What cannot now be denied is that US intelligence agencies arranged for the release from prison of the world’s preeminent drug lord, allowed him to rebuild his narcotics empire, watched the flow of drugs into the largely black ghettoes of New York and Washington, D.C. escalate, and then lied about what they had done. This founding saga of the relationship between American spies and gangsters set patterns that would be replicated from Laos and Burma to Marseilles and Panama.
Lucky Luciano died in 1962 of a heart attack at the airport in Naples. He was there to meet a Hollywood producer interested in making a film of his life. A few weeks before he died Luciano gave an interview to an Associated Press reporter, who asked him why he had been released from prison. “I got my pardon because of the great services I rendered the United States,” Luciano said. Then the gangster grinned. “And, because, after all, they realized I was innocent.”
From the moment of its inception the CIA held to the same policies of its progenitors in keeping gangster organizations in business. By 1947 the Agency was backing heroin producers in Marseilles, Burma, Lebanon and western Sicily.
The Agency gave its first yelp of bureaucratic life on July 26, 1947, after a gestation period of more than a year. OSS chieftain Bill Donovan had first proposed a postwar Central Intelligence Service to FDR in the fall of 1944. The president was keen on the idea but died without taking any action on the matter. As Harry Truman pondered Donovan’s plan two influential figures lobbied vigorously against any such idea. FBI director J. Edgar Hoover saw any such postwar agency as a threat to his own organization and plunged into a deft propaganda campaign. Hoover’s friends in the press, such as Walter Trowhan of the Washington Times Herald, ran stories to the effect that Donovan was “out to create an all-powerful intelligence service to spy on the postwar world and pry into the lives of citizens at home.” At Hoover’s instigation, Trowhan drew lurid and not entirely fictional pictures of luxury-loving intelligence officers living high on the hog, funding themselves through bribery.
As vehement as Hoover was Secretary of the Navy James Forrestal. Already gripped by paranoia, Forrestal mistrusted the OSS as a nest of crypto-Communists who had leaked information to French intelligence and demonstrated an unseemly liking for Chou En-lai and the Chinese Communist revolution. Forrestal urged Truman to finish off the OSS and give supervision of intelligence back to the Office of Naval Intelligence and the Army’s G-2. Truman took the advice and shortly after VJ Day signed a curt order informing Donovan that OSS and indeed Donovan were permanently out of business.
With no congressional approval and financed out of the Pentagon’s budget, supervision of America’s multifarious intelligence organizations was in the hands of Admiral Sidney Souers, head of the Central Intelligence Group. Souers had served in Naval Intelligence during the war and was a Forrestal man. By this time US Army and Navy Intelligence officers were busy recruiting Nazi spies, SS men and scientists, and adding monsters like Klaus Barbie to the US government’s payroll. A big supporter of such hiring was George Kennan of the State Department. Kennan was furiously opposed to the Nuremberg trials. In one memo to the State Department’s Henry Leverich, who was planning postwar German economic reconstruction, Kennan wrote, “Whether we like it or not, nine-tenths of what is strong, able and respected in Germany has been poured into those very categories which we have in mind for purging from the German government – namely, those who had been more than nominal members of the Nazi Party.”
In a letter from the same period Kennan urged John J. McCloy, the US High Commissioner in Germany, to release thousands of Nazi war criminals because “the degree of relative guilt which such inquiries may bring to light is something of which I, as an American, prefer to remain ignorant.”
By 1947 it was becoming to clear to men like Forrestal and Kennan that a new permanent, well-financed intelligence agency was required, with the capacity not only for intelligence collection but for large-scale subversion. Concentrating the minds of these Cold War strategists were the upcoming 1948 elections in Italy, which could well produce a Communist majority through the ballot box. If Italy went, Kennan said, “our whole position in the Mediterranean and possibly in Europe as well would be undermined.”
The National Security Act of 1947, written by a high-flying young Democrat, Clark Clifford, created both the Air Force and the National Security Council, changed the name of the Department of War to the Department of Defense and, almost as an afterthought, conjured the Central Intelligence Agency into being. Nobody paid much attention to the intelligence part of the bill, Clifford said later. Forrestal testified before Congress that the CIA’s function would consist of intelligence analysis and that there would be no domestic component to its activities. Within months both these restraints had been breached, with Forrestal leading the charge.
