The Strength of the Wolf

by Douglas Valentine

  “THE CONSPIRACY”

  Hank Manfredi’s obsession with the intelligence angle of drug smuggling ultimately led him to “the Conspiracy” Harry Anslinger had been seeking all his life. Manfredi began to assemble the evidence in late June 1957, when the Carabinieri informed him of Luciano’s presence in Palermo. Manfredi alerted his Italian police contacts and, in October 1957, a series of Mafia summit meetings at the Delle Palme Hotel were carefully monitored, and verified Anslinger’s theory that an International Grand Council of Mafiosi existed. Among the Americans at the summit were Joe Bonanno and Santo Sorge, the Mafia’s financial advisor. According to Marty Pera, Sorge desperately tried to convince the bosses to get out of the drug business.

  “Bonanno was polished,” Pera explains. “Lucchese and Lansky had sent their sons to West Point. They were rich and they didn’t need the hassle.”

  Representing the Sicilians, among others, were Vito Badalamenti and Leonard Greco, the most powerful Mafiosi in Sicily. Leonard’s brother Salvatore had a fleet of ships that sailed under the Honduran flag and, through Frank Coppola, moved narcotics to Cuba in food shipments. But the Sicilians were not as diversified as their American counterparts and could not afford to pull out of the drug trafficking business, despite Sorge’s admonitions.9

  “The Sicilians gave the Americans an ultimatum at Palermo,” Pera explains. “They knew there were a number of rebellious young hoods in America, so they told the bosses, ‘If you don’t deal with us, we’ll deal with them.’ Not having control over narcotics would have put all their other rackets at risk, so the Americans had no choice but to go along.”

  Once the ultimatum was accepted, arranging political protection became the main order of business. Coppola and Greco were the principal negotiators and they authorized Michele Sindona to move drug-generated protection money through the Italian Secret Service to ultra powerbrokers in the Italian government. This was the intelligence angle that fascinated Manfredi – though it was fascist, not communist in nature – which meant he was nearly powerless to stop it in Italy. However, he was able to track Palermo summit-attendee Philip Buccola to Boston, and by wiretapping Buccola in Boston, FBN agents were able to learn of a follow-up American Mafia summit to be held in Apalachin, New York, the overarching significance of which will be discussed in the next chapter.

  THE IRAN CONNECTION

  Another narcotics route with an intelligence angle was uncovered in Iran in 1956, when Charlie Siragusa and Paul Knight, working with Iranian police chief General Alavi Moghaddam, raided a lab in Tehran that was producing 100 pounds of heroin a week! It was a huge bust, but the operation persisted, so in February 1957, Knight escorted Garland Williams to Tehran to solve, at President Eisenhower’s personal request, Iran’s drug problem. With Williams was CIA officer Byron Engle, chief of the Agency for International Development’s Office of Public Safety (OPS) Program. Two years after his forced retirement from the Treasury Department, Williams had resurfaced as an employee of the OPS. His job was to create a narcotic squad in Tehran, at the same time that Engle and the CIA were forming, with the Mossad, Iran’s brutal secret police force, SAVAK.10

  The Williams expedition was nothing new. America had been enmeshed in Iran’s opium business since 1943, when the Third Millspaugh Mission arrived in Tehran to take control of Iran’s economy, in return for the granting of oil, air transport, and various other commercial rights to American industrialists. As part of its job, the Millspaugh Mission also collected opium revenues, managed the Pharmaceutical Institute, and directed the Royal opium factory, prompting critics to call the Millspaugh team “drug sellers.”11

  In his defense, team leader Arthur Millspaugh pointed out that the US Army, which provided Iranian narcotics to Kachin soldiers in Burma during the Second World War, operated beyond his control through its “wild-cat” Bank Sepah. “Our long term program looked to the eventual elimination of the opium business,” he wrote, but “a large part of Persia’s production went into the illicit trade” anyway.12

  As Garland Williams had reported to Anslinger in 1949, and as the Prince Pahlevi case had proven in 1954, the Iranian royal families never stopped overproducing or selling black-market opium. Perched perennially atop the UN’s list of nations that violated international drug laws, Iran was aware of its addiction problem, and in 1953, newly elected president Mohammed Mossadegh banned opium production. But he also nationalized American and British oil firms, so the British Secret Service called upon Kim Roosevelt and the CIA. Roosevelt in turn concocted a coup d’état with Lebanon’s security chief, Faroud Nashashibi, a CIA asset employed as Pan American airlines’ chief of security in Beirut.13

  After the successful completion of the bloody takeover, the American and British oil companies regained their properties in Iran, and Roosevelt became a vice president at Gulf Oil. The CIA moved in and from Iran launched penetration operations inside the Soviet Union. In so far as Iran, along with Turkey, was one of only four allied nations that bordered the USSR, supporting the Shah was a matter of national security that eclipsed local issues of drug law enforcement.

