“Well, the Laotian officials are off-limits,” Habib says, “so I spent most of the time in Houei Sai, where Corsicans were flying opium into Vietnam. I got two French informants and focused on them. The first, Gerard Lebinsky, had a plane but no money, and he made a case on François Mittard: eighty kilos of morphine base seized in Bangkok. Mittard owned the Concorde restaurant in Vientiane, where I went undercover and tried to make a case on [Bonaventure “Rock”] Francisci, who owned an air force [Air Laos Commerciale]. But there was no money to pay the informants, and a case is only as good as the informant.”26
“My other good informant,” Habib continues, “was introduced to me by an Army major in the Vietnamese Embassy in Bangkok. He knew the Vietcong were buying opium and taking it to Saigon, and through him I was introduced to a VC agent in a park in Bangkok. The VC were using small boats to transport small amounts to the Chinese in Saigon, and using the profits to buy guns. They wanted someone with a plane, so I agreed to play the part of the pilot.
“The ambassador gave his approval, and I went to Saigon, where I met with the deputy ambassador and an air force major. Well, the major gets excited and says, ‘We gotta bring in the CIA.’ Next thing I know, three CIA officers are in the room. One of them tells the major that we, the FBN, can’t run the operation. We have to introduce our informant to Vietnamese Customs. I told them to screw off. Later it turns out that Vietnamese Customs had a warehouse full of confiscated opium which they were selling out the back door.”
Evidently, it wasn’t profitable enough to simply protect its warlords and so, as Sal Vizzini noted in chapter 18, the CIA was actually flying opium to them. This was proven to be true on 30 August 1964, when Major Stanley C. Hobbs, allegedly a member of MACV Advisory Team 95, was caught smuggling fifty-seven pounds of opium from Bangkok to a clique of South Vietnamese officers. He had flown into Saigon on Air America. His general court martial in November 1964 at Ryukyu Island was conducted in secret for “security” reasons, and the defense witnesses were all US Army and South Vietnamese counterintelligence officers. The records of the trial have been lost, and though convicted, Hobbs was merely fined $3,000 and suspended from promotion for five years. As a protected drug courier, he served no time.27
FBN Commissioner Henry Giordano was well aware of the case and wrote a letter to Frank A. Bartimo, assistant general counsel (Manpower), at the office of the assistant secretary of defense, complaining about the sentence Hobbs received. After Andy Tartaglino asked for a record of the trial, which was not provided, Giordano sent a letter to Senator Thomas J. Dodd asking for help obtaining information. But Dodd was stonewalled too. Which only goes to show that in the mid-1960s, the espionage Establishment was, as it still is today, powerful enough to subvert federal drug law enforcement at the legislative level.
SUMMATION
By 1964, the FBN had more agents stationed overseas than ever before. Bill Durkin and Ray Maduro were in Mexico, and Jim Daniels (real name Snockhaus) was in Peru. Mike Picini was the supervisor in Rome, Hank Manfredi was his deputy, and Joseph Dino his administrative assistant. Vic Maria was in Paris, and Al Garofalo in Marseilles. Joseph Arpaio was the agent in charge in Turkey, and Dennis Dayle was raising hell in Beirut. Bowman Taylor and Charles Casey were in Bangkok, and gregarious, reckless Peter B. Niblo was in Hong Kong working closely with customs service Agent Stu Adams. Niblo had served in the CIA’s Audio Surveillance Division from 1951 until 1955, when he first joined the FBN, and had worked for Public Safety in Vietnam from 1960 until 1962, when he rejoined the FBN. He was well acquainted with the Far East and was the first American to work with Hong Kong’s police narcotics unit and its British advisor, John Browett. When he reported to Hong Kong in December 1963, the specific instruction Niblo received from Browett was “No undercover work, period!” Hong Kong had delicate relations with China at that point, which it did not want Niblo to disrupt, so as in every other place the FBN worked overseas, unilateral operations were strictly forbidden – though they were periodically conducted by TDY agents on special assignments.
