Operation Gladio

by Paul L. Williams

  In 1945, the pope had held private audiences with Wild Bill Donovan to discuss the implementation of Gladio and had decorated him as a crusader against Communism with the Grand Cross of the Order of St. Sylvester, the oldest and most prestigious of papal knighthoods.15 Now, the Holy Father remained determined to do all in his worldly power to prevent the godless forces of Communism from taking control of Rome, the holy and eternal city—including the spilling of blood.

  CASH AND CANDY

  In the months before the 1948 national election, the CIA dumped $65 million of its black money into the Vatican Bank.16 Much of the cash was hand delivered in large suitcases by members of Luciano's syndicate, including clerics with affiliations to the Sicilian Mafia. The reception of this money by the Holy See was held in strictest confidentiality. One reason for the secrecy, as Cardinal Francis Spellman of New York later revealed, was that “subversive groups in the United States would grasp this as a very effective pretense for attacking the United States Government for having released money to the Vatican, even though indirectly conveyed.”17

  The heroin, which remained the source for the black money, continued to be supplied to the Sicilian mob by Schiaparelli, the Italian pharmaceutical giant. The drugs were received by a chain of businesses that had been set up in Palermo by Luciano and Don Calo. These businesses included a candy factory, which produced chocolates that were filled with neither cherries nor cream but nuggets of 100 percent pure smack. Another company was a fruit export enterprise, which was of integral importance, since the drugs continued to be shipped to Cuba in crates of oranges, half of which were made of wax and stuffed with pure heroin.18

  TRAFFICANTE AND THE TEAMSTERS

  In Cuba, Santo Trafficante and his family continued to cut the heroin with sugar before delivering it to distributors in New Orleans, Miami, and New York.19 The CIA established protected drug routes into these ports by developing close ties to the Mafia-tainted International Longshoremen's Association, which remained under the thumb of Rosario “Saro” Mogavero.20 The movement of the product throughout the country was facilitated by Jimmy Hoffa and other leaders of the International Brotherhood of Teamsters working with Mafia-owned trucking companies, including the Long Island Garment Trucking Company, which was run by John Ormento.21

  This activity was not lost on Harry Anslinger, head of the Bureau of Narcotics and Dangerous Drugs (BNDD), who noted the sharp rise in the supply of heroin in African American neighborhoods and the subsequent rise in addiction. Hearing from informants that the drugs were coming from Luciano, he sent Charles Siragusa and other BNDD agents to Sicily, where they were ordered to haunt the deported gangster's every move. It wasn't long before the agents caught Luciano with a half-ton of heroin being readied for shipment to Havana.22 Siragusa pressed for an arrest. But no action was taken by the Italian government or by the US State Department. Lucky's work in Sicily, the BNDD was informed, remained a matter of national security.23

  ITALIAN ELECTION TACTICS

  In the closing months of 1947, hundreds of the Mafia's made men began to arrive in Italy from New York, Chicago, and Miami to aid Luciano and Don Calo in addressing the Communist problem. The CIA's black money for mob muscle was paid out by the Vatican bank from ecclesiastical organizations, including Catholic Action.24 In this way, the Holy See forged an alliance with the Sicilian Mafia, an alliance that would strengthen throughout the next three decades.

  The force of the Mafia was now unleashed upon the Italian electorate. Don Calo and an army of thugs, including Vito Genovese's cousin Giovanni Genovese, burned down eleven Communist branch offices and made four assassination attempts on Communist leader Girolamo Li Causi. The gang, under Frank Coppola—who had been imported from Detroit by Angleton to work with Sicilian bandit Salvatore Giuliano—also opened fire on a crowd of workers celebrating May Day in Portella della Ginestra, killing eleven and wounding fifty-seven. The funds for the massacre were provided by Wild Bill Donovan through his World Commerce Corporation.25 One of Italy's leading labor organizers, Placido Rizzotto, was found dead at the bottom of a cliff—legs and arms chained and a bullet through his brain. Throughout 1948, in Sicily alone, the CIA-backed terror attacks resulted in the killing of on average five people a week.26

