightly code of honor remained by the end of Don Calo's reign of terror.36

  ENTER VITO GENOVESE

  The ascendancy of the Mafia also became apparent with the appointment of Vito Genove
se, Luciano's right hand man, as chief translator for the U S Army headquarters in Naples. New York's former lieutenant-governor Charles Poletti, whom Lucky described as “one of our good friends,” was also appointed as military governor in Italy.37 Thanks to Poletti, Genovese's men controlled the major Italian ports, and thereby most of the black market in American and Sicilian goods such as flour, oil, sugar, beans, salt, and cigarettes. Even Genovese's lowest picciotto, the youngest and most inexperienced men, made a bundle. “How did I accumulate my fortune? I did the black market during and after the war,” Luciano Leggio, a henchman for Genovese later explained to a jury in Palermo.38

  Thanks to the success of the invasion, Lucky Luciano became the subject of massive media hype, which culminated in radio broadcaster Walter Winchell proclaiming that the mobster should receive the Congressional Medal of Honor.39

  MAKING THE FIX

  With the Mafia in control of the Italian ports, the time was ripe for the implementation of Helliwell's plan for the funding of the postwar intelligence agency—a plan which relied on Luciano's network of narcotics distribution within the mean streets of inner-city America. Secretary of the Navy James V. Forrestal, OSS officials Allen Dulles and Murray Gurfein, and Lt. Commander Haffenden applied pressure on New York Governor Thomas E. Dewey—who as a prosecutor had brought Lucky to justice—to commute Luciano's prison sentence and deport him to Italy.40 Dewey complied even though the move was unprecedented; Luciano was a US citizen and not subject to deportation. But few expressed outrage when America's number one criminal was placed aboard the Laura Kleene, a seventy-ton freighter, for safe passage to Naples.41 Three years after the ship's departure, Forrestal, who kept a detailed record of his dealings concerning Luciano, was thrown out the window of the sixteenth floor of the Bethesda Naval Hospital, where he had been a patient.42