Like his fellow agents abroad – who never numbered more than seventeen while the FBN was in existence – Niblo was a member of one of America’s most unique and extraordinary fraternities. It was a wolf pack not unlike the Gambling Squad, but scattered far and wide. As Dennis Dayle says, “We’d meet periodically in Rome, where Joe Dino had arrived as Picini’s administrative assistant to take the burden off Hank Manfredi. Joe was my old street partner from Chicago. Joe Arpaio in Turkey had been in Chicago too, so we were all old friends, and we stuck together.”
Alas, by 1965 even the FBN’s overseas wolf pack was already being targeted for extermination by the CIA.
22
THE EVE OF DESTRUCTION
“The only way you can make cases is if your informant sells dope.”
Agent Lenny Schrier
Sal Vizzini remembers when it all started coming apart. “There was a clique of case-making agents the Bureau relied upon, but got rid of starting around 1964,” he says, “after which their cases went sour because ‘the good guys’ screwed them up.
“My own problems began in August 1964,” he continues. “Giordano calls me up to Washington. Gaffney’s there too. They say they’re going to demote me from a grade twelve to an eleven because I gave a Lambretta to a Thai police captain in Bangkok – and for a few other things. I’ve got thirty days to appeal.
“ ‘Don’t make waves,’ Gaffney tells me. ‘Don’t resign. In a year you’ll be back.’ So against my better judgment I take the demotion and go undercover into Puerto Rico for Gaffney and Justice Department Attorney Robert Peloquin, who said that drugs were passing through Puerto Rican casinos on their way to New York. They gave me a refresher course in dealing cards, then I went in with my informers, Joey Rosa and Chester Gray. And through the narcotics chief down there, José Barber, I got a job as a croupier and made nineteen buys at the Ali Baba club. Nineteen cases! I think I’m going to work my way back in, but then three guys jump me in an alley. My back gets screwed up and I go on disability leave. That’s May 1965. By then Gene Marshall had been bagged, and within a week the whole shooting match goes to hell.”
Rick Dunagan, the rough-and-tumble agent introduced in chapter 19, was a witness to the emotionally charged events that led to the arrest and conviction on bribery charges of Gene Marshall, the high profile FBN agent in charge in Miami.
“It was early 1965,” Dunagan says, “and Nick Navarro was the new deputy sheriff assigned to the office [after his predecessor, Anthony DeLeon, became a fugitive]. Ray Cantu was there too. Ray was an older man who’d made cases along the lower Rio Grande and then gone with Public Safety in Panama. After that, he came back to the Bureau in Miami. Vizzini was claiming disability and wasn’t around much, and I was working undercover cases with Gene Marshall. Gene would play ‘Johnny Manila,’ and I’d pretend to be a diamond thief, and that’s how we made cases.
“Marty Saez had come down from Detroit. Marty was straight, and together we began making a case on the biggest Black trafficker in Miami at the time, Holton Newbolt. My informant, Sinbad, knew a junky named Old Willie who bought dope from Newbolt’s number two man, Slimy Smith. Sinbad put us with Old Willie and through Old Willie we made three buys off Slimy Smith.”
When Dunagan and Saez arrested Slimy, he had $3,000 in cash and a .25 automatic. But when Gene Marshall wrote up the report, he said that Slimy only had $300 and no gun. Dunagan complained, and the gun was returned to the office safe the next day. The money, however, went missing, and at his pre-trial hearing, Slimy made allegations against the FBN agents. Before he disappeared, Slimy also wrote a fifteen-page document about corruption in the Miami FBN office. Keeping in mind that drug defendants often give perjured testimony, his most serious charge, according to Dunagan, was that he had sold five ounces of heroin to an agent in an elevator in the federal building, in the presence of an Assistant US Attorney. Meanwhile, Holton Newbolt flipped and presented evid
ence to IRS Inspections about his financial relationship with Gene Marshall. Working with FBN headquarters, IRS Inspections tapped Marshall’s office phone and wired one of his informants, and on 20 April 1965 he was arrested at the home of the informant while taking a bribe.
“Gene Marshall was my idol,” Dunagan says emotionally, “and I got to know him well. His real name was Jacob Rosenthal. He was born in Germany and came to America before the war. I thought he was so cool. It wasn’t until afterwards that I started to see his flaws.”
