George Bush: The Unauthorized Biography - Part 6 of 8

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In late 1975, as a result in particular of his role in Watergate, Bush's

confirmation as CIA director was not automatic. And though the debate at

his confirmation was superficial, some senators, including in particular

the late Frank Church of Idaho, made some observations about the dangers

inherent in the Bush nomination that have turned out in retrospect to be


The political scene on the home front, from which Bush had been so anxious

to be absent during 1975, was the so-called "Year of Intelligence," in that

it had been a year of intense scrutiny of the illegal activities and abuses

of the intelligence community, including CIA domestic and covert

operations. On December 22, 1974, the "New York Times" published the first

of a series of articles by Seymour M. Hersh, which relied on leaked reports

of CIA activities assembled by Director James Rodney Schlesinger to expose

alleged misdeeds by the agency.

It was widely recognized at the time that the Hersh articles were a

self-exposure by the CIA that was designed to set the agenda for the

Ford-appointed Rockefeller Commission, which was set up a few days later,

on January 4. The Rockefeller Commission was supposed to examine the

malfeasance of the intelligence agencies and make recommendations about how

they could be reorganized and reformed. In reality, the Rockefeller

Commission proposals would reflect the transition of the structures of the

1970s toward the growing totalitarian tendencies of the 1980s.

While the Rockefeller Commission was a tightly controlled vehicle of the

Eastern Anglophile Liberal Establishment, congressional investigating

committees were impaneled during 1975 whose proceedings were somewhat less

rigidly controlled. These included the Senate Intelligence Committee, known

as the Church Committee, and the corresponding House committee, first

chaired by Rep. Lucien Nedzi (who had previously chaired one of the

principal Watergate-era probes), and then (after July) by Rep. Otis Pike.

One example was the Pike Committee's issuance of a contempt of Congress

citation against Henry Kissinger for his refusal to provide documentation

of covert operations in November 1975. Another was Church's role in leading

the opposition to the Bush nomination.

The Church Committee launched an investigation of the use of covert

operations for the purpose of assassinating foreign leaders. By the nature

of things, this probe was led to grapple with the problem of whether covert

operations sanctioned to eliminate foreign leaders had been re-targeted

against domestic political figures. The obvious case was the Kennedy


Frank Church -- who, we must keep in mind, was himself an ambitious

politician -- was especially diligent in attacking CIA covert operations,

which Bush would be anxious to defend. The CIA's covert branch, Church

thought, was a "self-serving apparatus." "It's a bureaucracy which feeds on

itself, and those involved are constantly sitting around thinking up

schemes for [foreign] intervention which will win them promotions and

justify further additions to the staff.... It self-generates interventions

that otherwise never would be thought of, let alone authorized." / Note #1

It will be seen that, at the beginning of Bush's tenure at the CIA, the

congressional committees were on the offensive against the intelligence

agencies. By the time that Bush departed Langley, the tables were turned,

and it was the Congress which was the focus of scandals, including

Koreagate. Soon thereafter, the Congress would undergo the assault of


Preparation for what was to become the "Halloween massacre" began in the

Ford White House during the summer of 1975. The Ford Library in Ann Arbor,

Michigan preserves a memo from Donald Rumsfeld to Ford dated July 10, 1975,

which deals with an array of possible choices for CIA director. Rumsfeld

had polled a number of White House and administration officials and asked

them to express preferences among "outsiders to the CIA." / Note #2

Dick Cheney of the White House staff proposed Robert Bork, followed by Bush

and Lee Iacocca. Among the officials polled by Cheney was Henry Kissinger,

who suggested C. Douglas Dillon, Howard Baker and Robert Roosa. Nelson

Rockefeller was also for C. Douglas Dillon, followed by Howard Baker, and

James R. Schlesinger. Rumsfeld himself listed Bork, Dillon, Stanley Resor,

Lee Iacocca and Walter Wriston, but not Bush. The only officials putting

Bush on their "possible" lists, other than Cheney, were Jack O. Marsh, a

White House counselor to Ford, and David Packard. When it came time for

Rumsfeld to sum up the aggregate number of times each person was mentioned,

minus one point for each time a person had been recommended against, among

the names on the final list were the following: Robert Bork (rejected in

1987 for the Supreme Court), John S. Foster of PFIAB (formerly of the

Department of Defense), C. Douglas Dillon, Stanley Resor, and Robert Roosa.