  Through the Office of Public Safety, CIA officers would also organize and support repressive security forces in Lebanon and South Vietnam, which were both protecting narcotics traffickers. In exchange for their silence, and the type of favors described by Ralph Frias, FBN agents in return received tips on politically incorrect drug smugglers from CIA officers working under OPS cover. And through OPS’s chief, CIA officer Byron Engle, the FBN would form a relationship with TWA like the one it enjoyed, through Sam Pryor, with Pan Am.14

  THE BEIRUT CONNECTION

  While national security interests were served by making allowances for foreign leaders involved in drug trafficking, these accommodations caused difficulties for overseas FBN agents. In Lebanon, as we know, the major hash growers were legislators and officials of cabinet rank, which is why Customs Captain Edmond Azizi and Sûreté officer Haj Touma were able to protect Sami Khoury and Mounir Alaouie, and profit from their drug smuggling operation. In addition, the Middle East faced an explosive political situation. After the Israelis seized the Suez Canal, the Sinai Desert, and the Gaza Strip in 1956, the US government – in order to maintain good relations with the oil producing Arab nations – agreed to provide Israel with billions of dollars of financial aid so that some of these stolen territories would be returned to their rightful owners. But the extent of Israel’s military power terrorized the Arab world and widened the gulf between the Christian and Muslim sects in Lebanon. As a result, arms smuggling proliferated between Beirut and Damascus, making drug law enforcement all the more difficult.

  Arriving in Beirut in 1956 to help Paul Knight manage the situation was Joe Salm. Born in Egypt and raised in America by Benedictine monks, Salm was the most improbable FBN agent imaginable. He met his father (who owned 3,000 acres of land at the mouth of the Nile) once a year, and he met his mother, a French poetess, for the first time in 1939, when at age eighteen he went to work for the Ford Motor Company in Cairo. During the war, Salm served with the Royal Air Force and then the US Army CID. He joined the CIA after graduating from Harvard, serving undercover in the State Department’s Refugee Program in Genoa. In 1954 he transferred to Beirut, where he processed visa applications for Palestinian and Armenian refugees wishing to emigrate to America.

  Birds of a feather, Joe Salm and Paul Knight became fast friends in Beirut. Relying on Frias to do most of the undercover work, Salm and group leader Knight made whatever cases were politically permissible, such as the June 1957 case against Youseff el-Etir and Syrian chemist Omar Makkouk. But their ability to operate in Beirut diminished in 1958 when Muslim nationalists and communists revealed that the CIA had rigged Lebanon’s presidential elections in favor of the Christian Maronite candidate, Camille Chamoun. In August, communists and outlawed Syrians bombed the American Embassy, and Ambassador Donald Heath ordered the evacuation of American women and children to Athens and Cyprus.

&nb
sp; Tensions increased when Egypt and Syria formed the United Arab Republic. In response, the CIA, with the consent of Iraq’s King Faisal, armed the Kurds in Northern Iraq and encouraged them to attack Syria, which the US considered a Soviet pawn. Within weeks, however, Iraqi forces loyal to Colonel Abdul Karim el-Kassem overthrew King Faisal and restored relations with the USSR. This coup incited Arab nationalists in Lebanon and, in May, armed revolt erupted in Beirut. The US Information Agency building was burned and sacked, and the ARAMCO pipeline from Saudi Arabia to Tripoli was severed – at which point Joe Salm was reassigned by the CIA as a consultant to Tapline, the company that provided security for ARAMCO.

  Fearing that the Syrians would attack Lebanon, and that Muslim rebels would assist them, President Chamoun asked for US help in sealing Lebanon’s borders. To protect the region’s oil reserves, Eisenhower agreed: the Sixth Fleet put Marines ashore at Tripoli, and US jets flew over Beirut in a show of force. But Chamoun’s government collapsed in October when the Marines left, and General Faroud Chehab, promising neutrality, was elected president. At America’s urging, Muslim leaders were granted seats in his new government.

