Paul Helliwell (1915-76) began his career with the Secret Intelligence Branch of the Office of Strategic Services in Europe during World War II before becoming head of the Far East Division in 1945. He left the military after the war and joined a Miami law firm while also working for the CIA from the time it was formed in 1947.
In 1950, Helliwell was sent to Taiwan to help the Nationalist Chinese (KMT) prepare for an anticipated invasion of Communist China. There he founded two CIA front companies, an airline called Civil Air Transport (later renamed Air America) and a shipping company called Sea Supply that was located in Bangkok.
According to Joseph Trento’s Prelude to Terror, “Through Sea Supply, Helliwell imported large amounts of arms for the KMT soldiers to keep the Burmese military from throwing them out of the country. The arms were ferried into Burma on CAT airplanes. CAT then used the ’empty’ planes to fly drugs from Burma to Taiwan, Bangkok, and Saigon. There the drugs were processed for the benefit of the KMT and Chiang Kai-shek’s corrupt government on Taiwan.”
At the same time, Helliwell was becoming a well-known political lawyer in Florida. He helped the Republican Party organize there and was instrumental in carrying the state for Eisenhower in 1952, driving an early wedge into Democratic control of the “Solid South.”
When it became clear in the late 1950s that an invasion of China was not in the cards, the CIA’s focus shifted to keeping communism out of Southeast Asia. Helliwell established an alliance with Laotian drug lords, supplying them with sophisticated heroin-processing equipment in exchange for their support and using the drug profits to finance his operations.
In 1960, Helliwell was transferred to South Florida, where he became the paymaster for the CIA’s anti-Castro operations, set up a Sea Supply office in Miami, and worked with E. Howard Hunt, Lucien Conein, and Mitch WerBell on forming relationships with drug-dealing Cuban exiles, whom he appears to have to introduced to the arms-for-drugs model previously used in Southeast Asia.
Helliwell also established CIA relationships with organized crime in Florida. He allegedly worked with Meyer Lansky, who had moved his drug-smuggling operations to Miami after World War II, and with Santo Trafficante. Both men are said to have helped develop Castro assassination plots for the CIA.
After John Kennedy was assassinated in 1963, Helliwell began setting up CIA front corporations. These included the Mercantile Bank and Trust and the Castle Bank and Trust in the Bahamas, the American Bankers Insurance Company in Galveston, Texas, and Intercontinental Holding in the Cayman Islands.
According to The Daily Beast (in a now-paywalled article), Helliwell also advised Walt Disney around this time on how to set up phantom “cities” to maintain absolute control over the land on which Disney World was constructed.
An IRS investigation in 1973 found that the Castle Bank was being used by organized crime figures, but the investigation was allegedly dropped under CIA pressure when it started coming out that the bank was also laundering CIA funds and drug profits. This led the CIA to found the Nugan Hand Bank in Australia later that year as a non-Mob alternative. Helliwell died just three years later
The OSS in China
As described by Henrik Kruger in The Great Heroin Coup – Drugs, Intelligence, & International Fascism, “The place was Kunming in the South China province of Yunnan. The time was the end of World War II. Amid the chaos of war, opium and gold became the primary media of exchange, and cult-like bonds were forged among a small staff of Americans and high-ranking Chinese. Yunnan was a center of Chinese opium cultivation and Kunming was the hotbed of military operations, among them Claire Chennault’s 14th Air Force and Detachment 202 of the Office of Strategic Services.
Third World Traveler’s The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era also describes Kunming as “the very center of the World War II KMT drug traffic” and notes that “according to the Wall Street Journal, OSS payments at this base were frequently made with five-pound shipments of opium.” (The KMT was Chiang Kai-shek’s party, the Kuomintang, which ruled China until the communist takeover in 1949.)
Many members of Detachment 202 later joined the CIA, with Ray Cline and John K. Singlaub having the most public careers. Several others were involved in the shadier side of things, often involving operations that replicated the Kunming pattern of arms supplies funded by illicit drugs.
Paul Helliwell set up the CIA proprietaries Air America and Sea Supply to support the KMT on Taiwan and used them to carry on an arms-for-drugs trade involving KMT troops that had taken refuge in Burma. In 1960, he was transformed to the CIA’s Cuban operations out of Miami, where he worked with drug-dealing Cuban exiles and founded offshore money-laundering banks that were also used by organized crime.
E. Howard Hunt had an extended CIA career and was at times associated with Lucien Conein, who had not been a member of Detachment 202 but had met Hunt while he was stationed in Kunming. Conein was the CIA’s top expert on Southeast Asia and was allegedly involved in the assassination of South Vietnamese President Ngo Dinh Diem in 1963. He is also said to have served as the CIA’s liaison to the Corsican Mafia, who were deeply involved in the Saigon drug trade and were buying off the Vietnamese government.
Hunt and Conein worked together in the Nixon White House, along with another Kunming veteran, Mitch WerBell, who never officially joined the CIA.
The 1970s were a bizarre era of covert operations, hidden power struggles, and unlikely alliances. It was a time when some of the CIA’s most senior offers went rogue, when old-line Nazis and neo-fascists made their final bid for power and respectability, and when the specter of communism started giving way to global terrorism as the West’s greatest boogeyman.
At the start of the decade, covert operations were dominated by a cluster of overlapping interests that included the CIA, the China Lobby, anti-Castro Cuban exiles, and organized crime. All of these were involved in off-the-book schemes that were funded by arms sales, drug trafficking, and money-laundering. All played a role in the Vietnam War and were associated with the illicit activities run out of the Nixon White House. But with Nixon’s fall and the exposure of CIA abuses, this nexus increasingly escaped any kind of government control and became a power unto itself.