It will be seen that Bush was not among the leading candidates, perhaps

because his networks were convinced that he was going to make another

attempt for the vice-presidency and that therefore the Commerce Department

or some similar post would be more suitable. The summary profile of Bush

sent to Ford by Rumsfeld found that Bush had "experience in government and

diplomacy" and was "generally familiar with components of the intelligence

community and their missions" while having management experience. Under

"Cons" Rumsfeld noted: "RNC post lends undesirable political cast."

As we have seen, the CIA post was finally offered by Ford to Edward Bennett

Williams, perhaps with an eye on building a bipartisan bridge toward a

powerful faction of the intelligence community. But Williams did not want

the job. Bush, originally slated for the Department of Commerce, was given

the CIA appointment.

The announcement of Bush's nomination occasioned a storm of criticism,

whose themes included the inadvisability of choosing a Watergate figure for

such a sensitive post so soon after that scandal had finally begun to

subside. References were made to Bush's receipt of financial largesse fr om

Nixon's Townhouse fund and related operations. There was also the question

of whether the domestic CIA apparatus would get mixed up in Bush's expected

campaign for the vice-presidency. These themes were developed in editorials

during the month of November 1976, while Bush was kept in Beijing by the

requirements of preparing the Ford-Mao meetings of early December. To some

degree, Bush was just hanging there and slowly, slowly twisting in the

wind. The slow-witted Ford soon realized that he had been inept in

summarily firing William Colby, since Bush would have to remain in China

for some weeks and then return to face confirmation hearings. Ford had to

ask Colby to stay on in a caretaker capacity until Bush took office. The

delay allowed opposition against Bush to crystallize to some degree, but

his own network was also quick to spring to his defense.

Former CIA officer Tom Braden, writing in the "Fort Lauderdale News", noted

that the Bush appointment to the CIA looked bad, and looked bad at a time

when public confidence in the CIA was so low that everything about the

agency desperately needed to look good. Braden's column was entitled

"George Bush, Bad Choice for CIA Job."

Rowland Evans and Robert Novak, writing in the "Washington Post", commented

that "the Bush nomination is regarded by some intelligence experts as

another grave morale deflator. They reason that any identified politician,

no matter how resolved to be politically pure, would aggravate the CIA's

credibility gap. Instead of an identified politician like Bush ... what is

needed, they feel, is a respected non-politician, perhaps from business or

the academic world."

The "Washington Post" came out against Bush in an editorial entitled "The

Bush Appointment." Here the reasoning was that this position "should not be

regarded as a political parking spot," and that public confidence in the

CIA had to be restored after the recent revelations of wrongdoing.

After a long-winded argument, the conservative columnist George Will came

to the conclusion that Ambassador Bush at the CIA would be "the wrong kind

of guy at the wrong place at the worst possible time."

Senator Church viewed the Bush appointment in the context of a letter sent

to him by Ford on October 31, 1975, demanding that the committee's report

on U.S. assassination plots against foreign leaders be kept secret. In

Church's opinion, these two developments were part of a pattern, and

amounted to a new stonewalling defense by what Church had called "the rogue

elephant." Church issued a press statement in response to Ford's letter

attempting to impose a blackout on the assassination report. "I am

astonished that President Ford wants to suppress the committee's report on

assassination and keep it concealed from the American people," said Church.