  Events in Lebanon in 1958 left America more deeply entrenched in the region than ever before. To placate King Hussein, America began selling arms to Jordan and mounting covert operations against Iraq, including a MKULTRA operation in which Dr. Gottlieb sent, from New Delhi, India, a handkerchief laced with a deadly poison to Colonel Kassem.15 (Gottlieb’s assassination attempt failed, but Kassem was overthrown in 1963 by the CIA-supported Ba’ath Party, which included Saddam Hussein.16) Gottlieb’s assassination attempt evidently involved Anslinger through Ulius Amoss, the nutty private investigator fired from his OSS post in Cairo for using official funds to hire, with George White’s assistance, an ex-con for assassinations. In a 1958 letter to Anslinger, Amoss expressed concern about “our men” in Iraq being able “to evacuate in time.”17

  Were Paul Knight and Joe Salm “our” men? They certainly were in the midst of the fireworks. One illuminating episode began when Knight received a tip about a warehouse full of hashish. After arranging to rent space at the warehouse, Knight visited friends in the Royal Navy on Cyprus, from whom he acquired an incendiary bomb and a timer, which he sealed inside a bail of hash then stored in the warehouse – which exploded and burned the warehouse to the ground.

  By 1958, FBN agents were setting off bombs and making loud noises in numerous places of strategic interest to the CIA.

  12

  GANGBUSTERS

  “In those days, New York City was narcotic law enforcement.”

  Agent Arthur J. Fluhr

  The political dynamics of domestic drug law enforcement varied from city to city, but were governed by similar forces in each instance. In New York, for example, the Mafia had a monolithic organization presiding over an immense importation and distribution system that straddled the nation. In battling this behemoth, FBN agents worked closely with NYPD narcotic detectives – not just because they could kick in doors on suspicion, but also because they had a handful of fixers who maintained the balance of power between the underworld and the Establishment.

  But Los Angeles, like Miami, was an open city. The Mafia had a controlling interest in several rackets, and supplied a portion of the narcotics that reached LA, but Blacks and Hispanics were independently involved in the action too. There had been only one Mafia turf war, in the late 1940s, when Tom Dragna and Johnny Roselli, with the help of LA police chief William “Whiskey Bill” Parker, forcefully settled their differences with Bugsy Siegel and Mickey Cohen.1 After Siegel was killed and Cohen went to prison, Roselli shifted his attention to more profitable Mafia ventures in Las Vegas. According to Howard Chappell, Dragna’s successor in 1957, Frank DeSimone, was a weak boss, and the Mafia actually had a stronger presence in San Diego.

  There were demographic differences as well. While pure China white heroin arrived in the San Francisco Bay area from the Far East, Los Angeles was infused with marijuana and opium from Mexico. As the FBN agent in charge in LA, Howard Chappell’s jurisdiction covered the California and Arizona borders, and extended into Mexico’s northwestern states. But unlike the NYPD, the LAPD narcotic squad refused to help the FBN in its international effort, and was content to focus its efforts on the city’s disenfranchised Hispanic and Black communities.

  Chief Parker’s refusal to share informants or work with the FBN led to a bitter feud. “He turned the cops loose,” Chappell says, noting that Parker allowed his narcotic detectives to stretch search and seizure laws to the limit. “They’d find five or six joints and tear the place apart. But worse than that, they were intentionally screwing up our federal cases.”

  The District Attorney ignored the problem, and as a result the California courts dismissed several important cases. Out of frustration, a few disgruntled LAPD narcotic detectives brought their cases to Chappell, and Chappell, working with the Sheriff’s department, took the cases to federal court. Tensions intensified and at a press conference, Chief Parker charged that Chappell’s agents were illegally using prostitute addicts as informants. Chappell, through reporter George Putnam, in turn leaked information about several LAPD narcotic detectives who were taking money from drug dealers. He had photos of the detectives in $500 suits, placing extravagant bets at the racetrack, and he secretly taped incriminating conversations the detectives had with the District Attorney.

  Soon thereafter several FBN informants were murdered with a type of revolver used by the LAPD – at which point Chappell grabbed a Tommy gun and made a personal call on Whiskey Bill. Fearing for his life, Parker complained to the governor and demanded that the Treasury Department replace Chappell. Never one to avoid trouble or publicity, District Supervisor George White called a press conference in San Francisco and declared that Whiskey Bill was covering up for the bad cops on his narcotic squad and interfering in federal cases in Mexico.

