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.
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.
Supreme Court Justice Arthur Goldberg once stated that “The Dulles brothers were traitors.” Some historians believe that Allen Dulles became head of the newly formed CIA in large part to cover up his treasonous behavior and that of his clients.
Christian Dewar, Making a Killing
Just before his death, James Jesus Angleton, the legendary chief of counterintelligence at the Central Intelligence Agency, was a bitter man. He felt betrayed by the people he had worked for all his life. In the end, he had come to realize that they were never really interested in American ideals of “freedom” and “democracy.” They really only wanted “absolute power.”
Angleton told author Joseph Trento that the reason he had gotten the counterintelligence job in the first place was by agreeing not to submit “sixty of Allen Dulles’ closest friends” to a polygraph test concerning their business deals with the Nazis. In his end-of-life despair, Angleton assumed that he would see all his old companions again “in hell.”
Michael Hasty, Paranoid Shift
The study of the past is beset by uncertainty. Experts on ancient inscriptions can easily get into arguments over whether or not two prominent people with the same name were actually a single individual. The student of modern history doesn’t normally run into such problems because our lives today are so well documented. But suppose that most present-day records were to be lost in the course of time, leaving only a few semi-mythic narratives. In that case, future historians might well conclude that the only way to make sense of the twentieth century was by assuming that there were actually two Allen Dulleses.
One Allen Dulles, they would tell us, was the head of a powerful group of covert agents who served the great American Republic at mid-century. The other, who lived and worked slightly earlier, had been dedicated to promoting the interests of the Nazi Reich, which was the sworn enemy of the Americans. Despite the coincidence of names, there could obviously have been no connection between them.
We, with our documentation intact, have no choice but to accept that these two Allen Dulleses were one and the same. But the price of our superior knowledge is that for us the twentieth century threatens to make no sense at all.
How do we begin to untangle this puzzle? Perhaps it would help if we went back to the start.
Allen Welsh Dulles was born to privilege and a tradition of public service. He was the grandson of one secretary of state and the nephew of another. But by the time he graduated from Princeton in 1914, the robber baron era of American history was coming to an an end, ushered out by the Sherman Anti-Trust Act — which had been used in 1911 to break up Standard Oil — and by the institution of the progressive income tax in 1913. The ruling elite was starting to view government less as their own private preserve and more as an unwanted intrusion on their ability to conduct business as usual. That shift of loyalties in itself may account for many of the paradoxical aspects of Dulles’s career.
Dulles entered the diplomatic service after college and served as a State Department delegate to the Paris Peace Conference of 1919 which brought a formal end to World War I. The Versailles Treaty that came out of the conference included a provision making it illegal to sell arms to Germany. This displeased the powerful DuPont family, and they put pressure on the delegates to allow them to opt out. It was Allen Dulles who finally gave them the assurances they wanted that their transactions with Germany would be “winked at.”
Dulles remained a diplomat through the early 1920s, spending part of that time in Berlin. However, he left government service in 1926 for the greener pastures of private business, becoming a Wall Street lawyer with the same firm as his older brother, John Foster Dulles.
By the middle 1920s, Germany had started recovering from the effects of the war and its postwar economic collapse, and the great German industrial firms were looking like attractive investment opportunities for wealthy Americans. W.A. Harriman & Co., formed in 1919 by Averell Harriman (son of railroad baron E.H. Harriman) and George Herbert Walker, had led the way in directing American money to German companies and had opened a Berlin branch as early as 1922, when Germany was still in chaos. At that time, Harriman traveled to Europe and made contact with the powerful Thyssen family of steel magnates. It was to be a long-lasting and fateful partnership.
The Thyssens’ steel business had suffered greatly from Germany’s defeat, and old August Thyssen had decided to guard against future setbacks by creating a system of private banks. He founded one in Berlin and another in the city of Rotterdam in the Netherlands. In the wake of Harriman’s trip, a third bank was added to the network, the Union Banking Corporation, founded in New York in 1924 with George Herbert Walker as president. Having their own personal banking system made it easy for the Thyssens to move assets around, launder money, conceal profits, and evade taxes.
By 1926, W.A. Harriman was doing so well that Walker gave his son-in-law, Prescott Bush the gift of making him a vice president. In 1931, the company merged with a British firm to create Brown Brothers, Harriman and Bush became a senior partner. During the 1930s, Brown Brothers, Harriman would increasingly direct its clients’ investments to German companies. The Rockefeller family was prominent among these clients, and Standard Oil developed particularly close connections with chemical giant I.G. Farben.
It was into this heady atmosphere of high-level investments and financial manipulation that Allen Dulles entered when he joined the firm of Sullivan and Cromwell in 1926. He would become the lawyer for the Thyssens’ Rotterdam bank and would also represent other German firms, including I.G. Farben.