Agent Gene Marshall, a handsome ladies’ man and one of Anslinger’s favorite agents, was thirty-eight when he was arrested and charged, with two Miami detectives, for taking bribes averaging $2,000 a month. The new enforcement assistant at FBN headquarters in Washington, John Enright, and the district supervisor in Atlanta, Daniel P. Casey (formerly George White’s enforcement assistant in San Francisco), participated in the arrest. “They were at the stool’s house,” Dunagan recalls, “when this new kid comes up and arrests Gene Marshall. Gene Marshall, who was ‘Mr. Narcotics’ in Miami, arrested by a rookie agent! It was just too much for the man, and during the trial he went goofy and pled insanity.
“It was Ray Cantu who finally had the guts to tell Casey about Marshall’s wheeling and dealing,” Dunagan says with grudging respect. “I remember wanting to punch Ray out at the time. I just couldn’t believe that Marshall was wrong. I was so mad I wanted to resign. But the secretary in Atlanta, Alice Lee Ginn, talked me out of it. ‘Rick,’ she said, ‘you’ve got seven kids already.’ ”
THE DETERIORATING SITUATION IN NEW YORK
In New York, the case-making agents were feeling the heat too. Charles J. Leya, Jr., a Pace College graduate and former Marine Corps lieutenant, joined the FBN in 1960 after a stint with the Nassau County Police Department. “My first job with the Bureau was keeping track of addicts as part of a survey for Congress,” Leya says. “Then I went into Group Two, and for the next three years I worked closely with three detectives from the NYPD’s Special Investigative Unit in the Bronx. This was at a time when most of the city detectives were deeply suspicious of the federal agents.
“There were about ninety agents in the New York office by then,” Leya continues, “and most of the integrity cases were isolated events, and were handled by the enforcement assistant or the district supervisor. But with the Joe Hermo incident, headquarters started getting involved again, like it had under Lee Speer.
“Hermo was in Group Four, and by the time I got there in 1964, Art Mendelsohn was in charge, and some of the agents in the group were pretending to be city cops when they kicked in doors. They’d hit an apartment, flash a detective’s shield, then make a deal with the occupant [not to arrest the person if he agreed to pay a bribe]. That’s what Hermo and a new guy named Danny McLinden did. The next day Hermo sends McLinden back to collect the money. But the occupant had complained to the police, and when McLinden arrived, inspectors from the NYPD’s Office of Internal Affairs were there waiting to bust what they thought were ‘bent’ city cops. Instead what they got was a federal agent. So they locked McLinden up, and he folded right away. Then they went after Hermo. They both lost their jobs, and the case opened up other investigations.”
While the Hermo case put the New York agents back under the microscope, sweeping social changes were heightening the racial tensions in the office. The 1964 Civil Rights Act established the Equal Employment Opportunity Commission and allowed minorities to qualify for management positions. Then the Johnson administration, which was already growing to dislike the FBN, enacted privacy laws that prevented cops from kicking in doors on suspicion. This measure was taken, in part, after six FBN agents forcefully entered a man’s apartment in November 1965 and arrested him for alleged narcotics violations. The agents cuffed Mr. Bivens in front of his wife and children, and threatened to arrest his entire family if he resisted arrest. Although no drugs were found, they took him to the federal courthouse in Brooklyn, where he was interrogated, booked, and subjected to a strip search. Bivens was so enraged he sued the agents – none of whom the author was able to identify – and won his case in court.1
Wiretaps on crooks that accidentally uncovered political corruption were also becoming an issue, so the Johnson administration imposed greater restrictions on electronic surveillance. And in 1966, the Miranda Law would prohibit compulsory self-incrimination and guarantee legal counsel to persons under arrest. The result of all these new “liberal” laws was fewer cases, and that meant fewer promotions for White agents, prompting some to complain that minority agents were being held to a lower standard at the expense of their Caucasian colleagues. “John Coursey got his grade eleven after only four years on the job,” one agent gripes.
On the flip side, as addiction spread in America’s increasingly angry and volatile ghettos, Black and Hispanic agents were asked to do more and more of the dangerous undercover work. They resented the fact that Norey Durham, as head of the Radio Shack, was still the only agent of color in New York at a grade twelve, and in a supervisory position, and eventually a group of Black agents filed suit with the Equal Employment Opportunity Commission.