  THE VATICAN DEATH SQUAD

  In addition to these undertakings, Monsignor Don Giuseppe Bicchierai, acting upon papal authority, assembled a terror gang charged with the task of beating up Communist candidates, smashing left-wing political gatherings, and intimidating voters. The money, guns, and jeeps for the Monsignor's terror attacks were furnished by the CIA from surplus World War II stockpiles.27

  On Election Day, Don Calo and his men stuffed ballot boxes and bribed voters with gifts of freshly laundered drug money, while Pope Pius remained within his chambers “hunched-up, almost physically overcome by the weight of his present burden, the coming election.”28 The mob's tactics worked, and the Christian Democrats triumphantly returned to power. In his memoirs, William Colby, who would later become the director of the CIA , wrote that the Communists would have gained 60 percent of the vote without the Agency's sabotage.29

  OTHER CATHOLIC BANKS

  One year after the election, renewed fears of a Communist takeover of Italy arose from Stalin's creation of the Comecon (Council for Mutual Economic Assistance), the economic union of the Soviet Union, Bulgaria, Czechoslovakia, Hungary, Poland, and Romania to enforce the Soviet dominion of the lesser states of central Europe.30 In the face of this development, the CIA opted to extend support for the CDP in Italy and stay-behind units throughout Western Europe with billions in covert funding that could only come from the expansion of the drug trade. The CIA funds were deposited by members of Don Calo's crime family in Catholic banks throughout Italy, including Banco Ambrosiano. These banks, thanks to the Lateran Treaty (which established Vatican City as a sovereign state), were safe from scrutiny by the Bank of Italy and Italy's treasury department. A henchman for Giuseppe Genco Russo, Don Calo's immediate successor as capo, now observed, “He [Russo] is constantly in contact with priests, priests go to his place, and he goes to the bank—which is always run by priests—the bank director is a priest, the bank has always been the priests’ affair.”31

  THE VATICAN DESK

  In 1949, Pope Pius XII issued a solemn decree which excommunicated not only the members of Holy Mother Church who joined or favored the Communist party, but also all Catholics who read, published, or disseminated any printed material that upheld Communist ideology.32 In an internal memo, the CIA provided the following analysis of the pope's action:

  By this action, the two most powerful organizations for moving men to act on behalf of a doctrine are brought into open and basic conflict. The possible long-range ramifications of this conflict cannot be easily or comprehensively defined. The decree will be a very powerful factor in the East-West struggle. In Eastern Europe, it implies a struggle to the bitter end…. In many other areas of the world, the decree will exert a powerful and prolonged indirect pressure on both policy and action. Communist governments and Communists generally will have to accept the issue as now posed. Although the Communist governments would obviously have preferred to carry on their anti-church campaign at their own pace, the power of decision has now been taken from them. The conflict can be pressed on them with a speed and comprehensiveness that may well affect the satisfactory development of other Communist policies….33

  Fearful that the decree might be insufficient to crush the “forces of godlessness,” Pius XII continued to tighten his ties with the CIA into a Gordian knot that no one could unravel. The CDP continued to receive more than $20 million in annual aid from the CIA and, in return, the CIA established a “Vatican desk” under Angleton.34

  The Vatican desk reviewed all of the intelligence reports that were sent to the Holy See from papal nuncios (diplomats) who were stationed behind the Iron Curtain. During the early years of the Cold War, this became one of the only means for the Agency to penetrate the Ea
stern Bloc.35 Strategies between the CIA and the Church were drafted to undermine left-wing movements throughout Europe and South America. The affairs of politically suspect members of the Curia were monitored by moles. The actions of progressive priests, particularly in Latin America, were thwarted by strong arm techniques.36

  THE KNIGHTS OF MALTA

  Angleton swore his allegiance to Holy Mother Church and became a knight of the Sovereign Military Order of Malta (SMOM), the legendary ecclesiastical society dating back to the Crusades. Other spooks were also knighted, including William Casey, William Colby, and John McCone, who were all future CIA directors; General Vernon Walters, who would become the deputy director of the CIA under George H. W. Bush; Albert Carone (mentioned in the previous chapter); CIA special agent William F. Buckley, who would become the owner and publisher of National Review; Frank Shakespeare, the director of CIA media outlets Radio Free Europe and Radio Liberty; NATO general and future secretary of state Alexander Haig; and Wild Bill Donovan.37 An SMOM knight of particular interest was General Reinhard Gehlen, who had served as Hitler's intelligence chief for the eastern front during World War II. In 1945, Gehlen had been asked by the OSS to set up stay-behind units made up of fellow Nazis to spy on the Soviet Union. The units, known as the Gehlen Organization, eventually transformed into the Bundesnachrichtendienst or BND under Chancellor Konrad Adenauer in 1956.38