The National Security Act was passed in July. By September Forrestal was ordering the CIA’s new director, Admiral Roscoe Hillenkoetter, to begin covert operations in Europe, in Italy and Greece. Hillenkoetter believed that this would overstep the CIA’s legal authority and sought an opinion from the Agency’s legal counsel, Lawrence Houston. On September 25, 1947 Houston wrote a memo, saying that even in the deliberately vague language of the CIA’s founding mandate he could not find any justification for Forrestal’s instruction. An enraged Forrestal promptly instructed Houston to go back and give a better opinion. Houston duly complied, reasoning that “[i]f the president gave us the proper directive and Congress gave us the money for those purposes, then we had the administrative authority to undertake those covert operations.”
Thus was set the modus operandi of the CIA for the next fifty years. Though Truman was pressing for the secret operations, his signature was on no compromising document. The authority for the operations was given by the National Security Council. There was no congressional appropriation, so funding came from private sources inside the US, through a network of proprietary front organizations, millionaires, and criminal enterprises.
The CIA’s intervention in the Italian elections offers the paradigm. The Agency swiftly plunged in propaganda, bribery, and blackmail across Italy. “Whether such illegal action [that is, suborning the 1948 election] also is immoral raises another question,” William Colby wrote in his own memoir, published in 1978. “The test involves both ends and means. The ends sought must be in the defense of the security of the state acting, not for aggression or aggrandizement, and the means used must be only those needed to accomplish that end, not excessive ones … This framework cannot justify every act of political interference by CIA since 1947, but it certainly does in the case of Italy.”
The alliance with the Mafia in Sicily continued to flourish as the election approached. Don Calogero and his thugs, including Vito Genovese’s cousin Giovanni Genovese, burned down eleven Communist Party branch offices, made four assassination attempts on the Sicilian Communist leader Girolamo Li Causi and opened fire on a crowd of workers and their families peaceably celebrating May Day in Palermo, killing eleven and wounding fifty-seven. One of Sicily’s leading labor organizers, Placido Rizzotto, was found at the bottom of a cliff, legs and arms chained and a bullet through his brain. His assassin was Luciana Leggio, a 23-year-old hitman for Lucky Luciano and Don Calo. During this period of CIA-backed terror and subversion the Sicilian Mafia alone was killing an average of five people a week.
Initially the Sicilian Mafia had been separatist in its political ambitions, seeking to render the island an independent state. The CIA counseled the advantages of dropping the formal separatist program while enjoying independent license for its operations under the patronage of an understanding government in Rome. The unattractive option would be a Communist central government entirely hostile to the Mafia.
As election day arrived, Don Calo convened a meeting of his lieutenants, who were instructed to stuff ballot boxes across Sicily and to dip into their drug accounts to distribute walking-around money with which to bribe voters. This precaution was prud
ent since the Communists were popular, pledging land reform and an end to corruption. Throughout Italy as a whole the Communists would probably have taken a majority of seats in the constituent assembly: Colby himself – who of course had reason to inflate – guessed at a Communist share of 60 percent without the CIA’s sabotage.
CIA officer Miles Copeland wrote twenty-nine years later that had it not been for the Mafia the Communists would now be in control of Italy, so crucial had the criminal organization been in murdering labor organizers and terrorizing the political process.
The CIA was also closely in league with the Vatican, itself still embroiled in its wartime alliance with the Nazis. The Vatican was smuggling to the West war criminals such as Father Andrija Artukovic, the Franciscan who had helped exterminate hundreds of thousands of Serbs in Croatia. Hiding in the Vatican was one Walter Rauff, a German Nazi who had spent the last months of the war leading an extermination unit of SS men across Italy, gassing to death some 250,000 victims, mainly Jewish women and children. Rauff’s protector was Allen Dulles’s old friend Monsignor Don Giusseppe Bicchierai, who assembled a terror gang charged with the task of beating up left-wing candidates, smashing political gatherings and intimidating voters. Their money, guns and jeeps were furnished by the CIA.