When asked about racism in the FBN, Black undercover agent John T. Coursey bridles. “If everyone had been making cases, there wouldn’t have been a problem. But management was unable to guide people to that end. They were hung up on the formality of conducting investigations, of following ‘proper procedures,’ and making the process technological so they wouldn’t have to deal with people. Eventually it got to the point where there was no place left to put the people. But the policy-makers weren’t on the street. They never got a gun stuck in their ear. So it became a different problem to everyone, and from my perspective, the only significant White agent was Lenny Schrier. Lenny understood. The others were all on the fringe. Among the Black agents, Jack Peterson was the most significant. He and I caused the last panic in 1962–1963.”
Hired in 1959 and known as “the Egyptian,” sensible John Coursey knew how to make cases while not making waves. But some Black agents were politically outspoken, and they paid a price. John Kreppein, for example, had a reputation as one of the bravest agents in the office. “Kreppein would walk into the middle of a riot in Harlem and arrest someone,” a fellow agent says with awe. “But he was an admirer of [the US Representative from Harlem] Adam Clayton Powell, so a lot of White agents didn’t like him.”
One reason for Congressman Powell’s unpopularity among FBN agents was that, on 18 February 1965, he charged on the floor of Congress that cops were protecting drug dealers in Harlem at the going rate of $3,000 a month. On 4 March 1965, he named seven protected drug dealers in his district, including Leon Aikens and Frank Johnson. His accusations, along with his denunciation of the New York Times for its biased reporting, caused a furor and focused public attention on the fact that without police protection, there would not be so many addicts. Other Black leaders like Malcolm X went further and claimed that law enforcement allowed the Mafia to sell dope in ghettos as a form of political repression. Muslims thought to be working for the CIA or FBI assassinated Malcolm X on 21 February 1965. Powell also paid for his righteous attacks against the Establishment with an IRS investigation and, eventually, compulsory self-exile.2
By the mid-1960s, the racist, reactionary foundations of America’s drug problem, and the related issues of official corruption and the subversion of drug law enforcement by the espionage Establishment, could no longer be ignored. Columnist Carl Rowan noted that Major Stanley Hobbs, though convicted of smuggling fifty-seven pounds of opium into Vietnam (as noted in chapter 21), received only a fine and a stipulation that he wouldn’t be promoted for five years. “A kid in the slums who steals a loaf of bread will draw stiffer punishment than that,” Rowan quoted a “disgusted” official – Missouri Senator Stuart Symington – as saying.3
But outrage and disgust were minor irritants to an Establishment bent on expanding its empire and privileges, and America’s drug and rac
e problems would only worsen as official corruption flourished under the protection of the national security state.
UNFORTUNATE INFORMANTS
In early 1964, after he had finished filing his reports on the Gambling Squad, Lenny Schrier was finally, after five years of waiting, made a group leader. First he was put in charge of Group One, replacing Art Fluhr, who became George Belk’s executive assistant. Six months later Schrier took over Group Two, again for about six months, and while he was there, his group made a big case on Ramon Marquez, a Puerto Rican club-owner and drug dealer connected to members of the Genovese family. At the time of his arrest in December 1964, Marquez was credited with moving $25 million in cocaine from Corsican suppliers in Chile and Argentina, through anti-Castro Cubans operating in Honduras and Mexico, to other anti-Castro Cubans in Miami, as well as to the Angelet brothers in New York. The case was connected to the one Sal Vizzini was working on in Puerto Rico, and was representative of the new face of international drug trafficking. It was also an early sign that the Mafia was losing its monopoly over drug distribution in America.4
Finally, in early 1965, in recognition of his status as New York’s premier case-making agent, Lenny Schrier was made the leader of the reactivated International Group. FBN headquarters revived the International Group, after a four and a half year hiatus, to coordinate the organization’s expanding overseas operations with those in the United States. The revival of the International Group was also a tacit admission that headquarters officials, group leaders, and case-making agents were damaging the organization by running secret operations that undermined other agents’ cases. Alas, this attempt at reform came too late.
The Strength of the Wolf Page 46