A second nexus of power brought together old-line anti-communists, young conservatives energized by the decline of the 60s counterculture, and a motley collection of racists, John Birchers, and the religious right. All of these were to be found participating in organizations such as the World Anti-Communist League, where they studied the dark arts of propaganda and destabilization and at times rubbed shoulders with outright fascists. Jesse Helms, who became a center of conservative organizing after his election to the U.S. Senate in 1972, was particularly notorious for his connections with Latin American dictatorships, and Reverend Moon’s Unification Church also formed a point of contact between mainstream conservatives in the U.S. and Latin American and Asian fascists.
There are a number of intriguing questions concerning the strength of the fascist element within the general conservative resurgence of the period. Were its ambitions for a Fourth Reich ever more than pipe dreams? How many of the terrorist incidents blamed on left-wing radicals were actually false-flag operations carried out by the far right? What role did drug smuggling, particularly the Latin American cocaine trade, play in maintaining its operations?
Finally, there was a third nexus that only emerged later in the decade and in part represented a reaction against the excesses of the first two. It gradually distanced itself from both kneejerk anti-communism and overt fascism and was rooted instead in the emerging cult of free-market capitalism associated with Margaret Thatcher and Ronald Reagan. As the power of the Soviet Union declined, it adopted radical Islamic terrorism as a substitute threat, one capable of aligning Neocons, the military-industrial complex, rogue CIA figures, and the growing counter-terrorism industry. For reasons of their own, both Israel and the Saudis were also associated with this new alliance.
The public events and policies of the 1970s shaped the world we live in today. But the covert forces and strategies of the decade may be even more crucial to understanding where true power now lies and how it distorts our perceptions of the world and cripples our ability to address its problems.
(Revised October 3, 2017)
Theodore Shackley (1927-2002) joined the CIA in the early 1950s and rose to become station chief in Miami in 1962-65, when it was heavily focused on Castro’s Cuba, following the abortive Bay of Pigs operation. He oversaw the operation known as JMWAVE that was dedicated to overthrowing Castro’s government and was the largest CIA operation in the world.
In 1966-68, Shackley served as CIA station chief in Laos, where he oversaw the secret war of Hmong tribesman against the North Vietnamese and suspected communists. He allegedly paid them in part with the profits of the trade in opium, which the Hmong grew and which was flown to Thailand by the CIA’s Air America.
Shackley then became station chief in Vietnam, where his drug-smuggling operation ballooned after Florida mob boss Santo Trafficante, Jr. visited Saigon in 1968. The profits went to fund the assassination squads of Operation Phoenix, although Shackley himself was not in charge of those operations.
Shackley’s associates during this period included Thomas Clines, who oversaw the Hmong in Laos; Richard Secord, who coordinated the arms and drugs flights; Richard Armitage, who was a naval officer in Saigon and later an embassy employee in Thailand; Donald Gregg; and Felix Rodriguez.
In February 1972, Shackley returned to the US and became head of the CIA’s Western Hemisphere Division, which was focused on the overthrow of Salvador Allende in Chile, which occurred on September 11, 1973. It has been claimed that Shackley coordinated with P2, which is said to have been implicated in the coup.
Meanwhile, Clines and Secord remained in Vietnam, where the excess profits of the heroin trade were allegedly smuggled out of the country and deposited in an account in the money-laundering [[Nugan Hand Bank]], which had been established in Australia in 1973. They also allegedly smuggled weapons out of Vietnam and stories them in Thailand. After the fall of South Vietnam in April 1975, they increasingly went rogue and kept both the money and the arms under their own control.
Around this time, Shackley and Clines sent Armitage to Iran to set up an unauthorized operation that would funnel drug money from Southeast Asia and create a covert assassination program for the Shah. In late 1975 or early 1976, [[Edwin Wilson]] of Air America was sent to head this program and train the secret police, SAVAK, in assassination techniques. Secord was also in Iran at this time. This operation helped lead to the overthrow of the Shah in 1979.
George H.W. Bush became CIA director in January 1976, and Shackley was made Deputy Director of Operations that May, with the expectation that he would eventually succeed Bush as director. However, when Jimmy Carter became president in January 1977, he replaced Bush with Stansfield Turner, who began dismantling the covert operations apparatus and pulled Shackley’s people out of Iran. Shackley himself was demoted at the end of 1977.
Over the next couple of years, Shackley, Clines, Wilson, Secord, and former CIA employee Frank Terpil were involved in various covert businesses, with a focus on Middle Eastern arms dealing. Wilson’s arms sales to Colonel Qaddafi eventually got them all in trouble and led to Shackley and Clines being forced out of the CIA in 1979.
Shackley still had hopes of returning to the CIA as director if Carter was defeated. He supported Bush’s presidential aspirations and continued to meet with Bush during the 1980 Reagan-Bush campaign. There are rumors that he helped set up the October Surprise.
By then, Wilson had become involved in supplying arms to the Contras in Nicaragua and also allegedly in the cocaine trade. During the 1980s, Shackley, Clines, and Secord were all involved in the Reagan administration’s off-the-books support for the Contras, and allegedly in the arms and drugs trade as well.
During the Vietnam War, Theodore Shackley and Donald Gregg were running a CIA racket in which the proceeds of opium-smuggling funded assassinations. In 1970, Felix Rodriguez joined them. This was the heart of the later “Enterprise.”
It was Shackley who allegedly formed the Military Assistance Group-Special Operations Group (MAG-SOG), where John K. Singlaub was a commander and Oliver North and Richard Secord were officers. By 1971, the group is said to have killed about 100,000 civilians in Southeast Asia.