  Much of the business between the CIA and the Vatican began to be conducted at the annual gatherings of the SMOM in Rome and New York. Cardinal Francis Spellman presided over the proceedings and sanctioned future strategies against the Communist forces in Europe in the name of the pope.39 Since the Vatican played such an essential part in Gladio, William Colby, the CIA station chief in Rome, had microphones planted throughout the papal apartments so the Agency could monitor the pope's conversations and those of his staff. This snooping would persist until 1984.40

  The Vatican now became a principal depository not only for black funds but also top secret documents, including CIA files relating to the development of nuclear weapons. One of these documents, never declassified, surfaced in 2006 during the process of discovery in Alperin v. Vatican Bank, a class action suit by Holocaust survivors who claimed the IOR was the repository of gold that had been stolen from them by the Nazi Croatian government.41

  THE STUMBLING BLOCK

  The Helliwell plan had been implemented. The Mafia connection had been made. The alliance with the Vatican had been forged. But there was a problem. Schiaparelli could no longer meet the Agency's increased demand for heroin. The pharmaceutical giant was extended to the limit by providing annual shipments of two hundred kilos to the makeshift laboratories of Luciano and Don Calo.42 The Sicilian syndicate and the CIA would have to establish their own drug route in order to meet the current needs and also to develop new markets throughout Europe and the United States. The Sicilians would also have to secure proper facilities and trained scientists to refine the raw product. The heroin that came from the Schiaparelli laboratories was 100% pure and only requiring cutting and packaging. Sources for opium had to be found; the raw product had to be refined into purified No. four heroin; and new markets in the United States had to be developed. Otherwise, the cold war could be lost.

  It [the CIA's involvement in the trafficking of heroin] goes all the way back to the predecessor organization OSS and its involvement with the Italian mafia, the Cosa Nostra in Sicily and Southern Italy. Later on when they were fighting communists in France and—that they got in tight with the Corsican brotherhood. The Corsican brotherhood, of course, were big dope dealers. As things changed in the world the CIA got involved with the Kuomintang types in Burma who were drug runners because they were resisting the drift towards communism there. The same thing happened in Southeast Asia, later in Latin America. Some of the very people who are the best sources of information, who are capable of accomplishing things and the like happen to be the criminal element.

  Victor Marchetti, The CIA and the Cult of Intelligence

  The process of producing heroin begins when the petals fall from the poppies, exposing egg-shaped seed pods. The pods are sliced vertically to extract the opaque, milky sap that is opium in its crudest form. After it darkens and thickens, the extracted sap is compacted into bricks of opium gum and transported to laboratories, where it is mixed with lime in huge vats of boiling water. The waste precipitate sinks to the bottom, while the white morphine rises to the top. The morphine is skimmed from the water, reheated with ammonia, filtered, and boiled again until it becomes reduced to a brown paste. The paste is poured into molds and dried in the sun. The finished product is reheated in vats and processed with acetic anhydride in glass containers for six hours to form diacetylmorphine. The solution is drained and sodium carbonate is added to make the heroin solidify and sink. The heroin becomes further refined by filtering it from the sodium carbonate solution through activated charcoal and purifying it with alcohol. The product is then reheated to evaporate the alcohol.

  Next comes the tricky part—the part that the Sicilians in their makeshift facilities were unable to master. The heroin is mixed with ether or hydrochloric acid, a process that can produce a violent explosion if not conducted with scientific precision. The end product is No. 4 heroin—a fluffy white powder usually shipped in one hundred kilo packages.