  After several failed attempts at mediation by state and federal officials, the impasse ended when Harry Anslinger refused to transfer Chappell, and LA Mayor William Paulson forced Chief Parker to accept a shaky truce. It was a victory for Chappell, but there was a downside too, for by demonstrating his bureaucratic courage and leadership abilities, Chappell had frightened Anslinger’s heir apparent, Henry Giordano, at FBN headquarters. In addition, Los Angeles had begun to rival New York as the nation’s premier city – all of which meant that Chappell had become a contender in the race to succeed Anslinger and thus a threat to Giordano and his new ally, George Gaffney, who in January 1958 became New York’s district supervisor, the most important job in the Bureau.

  THE ASCENT OF GEORGE GAFFNEY

  Propelled by his successes as an investigator and his membership in the Jim Ryan clique in New York, Gaffney in 1956 was named district supervisor in Atlanta, with jurisdiction over Miami and the Caribbean. Although he was the youngest district supervisor in the FBN, Gaffney did well in Atlanta, and won the admiration of Mal Harney. A native of Minnesota, Harney, who had no children of his own, took a fatherly interest in Michigan-born Gaffney, with whom he felt a certain affinity. They shared the same conservative Republican politics, and Harney admired Gaffney’s toughness; he once remarked to him that “you must have some iron ore in your veins.” So when Jim Ryan retired from the FBN in 1957, due to serious injuries suffered in a car accident, Harney recommended Gaffney as Ryan’s replacement as district supervisor in New York. Also fond of Gaffney – he referred to him as “Gaffioni” in private correspondences – Anslinger agreed, and in doing so, ushered in the FBN’s most successful and controversial era.

  Howard Chappell describes high-strung, diminutive George Gaffney as “energetic, opportunistic, and not overly modest,” all of which is true. But giving the devil his due, Gaffney had reason to be proud. He was street-smart, a strong manager, and able to make complex conspiracy cases. As to being energetic, that’s a vast understatement: driven is a much better word. During his four and a half years as distric
t supervisor in New York, Gaffney set the highest standard of performance for his agents, and under his leadership the FBN would make landmark cases on four of the Mafia’s five fallen families, as well as two spectacular French connection cases.

  One factor in Gaffney’s success was his policy of maintaining good relations with the NYPD’s narcotic squad, whose detectives (unlike FBN agents) could legally install wiretaps without court approval and kick in doors on mere suspicion of wrongdoing. He also credits the Daniel Act as contributing to his success. “Until mandatory sentencing came along,” he explains, “it was impossible to get an informant inside the upper echelons of the Mafia. But once the judges started handing out forty-year prison sentences, we got the leverage we needed. No one wanted to do that much time.”

  Three other timely developments helped Gaffney and the New York office wage the FBN’s most successful campaign ever. The first was Albert Anastasia’s suicidal attempt to muscle in on the Cuban rackets. As boss of the old Mangano family, Anastasia controlled various labor union, gambling, and narcotics rackets in Brooklyn, New Jersey, and Las Vegas. He was powerful, yes, but he was a vicious megalomaniac too, and he not only took on Meyer Lansky and Santo Trafficante in Cuba, he mistakenly challenged the Commission itself, which was dominated by Vito Genovese and the closely allied Bonanno, Profaci, and Magaddino families.

  Anastasia’s downfall began in April 1957, when Italian drug smuggler and part-time FBN informant Giovanni Mauceri told Charlie Siragusa that a heroin shipment was being delivered to Frank Scalici in New York aboard a merchant ship from Marseilles. Something of a mystery – his fingerprints and criminal records have been removed from the files of all US government agencies – Scalici managed a Mafia narcotics syndicate based in the Bronx that dealt directly with French and Corsican wholesalers in Europe and Montreal.2 Unfortunately for Scalici, Siragusa was able to seize his heroin, as well as the Mafia money he’d fronted to Mauceri, which left Scalici holding a big empty bag. Anastasia, having kicked in some of the money for the purchase, concluded that Scalici had betrayed him, and on 17 June 1957, at Anastasia’s behest, Vincent Squillante shot and killed Scalici in front of a grocery store in the Bronx, as portrayed in the movie The Godfather.