Then, on November 3, Church was approached by reporters outside of his

Senate hearing room and asked by Daniel Schorr about the firing of Colby

and his likely replacement by Bush. Church responded with a voice that was

trembling with anger. "There is no question in my mind but that concealment

is the new order of the day," he said. "Hiding evil is the trademark of a

totalitarian government." / Note #3

The following day, November 4, Church read Leslie Gelb's column in the "New

York Times" suggesting that Colby had been fired, among other things, "for

not doing a good job containing the congressional investigations." George

Bush, Gelb thought, "would be able to go to Congress and ask for a grace

period before pressing their investigations further." A "Washington Star"

headline of this period summed up this argument: "CIA Needs Bush's PR

Talent." Church talked with his staff that day about what he saw as an

ominous pattern of events. He told reporters: "First came the very

determined administration effort to prevent any revelations concerning NSA,

their stonewalling of public hearings. Then came the president's letter.

Now comes the firing of Colby, Mr. Schlesinger, and the general belief that

Secretary Kissinger is behind these latest developments." For Church,

"clearly a pattern has emerged now to try and disrupt this [Senate

Intelligence Committee] investigation. As far as I'm concerned, it won't be

disrupted," said Church grimly.

One of Church's former aides, speech writer Loch K. Johnson, describes how

he worked with Church to prepare a speech scheduled for delivery on

November 11, 1975, in which Church would stake out a position opposing the

Bush nomination: "The nomination of George Bush to succeed Colby disturbed

him and he wanted to wind up the speech by opposing the nomination.... He

hoped to influence Senate opinion on the nomination on the eve of Armed

Services Committee hearings to confirm Bush.

"I rapidly jotted down notes as Church discussed the lines he would like to

take against the nomination. 'Once they used to give former national party

chairmen [as Bush had been under President Nixon] postmaster generalships

-- the most political and least sensitive job in government,' he said. 'Now

they have given this former party chairman the most sensitive and least

political agency.' Church wanted me to stress how Bush 'might compromise

the independence of the CIA -- the agency could be politicized.'|"

Some days later, Church appeared on the CBS program "Face the Nation." He

was asked by George Herman if his opposition to Bush would mean that anyone

with political experience would be "a priori" unacceptable for such a post.

Church replied: "I think that whoever is chosen should be one who has

demonstrated a capacity for independence, who has shown that he can stand

up to the many pressures." Church hinted that Bush had never stood up for

principle at the cost of political office. Moreover, "a man whose

background is as partisan as a past chairman of the Republican Party does

serious damage to the agency and its intended purposes." / Note #4

The Brown Brothers Harriman/Skull and Bones crowd counterattacked in favor

of Bush, mobilizing some significant resources. One was none other than

Leon Jaworski, the former Watergate special prosecutor. Jaworski's mission

for the Bush network appears to have been to get the Townhouse and related

Nixon slush fund issues off the table of the public debate and confirmation

hearings. Jaworski, speaking at a convention of former FBI special agents

meeting in Houston, defended Bush against charges that he had accepted

illegal or improper payments from Nixon and CREEP operatives. "This was

investigated by me when I served as Watergate special prosecutor. I found

no involvement of George Bush and gave him full clearance. I hope that in

the interest of fairness, the matter will not be bandied about unless

something new has appeared on the horizon."


More Opposition

Negative mail from both houses of Congress was also coming in to the White

House. On November 12, GOP Congressman James M. Collins of Dallas, Texas

wrote to Ford: "I hope you will reconsider the appointment of George Bush

to the CIA. At this time it seems to me that it would be a greater service

for the country for George to continue his service in China. He is not the

right man for the CIA."

There was also a letter to Ford from Democratic Congressman Lucien Nedzi of

Michigan, who had been the chairman of one of the principal House Watergate

investigating committees. Nedzi wrote as follows: "The purpose of my letter

is to express deep concern over the announced appointment of George Bush as

the new Director of the Central Intelligence Agency.

"... [H]is proposed appointment would bring with it inevitable

complications for the intelligence community. Mr. Bush is a man with a

recent partisan political past and a probable near-term partisan political

future. This is a burden neither the Agency, nor the legislative oversight

committee, nor the Executive should have to bear as the CIA enters perhaps

the most difficult period of its history.