However, there was a serpent in this businessmen’s Eden, and its name was Adolph Hitler. August Thyssen’s son and successor, Fritz Thyssen, was an enthusiastic supporter of Hitler and had been funding the Nazi Party since 1923. Other German industrialists would do the same. It’s hard to say to what extent the American investors shared Thyssen’s enthusiasm, though it seems likely that most of them were swayed less by ideology than by the prospect that Hitler would be good for business. Either way, the outcome was that many wealthy and powerful Americans wound up supporting a regime that would ultimately become their own nation’s enemy, and investing in the very firms that would provide the core of that regime’s military machine.
Early in 1933, both Dulles brothers attended a meeting in Germany where German industrialists agreed to back Hitler’s bid for power in exchange for his pledge to break the German unions. A few months later, John Foster Dulles negotiated a deal with Hitler’s economics minister whereby all German trade with the United States would be coordinated through a syndicate headed by Averell Harriman’s cousin. With the Nazis enforcing a favorable climate for business, the profits for Thyssen and other companies soared, and the Union Banking Corporation increasingly became a Nazi money-laundering machine. In 1934, George Herbert Walker placed Prescott Bush on Union Bank’s board of directors, and Bush and Harriman also began to use the bank as the basis for a complex and deceptive system of holding companies.
The Hamburg-Amerika shipping line, which Harriman and Walker had controlled since 1920, had a particularly high degree of Nazi involvement in its operations. In 1934, a congressional investigation revealed it to have become a front for I.G. Farben’s spying, propaganda, and bribery on behalf of the German government. Rather than advising Walker and Harriman to divest themselves of these tainted assets, Prescott Bush hired Allen Dulles to help conceal them. From 1937 on, the Dulles brothers would serve Bush and Harriman in all their covert dealings with Nazi firms. They also performed similar cloaking services for others, like the Rockefellers.
It goes without saying that Harriman, Walker, Bush, and Dulles were morally tainted by their connections with German firms like Thyssen and I.G. Farben, since they both funded and profited from Hitler’s crimes against humanity. However, their entire enterprise was corrupt in a more subtle sense as well, in that its very basis was financial fraud on an unprecedented scale. That would have been true even if Hitler had never come to power. The real significance of adding the Nazis to the equation was that it upped the stakes, both increasing the potential rewards for the participants and forcing them into increasingly elaborate deceptions to conceal their frauds.
The American government was not the only object of these deceptions. In the late 1930s, Fritz Thyssen, worried about the economic impact of the oncoming war, started concealing his assets. He placed many of them under the names of distant relatives in Holland and also moved large amounts of cash through his family’s Rotterdam bank and from there to the Union Banking Corporation in New York. He was aided in this by Prescott Bush, George Herbert Walker, and Allen Dulles.
(Thyssen was not the only German who felt an impulse at this time to protect his wealth against the gathering storm. My best friend in high school was the daughter of German Jewish refugees, and she used to tell me with relish about how her grandparents cannily put their property into the hands of various non-Jewish friends before fleeing Europe and then returned after the war to reel it all back in. But Thyssen was no sweet old Jewish granny, and his machinations and those of his American friends amounted to treason against both nations.)
After the attack on Pearl Harbor in 1941 brought the United States into the war, the close associations of so many of its leading industrialists with German firms began to catch up with them. For example, it was discovered that Standard Oil had engaged in a cartel with I.G. Farben to produce artificial rubber and gasoline from coal for the Nazis. They had renewed this agreement even after war broke out in Europe in 1939 and had supplied certain patents to the Germans while keeping them hidden from the U.S. Navy and American industry.
John D. Rockefeller, Jr., the principal owner of Standard Oil, claimed he had no involvement in day-to-day operations, leaving the blame to fall entirely on company chairman William S. Farish. Farish — whose daughter was married to Averell Harriman’s nephew — pled “no contest” to charges of criminal conspiracy in March of 1942 and agreed to make the patents available in the US. However, fresh revelations kept coming out, and Farish was called repeatedly to testify before a Senate committee investigating national defense. His health broken by the increasingly hostile questioning, he collapsed and died of a heart attack in November 1942.
Around the same time, in October of 1942, Prescott Bush was charged with running Nazi front groups, and all shares of the Union Banking Corporation were seized by the U.S. Alien Property Custodian. The elaborate system of holding companies which Bush and Harriman had created in association with the bank started unraveling as well. Things were looking very bad for the old gang.
But just then, Allen Dulles worked a miracle. He not only escaped being called to account for his Nazi connections but ended up running the all-important station of the Office of Strategic Services in Switzerland, while Harriman became ambassador to Russia. My best explanation is that due to years of isolation, the U.S. government was short of Europe experts, but there may be more to it than that.
In any case his peculiar relationships continued after the war, as I describe in Allen Dulles - The Postwar Years.
March 2005
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