Special Reports
The CIA -- Who is it benefiting? The American people or American corporations?
By Wayne Madsen
Online Journal Contributing Writer


Mar 6, 2009, 00:16

(WMR) -- On February 26, 2009, WMR reported on a major date that may bear great significance on the collapses, bailouts, and investigations of a number of major international firms tied to CIA covert activities.

WMR reported that on May 5, 2006, just three days prior to Dusty Foggo’s resignation as the CIA’s executive director, CIA Director Porter Goss resigned. On the same day that Goss resigned, President George W. Bush signed an order exempting publicly traded companies from accounting and disclosure procedures, required under the 1934 Securities Exchange Act, for national intelligence reasons. Then-Director of National Intelligence John Negroponte was delegated the authority to exempt companies from compliance with the SEC (Securities and Exchange Commission) law. (See Online Journal reprint.)

What Bush did with one stroke of a pen was to exempt companies like Stanford Financial Group, Bernard L. Madoff Investment Securities LLC, American International Group (AIG), and other companies linked to U.S., and, in the case of Madoff, Israeli, covert intelligence activities from normal oversight and regulation by the SEC. The director of National Intelligence (DNI), then John Negroponte, no stranger to the world of subterranean intelligence operations, was empowered to exempt CIA front companies from SEC oversight. It is not known whether President Obama’s DNI, Dennis Blair, retains this authority, but Congress should start asking about the Bush order and whether it remains in effect. And if the Senate and House Intelligence Committees insist on keeping any discussions about CIA front companies and slush funds behind closed doors, the committees responsible for banking and securities oversight should stand their ground and reject any interference, based on the old canard of “national security,” that may be offered up by the two dubious Democrats who chair the two intelligence oversight committees.

It can be expected that the first to obstruct an investigation of CIA front companies and slush funds will be Senator Dianne Feinstein (D-CA), who has a huge conflict-of-interest with her investment banker husband, Richard Blum, whose companies -- CB Richard Ellis, Newbridge Capital, and Blum Capital -- are linked to various Asian operations, some of which may have crossed paths with the intelligence activities of AIG, especially in China, Singapore, Hong Kong, and in two nations for whom Blum serves as honorary consul in San Francisco -- Nepal and Mongolia. Blum was also an investor in URS Corporation, which bought EG&G, a top intelligence contractor, from The Carlyle Group. Carlyle has close business links to the granddaddy of all CIA slush fund activities, George H. W. ”Poppy” Bush. Blum is also the founder and chairman of the American Himalayan Foundation. The CIA has a sordid history of covert operations in the Himalayas, particularly in Tibet and Nepal and, to a lesser extent, in Sikkim, Arunachal Pradesh, Ladakh, Kashmir, and Bhutan. WMR has previously reported on the presence of CIA front companies in the aviation business in Nepal and their connections to gold smuggling operations.

Feinstein’s House counterpart, Representative Sylvestre Reyes (D-TX), a former U.S. Border Patrol agent, is seen as one of the dimly lit bulbs in the House of Representatives, someone who did not know the difference between Shi’as and Sunnis and who has championed the U.S. Special Operations presence in the southern Philippines. The involvement of the CIA in drug smuggling and Reyes’ representation of a Mexican border congressional district (El Paso) ensures that when it comes to peering into the CIA’s money laundering activities and its dealings with drug cartels, Reyes will remain “silencioso.”

In the past decade, the American people have been massively ripped off by a coterie of people with odd nicknames who have literally helped themselves to the U.S. Treasury. “Dusty” Foggo and his dealings with Representative “Duke” Cunningham, ADCS President Brent Wilkes, and former CIA official Brant “Nine Fingers” Bassett were preceded by the dubious activities of Alvin Bernard “Buzzy” Krongard. Krongard, who resigned as CIA Executive Director shortly after Goss took over, was formerly the CEO and chairman of Alex Brown & Sons, the firm that once employed George H. W. Bush’s father, Prescott Bush. Buzzy Krongard also served as chairman of Banker’s Trust, another firm with a long-standing relationship with CIA money laundering activities.

Buzzy Krongard later joined the advisory board of Blackwater, which was being investigated for contract fraud and other violations by the State Department’s Inspector General, who happened to be Krongard’s brother, Howard “Cookie” Krongard.

And if that is not enough of nicknamed fraudsters, Dick Cheney’s indicted and convicted chief of staff, I. Lewis “Scooter” Libby, had been the attorney for Glencore Corporation’s Marc Rich, who was connected to Madoff through one of Rich’s investment managers, J. Ezra Merkin. Rich and Merkin had been friends through their membership in New York’s Fifth Avenue Synagogue.

The CIA’s shadowy connections to major and minor corporations has long been hidden from the prying eyes of congressional investigators and government regulators. Even CIA directors with relatively good records when it comes to full disclosure have maintained questionable links to Big Business.

WMR has obtained a January 6, 1978, memo from CIA Director Stansfield Turner to John DeButts, the president of AT&T and president of the Business Council of the United States. Turner, in accepting an invitation to speak at the Business Council’s dinner on February 17, 1978, at the Mayflower Hotel in Washington, DC, stated that DeButts was interested in what the CIA was “doing in the intelligence world, and particularly how it effects international business.” DeButts also offered Turner a chance to dangle a carrot to America’s top business executives. Turner was asked to “talk about how the business community could be of assistance” to him.

The links between the CIA and private businesses were at the heart of the October Surprise, the Iran-Contra scandal, the Savings & Loan debacle, the collapse of the Bank of Credit and Commerce International (BCCI) and Enron, and now the fall of the Stanford Financial Group and the financial woes of AIG. The late Senator Pat Moynihan (D-NY) introduced legislation in 1991 and 1995 to abolish the CIA and transfer its functions to the Department of State. That legislation should again be introduced. It is time for the CIA to be consigned to the archival dustbins, along with the Interstate Commerce Commission, the Civil Aeronautics Board, and the War Shipping Administration.

The American people have been subsidizing fraud through the covert operations of the CIA and the American people have been played for suckers by a cartoon-sounding collection of ne’er-do-wells with names like Buzzy, Scooter, Dusty, Cookie, Duke, Nine Fingers, and last, but not least, Poppy.

Previously published in the Wayne Madsen Report.

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