"Accordingly, I respectfully urge that you reconsider your appointment of

Mr. Bush to this most sensitive of positions." / Note #5

Within just a couple of days of making Bush's nomination public, the Ford

White House was aware tha t it had a significant public relations problem.

To get reelected, Ford had to appear as a reformer, breaking decisively

with the bad old days of Nixon and the Plumbers. But with the Bush

nomination, Ford was putting a former party chairman and future candidate

for national office at the head of the entire intelligence community.

Ford's staff began to marshal attempted rebuttals for the attacks on Bush.

On November 5, Jim Connor of Ford's staff had some trite boiler-plate

inserted into Ford's Briefing Book in case he were asked if the advent of

Bush represented a move to obstruct the Church and Pike Committees. Ford

was told to answer that he "has asked Director Colby to cooperate fully

with the Committee" and "expects Ambassador Bush to do likewise once he

becomes Director. As you are aware, the work of both the Church and Pike

Committees is slated to wind up shortly." / Note #6 In case he were asked

about Bush politicizing the CIA, Ford was to answer: "I believe that

Republicans and Democrats who know George Bush and have worked with him

know that he does not let politics and partisanship interfere with the

performance of public duty." That was a mouthful. "Nearly all of the men

and women in this and preceding administrations have had partisan

identities and have held partisan party posts.... George Bush is a part of

that American tradition and he will demonstrate this when he assumes his

new duties."

But when Ford, in an appearance on a Sunday talk show, was asked if he were

ready to exclude Bush as a possible vice-presidential candidate, he refused

to do so, answering, "I don't think people of talent ought to be excluded

from any field of public service." At a press conference, Ford said, "I

don't think he's eliminated from consideration by anybody, the delegates or

the convention or myself."


Confirmation Hearings

Bush's confirmation hearings got under way on December 15, 1975. Even

judged by Bush's standards of today, they constitute a landmark exercise in

sanctimonious hypocrisy so astounding as to defy comprehension.

Bush's sponsor was GOP Senator Strom Thurmond of South Carolina, the

ranking Republican on Senator John Stennis's Senate Armed Services

Committee. Thurmond unloaded a mawkish panegyric in favor of Bush: "I think

all of this shows an interest on your part in humanity, in civic

development, love of your country, and willingness to serve your fellow


Bush's opening statement was also in the main a tissue of banality and

cliches. He indicated his support for the Rockefeller Commission report

without having mastered its contents in detail. He pointed out that he had

attended cabinet meetings from 1971 to 1974, without mentioning who the

President was in those days. Everybody was waiting for this consummate

pontificator to get to the issue of whether he was going to attempt the

vice-presidency in 1976. Readers of Bush's propaganda biographies know that

he never decides on his own to run for office, but always responds to the

urging of his friends. Within those limits, his answer was that he was

available for the second spot on the ticket. More remarkably, he indicated

that he had a hereditary right to it -- it was, as he said, his


Would Bush accept a draft? "I cannot in all honesty tell you that I would

not accept, and I do not think, gentlemen, that any American should be

asked to say he would not accept, and to my knowledge, no one in the

history of this Republic has been asked to renounce his political

birthright as the price of confirmation for any office. And I can tell you

that I will not seek any office while I hold the job of CIA Director. I

will put politics wholly out of my sphere of activities." Even more, Bush

argued, his willingness to serve at the CIA reflected his sense of noblesse

oblige. Friends had asked him why he wanted to go to Langley at all, "with

all the controversy swirling around the CIA, with its obvious barriers to

political future?"

Magnanimously, Bush replied to his own rhetorical question: "My answer is

simple. First, the work is desperately important to the survival of this

country, and to the survival of freedom around the world. And second, old

fashioned as it may seem to some, it is my duty to serve my country. And I

did not seek this job but I want to do it and I will do my very best." /

Note #7

Stennis responded with a joke that sounds eerie in retrospect: "If I

thought that you were seeking the Vice Presidential nomination or

Presidential nomination by way of the route of being Director of the CIA, I

would question your judgment most severely." There was laughter in the

committee room.