Thus was set the covert American occupation of Italy amid a pattern of ultra-right gangsterism and Mafia dominance that corrupted Italian political life for the next half-century.
The CIA’s financing mechanisms for these abuses of its charter came in the form of large subventions from American businessmen among whom Allen Dulles and Forrestal passed the hat at New York’s Brook Club, getting contributions from fearful millionaires such as Arthur Amory Houghton, president of Steuben Glass; John Hay Whitney, owner of the New York Herald Tribune; and Oveta Culp Hobby, owner of the Houston Post. It was a technique that Oliver North, subverting the will of Congress forty years later, matched exactly. And American business contributions to the undermining of democracy in Italy were tax deductible.
Dulles also tapped into the crates of Nazi gold that he had heisted during his OSS days in Switzerland during the war, when he was running Project Safehaven. The money was laundered through private foundations, a practice that became standard operating procedure.
The partnership with gangster drug traffickers in Sicily was mirrored in the CIA’s partnership with the Corsican underworld in Marseilles, a battleground in the Cold War. The labor unions, dominated by Communists, were strong and dockworkers were refusing to load military supplies on French ships headed to French Indochina, where Ho Chi Minh was leading the fight for independence. Also, Marseilles was a major entrepôt for supplies shipped into Europe under the Marshall Plan.
Politically, the Corsicans in Marseilles had been split during the war. Two of the leading gangsters in the city, François Spirito and Paul Carbone, had allied themselves with the mayor, Simon Sabiani, a Nazi collaborator. Spirito and Carbone headed up Sabiani’s secret police and went to work tracking down and killing members of the Resistance, which in turn managed to kill Carbone in 1943. Spirito avoided this fate, and made his way to New York after the war, where he became a kingpin in the heroin trade.
Many of the Corsicans were strongly anti-fascist, in part because Mussolini’s declared aim was to annex Corsica to Italy. These Corsicans worked in the French Resistance, where they were highly valued.
Among the leading Corsican gangsters at that time in Marseilles were the brothers Antoine and Barthelemy Guerini. They had apprenticed in their trade as enforcers for Paul Carbone but later went over to the Resistance. The Guerinis hid American and British intelligence agents in their nightclub and were rewarded for their services with arms and other supplies, which they were able to use to great advantage on the black market.
In 1945 a coalition of Communists and Socialists swept to power in Marseilles and made it an early order of business to declare war on the Corsican gangs. Such developments alarmed not only the Corsican gangsters but the United States and Charles de Gaulle as well. A counterattack was swiftly organized.
The aim was to divide and conquer by splitting the fragile left coalition. The CIA turned to American organized labor in the form of the AFL-CIO, which, from the end of the war to the early 1950s, funneled $1 million a year, to the Socialists, the price tag being severance of all political ties to the Communists. By 1947 De Gaulle’s party had regained power, and Marseilles’ new mayor was the right-wing Michele Carlini. He imposed an austerity regime that included hikes of bus fares that soon prompted strikes and boycotts, culminating in a large rally on November 12, 1947 after Guerini’s thugs, acting on Carlini’s orders, had attacked Communist members of the city council.
In response to these attacks, people poured into the streets, only to be met by a fusillade of bullets fired into them by the Guerinis and their men. Dozens were wounded and one man was killed. Although there were plenty of witnesses identifying the Guerinis, Carlini’s prosecutors declined to press charges. A general strike broke out across France, with 3 million workers walking off their jobs. In Marseilles the docks fell silent.
The CIA sent a team to Marseilles with arms and cash for the Guerinis, which were duly delivered by CIA officer Edwin Wilson (who was to achieve notoriety many years later for his work for Moammar Qaddafi). The CIA’s gangster agents embarked on a swift program of executive action, killing key strike organizers, paying legions of scab workers and stirring up riots on the docks. By early December the strike had been broken.