  CORSICAN CHEMISTRY

  Unlike the Sicilian branch of the Mafia, the Corsican Mafia had gained mastery of this process through years of working among Cambodian, Laotian, and Vietnamese technicians in French Indochina. In 1949, the CIA and the Luciano syndicate sorely needed the talents of the Corsicans for the creation of a new narcotics network. But the labor unions in Marseilles, where the heroin laboratories were located, remained controlled by Communists, who refused to load and unload ships coming from French Indochina, where the rebel army of the Democratic Republic of Vietnam (a force that would morph into the Viet Cong) was fighting for independence from the French Union. Ho Chi Minh, the leader of the rebels, had helped found the French Communist Party and was a popular hero in France among leftist workers, especially in Marseilles with its high number of Indochinese residents.1

  On February 3, 1947, the Communist-Socialist labor coalition (Confederation Generale du Travail) convened a meeting of the Marseilles dock workers that resulted in the publication of a manifesto demanding all unions launch “the most effective means possible against the war in Vietnam”—a strike. The plans to transform the French port city of Marseilles into the center of the heroin industry came to a screeching halt.2

  THE STRIKE BREAKERS

  To break the strike, Lucky Luciano made contact with Antoine and Barthelemy Guerini, the leaders of the Corsican Mafia, who initiated a series of attacks against the strikers and labor leaders. The attacks, funded by the CIA, continued until 1950, when the Guerinis finally gained complete control of the waterfront. CIA operative Thomas Braden later recalled how he had dealt with the Marseilles situation:

  On the desk in front of me as I write these lines is a creased and faded yellow paper. It bears the inscription in pencil: ‘Received from Warren G. Haskins, $15,000 (signed) Norris A Grambo.’

  I went in search of this paper on the day the newspapers disclosed the ‘scandal’ of the Central Intelligence Agency's connections with American students and labor leaders. It was a wistful search, and when it ended, I found myself feeling sad.

  For I was Warren G. Haskins. Norris A. Grambo was Irving Brown of the American Federation of Labor. The $15,000 was from the vaults of the CIA, and the yellow paper is the last momento I possess of a vast and secret operation….

  It was my idea to give $15,000 to Irving Brown. He needed it to pay off his strong-arm squads in the Mediterranean ports, so that American supplies could be unloaded against the opposition of Communist dock workers.3

  Thanks to the CIA's assistance, Marseilles now became the new center of the heroin industry. By 1951, only months after the Corsican and Sicilian Mafias took control of the
waterfront, the Guerinis recruited a host of French chemists and opened their first opium refineries.4 The French connection to the Sicilian clan of Don Calo and the American crime family of Lucky Luciano had been established.

  THE TURKISH ROUTE

  Production was one problem; supply was another. The new heroin network needed the services of a narcotics broker. The leading opium broker within the Anatolian plains of Turkey was Sami El-Khoury, a slick Syrian opium merchant, who had become the leading supplier of opium paste to the Middle East. Lucky Luciano met with El-Khoury as soon as the strike was settled and forged a business relationship that would immediately beginning flowing millions of kilos of raw opium from Turkey into Beirut, where it was manufactured into morphine base. El-Khoury secured the route by paying off Lebanese police and customs agents with Luciano's cash. From Lebanon, the base was transported to the new laboratories in Marseilles. From the French port, the heroin was shipped on freighters to Cuba under CIA protection.5

  Throughout his career, El-Khoury remained under the care and protection of the CIA. He was collared several times during major drug busts—some involving more than six hundred pounds of heroin—but served less than four months in prison.6 In 1998, Dennis Dayle, former chief of an elite DEA unit, confided that El-Khoury had been an employee of the Agency. “In my 30-year career in the Drug Enforcement Administration and related agencies,” Dayle said, “the major targets of my investigations almost invariably turned out to be working for the CIA.”7

  THE SOUTHEAST ASIAN ROUTE

  As the opium began to flow from Turkey, the CIA worked with General Chaing Kai-shek and his Kuomintang (KMT) army to create a supplemental drug route that would lead from Burma to Marseilles. By 1950, thousands of General Chaing's troops had been driven into the Shan States of Burma by the Communist forces of Mao Zedong.8 The troops were mostly members of a Muslim minority, known as the Haw, who were born and bred in southwestern Yunnan, an area dominated by the opium trade.9 With the hope that the reconstituted KMT, now known as the Ninety-Third Division, still might mount an invasion of China to aid in the Korean conflict by creating a new front, the CIA provided for all the immediate needs of the exiled army. It was an expensive undertaking that could only be offset by cultivation of poppy fields within the mountainous regions of northern Burma and northeastern Laos.