Senators Barry Goldwater and Stuart Symington made clear that they would

give Bush a free ride not only out of deference to Ford, but also out of

regard for the late Prescott Bush, with whom they had both started out in

the Senate in 1952. Senator Thomas McIntyre was more demanding, and raised

the issue of enemies list operations, a notorious abuse of the Nixon (and

subsequent) administrations:

"What if you get a call from the President, next July or August, saying

'George, I would like to see you.' You go in the White House. He takes you

over in the corner and says, 'Look, things are not going too well in my

campaign. This Reagan is gaining on me all the time. Now, he is a movie

star of some renown and has traveled with the fast set. He was a Hollywood

star. I want you to get any dirt you can on this guy because I need it.'|"

What would Bush do? "I do not think that is difficult, sir," intoned Bush.

"I would simply say that it gets back to character and it gets back to

integrity; and furthermore, I cannot conceive of the incumbent doing that

sort of thing. But if I were put into that kind of position where you had a

clear moral issue, I would simply say 'no,' because you see I think, and

maybe -- I have the advantages as everyone on this committee of 20-20

hindsight, that this agency must stay in the foreign intelligence business

and must not harass American citizens, like in Operation Chaos, and that

these kinds of things have no business in the foreign intelligence

business." This was the same Bush whose 1980 campaign was heavily staffed

by CIA veterans, some retired, some on active service and in flagrant

violation of the Hatch Act. This is the Vice President who ran Iran-Contra

out of his own private office, and so forth.

Gary Hart also had a few questions. How did Bush feel about assassinations?

Bush "found them morally offensive and I am pleased the President has made

that position very, very clear to the Intelligence Committee...." How about

"coups d'etat in various countries around the world," Hart wanted to know.

"You mean in the covert field?" replied Bush. "Yes." "I would want to have

full benefit of all the intelligence. I would want to have full benefit of

how these matters were taking place but I cannot tell you, and I do not

think I should, that there would never be any support for a coup d'etat; in

other words, I cannot tell you I cannot conceive of a situation where I

would not support such action." In retrospect, this was a moment of

refreshing candor.

Gary Hart knew where at least one of Bush's bodies was buried:

Senator Hart: You raised the question of getting the CIA out of domestic

areas totally. Let us hypothesize a situation where a President has stepped

over the bounds. Let us say the FBI is investigating some people who are

involved, and they go right to the White House. There is some possible CIA

interest. The President calls you and says, I want you as Director of the

CIA to call the Director of the FBI to tell him to call off this operation

because it may jeopardize some CIA activities.

Mr. Bush: Well, generally speaking, and I think you are hypothecating a

case without spelling it out in enough detail to know if there is any real

legitimate foreign intelligence aspect....

There it was: the smoking gun tape again, the notorious

Bush-Liedtke-Mosbacher-Pennzoil contribution to the CREEP again, the money

that had been found in the pockets of Bernard Barker and the Plumbers after

the Watergate break-in. But Hart did not mention it overtly, only in this

oblique, Byzantine manner. Hart went on:

I am hypothesizing a case that actually happened in June 1972. There might

have been some tangential CIA interest in something in Mexico. Funds were

laundered and so forth.

Mr. Bush: Using a 50-50 hindsight on that case, I hope I would have said

the CIA is not going to get involved in that if we are talking about the

same one.

Senator Hart: We are.

Senator [Patrick] Leahy: Are there others?

Bush was on the edge of having his entire Watergate past come out in the

wash, but the liberal Democrats were already far too devoted to the

one-party state to grill Bush seriously. In a few seconds, responding to

another question from Hart, Bush was off the hook, droning on about

plausible deniability, of all things.