Three years later the pattern was repeated. Once again a strike closed down the Marseilles waterfront, aimed specifically at shipments of weapons and supplies destined for French forces in Indochina. Once again the CIA, working with the French Secret Service (SDECE), rallied the Guerinis to lead a terror campaign against the strikers. CIA funds sluiced into Marseilles, and into the Guerini bank accounts. Again the strike was beaten down, with many union organizers murdered, often by being pitched off the docks.
In this same year of 1950, Lucky Luciano, still based in Naples and with his supplies of heroin from the Schiaperelli pharmaceutical company cut off, was casting about for a new source of the drug. Meyer Lansky crossed the Atlantic to deal with the crisis. He went to Naples to confer with Luciano, to Marseilles to forge a partnership with the Guerinis and to Switzerland to set up the appropriate bank accounts, some of them in a Mob-owned bank called the Exchange and Investment Bank of Geneva.
Both Lansky and Luciano were eager to get out of the vulnerable business of heroin production and concentrate on drug sales. Production was assigned to the Guerinis and other Corsican syndicates based in Marseilles. The Corsicans already had a worldwide production network, with labs in Indochina, Latin America and the Middle East. They also enjoyed near perfect political protection. Not only did they have the gratitude of the French right (they had prudently never sold heroin in France) but also of the CIA, which had helped make them the most powerful force in Marseilles. Thus was forged the French Connection, whereby 80 percent of the heroin entering the United States via Cuba came from Marseilles with the compliance of US government agencies, primarily the CIA. Between 1950 and 1965 there were no arrests of any executive working in this French Connection. In 1965 a crackdown by the French government prompted a relocation of production to Indochina, where both the Corsican gangsters and the CIA were well entrenched.
The CIA’s protection of the Corsican drug syndicate extended well into the 1970s, as is evident in the case of Frank Matthews. Matthews rose from an impoverished black neighborhood in Durham, North Carolina to become one of the biggest heroin dealers on the East Coast, pulling down more than $130 million a year. He got his start selling heroin for New York City mobster Louis Cirillo, but by 1967 he decided to cut out the Mob and buy directly from the Corsican syndicates. In a hugely profitable enterprise, Matthews sold the dope through a network of laundries, pool halls and dime stores in New York, Baltimore, Cleveland, Philadelphia and Detroit.
In 1
973, Matthews was arrested for drug trafficking in Las Vegas. He was released on $325,000 bond. He returned to New York, picked up his girlfriend and $20 million in cash and disappeared. Charges against nine of Matthews’s Corsican suppliers were dropped at the insistence of the CIA, according to a 1976 Justice Department report. The Corsicans had been moonlighting for the CIA and the Agency argued that prosecuting them would compromise national security interests.
Sources
The account of Lucky Luciano’s handkerchief derives from Michele Pantaleone’s book The Mafia and Politics. Luciano’s deal with US Naval Intelligence is based largely on information disclosed in Rodney Campbell’s book The Luciano Project and the documents from the Herlands Commission, now part of the collection at the University of Rochester’s library. Al McCoy’s The Politics of Heroin is the primary source for the growth of the Marseilles heroin syndicates. Tom Braden and William Colby’s accounts of manipulating elections in Italy and France display a breathtaking hubris. A much more penetrating look at the Italian and French operations in the late 1940s and early 1950s can be found in William Blum’s remarkable history of the Agency, Killing Hope. The account of Allen Dulles passing the hat at the Brook Club to fund CIA covert operations is from David Wise’s early dissection of the CIA, The Espionage Establishment. Both Tim Weiner’s Blank Check and William Corson’s Armies of Ignorance were useful sources on how the CIA has used deceit, fearmongering and secrecy to build its $27 billion annual budget.
Aarons, Mark, and John Loftus. Unholy Trinity: The Vatican, the Nazis and Soviet Intelligence. St. Martin’s Press, 1991.
Anslinger, Harry. The Protectors. Farrar, Strauss. 1964.
Aron, Robert. France Reborn. Scribners, 1964.
Bloch, Alan A. East Side-West Side: Organizing Crime in New York, 1930–1950. Transaction Books, 1983.
——. “European Drug Traffic and Traffickers Between the Wars: The Policy of Suppression and Its Consequences.” Journal of Social History, vol. 23, no. 2, 1989.
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