The next day, December 16, 1975, Church, appearing as a witness, delivered

his philippic against Bush. After citing evidence of widespread public

concern about the renewed intrusion of the CIA in domestic politics under

Bush, Church reviewed the situation: "So here we stand. Need we find or

look to higher places than the Presidency and the nominee himself to

confirm the fact that this door [of the Vice Presidency in 1976] is left

open and that he remains under active consideration for the ticket in 1976?

We stand in this position in the close wake of Watergate, and this

committee has before it a candidate for Director of the CIA, a man of

strong partisan political background and a beckoning political future.

"Under these circumstances I find the appointment astonishing. Now, as

never before, the Director of the CIA must be completely above political

suspicion. At the very least this committee, I believe, should insist that

the nominee disavow any place on the 1976 Presidential ticket.... Otherwise

his position as CIA Director would be hopelessly compromised.....

"If Ambassador Bush wants to be Director of the CIA, he should seek that

position. If he wants to be Vice President, then that ought to be his goal.

It is wrong for him to want both positions, even in a Bicentennial year."

It was an argument that conceded far too much to Bush in the effort to be

fair. Bush was incompetent for the post, and the argument should have ended

there. Church's unwillingness to demand the unqualified rejection of such a

nominee no matter what future goodies he was willing temporarily to

renounce has cast long shadows over subsequent American history. But even

so, Bush was in trouble.

Church was at his ironic best when he compared Bush to a recent chairman of

the Democratic National Committee: "... [I]f a Democrat were President, Mr.

Larry O'Brien ought not to be nominated to be Director of the CIA. Of all

times to do it, this is the worst, right at a time when it is obvious that

public confidence needs to be restored in the professional, impartial, and

nonpolitical character of the agency. So, we have the worst of all possible

worlds." Church tellingly underlined that "Bush's birthright does not

include being Director of the CIA. It includes the right to run for public

office, to be sure, but that is quite a different matter than confirming

him now for this particular position."

Church said he would under no circumstance vote for Bush, but that if the

latter renounced the '76 ticket, he would refrain from attempting to

canvass other votes against Bush. It was an ambiguous position.

Bush came back to the witness chair in an unmistakably whining mood. He was

offended above all by the comparison of his august self to the upstart

Larry O'Brien: "I think there is some difference in the qualifications,"

said Bush in a hyperthyroid rage. "Larry O'Brien did not serve in the

Congress of the United States for four years. Larry O'Brien did not serve,

with no partisanship, at the United Nations for two years. Larry O'Brien

did not serve as the Chief of the U.S. Liaison Office in the People's

Republic of China." Not only Bush but his whole "cursus honorum" was

insulted! "I will never apologize," said Bush a few seconds later,

referring to his own record. Then Bush pulled out his "you must resign"

letter to Nixon: "Now, I submit that for the record that that is

demonstrable independence. I did not do it by calling the newspapers and

saying, 'Look, I am having a press conference. Here is a sensational

statement to make me, to separate me from a President in great agony.'|"


The Ford Letter

Bush had been savaged in the hearings, and his nomination was now in grave

danger of being rejected by the committee, and then by the full Senate.

Later in the afternoon of November 16, a damage control party met at the

White House to assess the situation for Ford. / Note #8 According to

Patrick O'Donnell of Ford's Congressional Relations Office, the most Bush

could hope for was a bare majority of 9 out of 16 votes on the Stennis


Ford was inclined to give the senators what they wanted, and exclude Bush

"a priori" from the vice-presidential contest. When Ford called George over

to the Oval Office on December 18, he already had the text of a letter to

Stennis announcing that Bush was summarily ruled off the ticket if Ford

were the candidate (which was anything but certain). Ford showed Bush the

letter. We do not know what whining may have been heard in the White House

that day from a senatorial patrician deprived (for the moment) of his

birthright. Ford could not yield; it would have thrown his entire election

campaign into acute embarrassment just as he was trying to get it off the

ground. When George saw that Ford was obdurate, heproposed that the letter

be amended to make it look as if the initiative to rule him out as a

running mate had originated with Bush. The fateful letter read:

Dear Mr. Chairman:

As we both know, the nation must have a strong and effective foreign

intelligence capability. Just over two weeks ago, on December 7 while in

Pearl Harbor, I said that we must never drop our guard nor unilaterally

dismantle our defenses. The Central Intelligence Agency is essential to

maintaining our national security.

I nominated Ambassador George Bush to be CIA Director so we can now get on

with appropriate decisions concerning the intelligence community. I need --

and the nation needs -- his leadership at CIA as we rebuild and strengthen

the foreign intelligence community in a manner which earns the confidence

of the American people.

Ambassador Bush and I agree that the Nation's immediate foreign

intelligence needs must take precedence over other considerations and there

should be continuity in his CIA leadership. Therefore, if Ambassador Bush

is confirmed by the Senate as Director of Central Intelligence, I will not

consider him as my Vice Presidential running mate in 1976.

He and I have discussed this in detail. In fact, he urged that I make this

decision. This says something about the man and about his desire to do this

job for the nation....

On December 19, this letter was received by Stennis, who announced its

contents to his committee. The committee promptly approved the Bush

appointment by a vote of 12 to 4, with Gary Hart, Leahy, Culver and

McIntyre voting against him. Bush's name could now be sent to the floor,

where a recrudescence of anti-Bush sentiment was not likely, but could not

be ruled out.

Then, two days before Christmas, the CIA chief in Athens, Richard Welch,

was gunned down in front of his home by masked assassins as he returned

home with his wife from a Christmas party. A group calling itself the

"November 19 Organization" later claimed credit for the killing.

Certain networks immediately began to use the Welch assassination as a

bludgeon against the Church and Pike Committees. An example came from

columnist Charles Bartlett, writing in the now-defunct "Washington Star":

"The assassination of the CIA Station Chief, Richard Welch, in Athens is a

direct consequence of the stagy hearings of the Church Committee. Spies

traditionally function in a gray world of immunity from such crudities. But

the Committee's prolonged focus on CIA activities in Greece left agents

there exposed to random vengeance." / Note #9 Staffers of the Church

Committee point ed out that the Church Committee had never said a word

about Greece or mentioned the name of Welch.

CIA Director Colby first blamed the death of Welch on "Counterspy"

magazine, which had published the name of Welch some months before. The

next day, Colby backed off, blaming a more general climate of hysteria

regarding the CIA which had led to the assassination of Richard Welch. In

his book, "Honorable Men", published some years later, Colby continued to

attribute the killing to the "sensational and hysterical way the CIA

investigations had been handled and trumpeted around the world."

The Ford White House resolved to exploit this tragic incident to the limit.

Liberals raised a hue and cry in response. Les Aspin later recalled that

"the air transport plane carrying [Welch's] body circled Andrews Air Force

Base for three-quarters of an hour in order to land live on the "Today

Show."" Ford waived restrictions in order to allow interment at Arlington

Cemetery. The funeral on January 7 was described by the "Washington Post"

as "a show of pomp usually reserved for the nation's most renowned military

heroes." Anthony Lewis of the "New York Times" described the funeral as "a

political device" with ceremonies "being manipulated in order to arouse a

political backlash against legitimate criticism." Norman Kempster in the

"Washington Star" found that "only a few hours after the CIA's Athens

station chief was gunned down in front of his home, the agency began a

subtle campaign intended to persuade Americans that his death was the

indirect result of congressional investigations and the direct result of an

article in an obscure magazine." Here, in the words of a "Washington Star"

headline, was "one CIA effort that worked."


Bush and the ADL

Between Christmas and New Year's in Kennebunkport, looking forward to the

decisive floor vote on his confirmation, Bush was at work tending and

mobilizing key parts of his network. One of these was a certain Leo Cherne.

Leo Cherne is not a household word, but he has been a powerful figure in

the U.S. intelligence community over the period since World War II. Leo

Cherne was to be one of Bush's most important allies when he was CIA

Director and throughout Bush's subsequent career.

Cherne has been a part of B'nai B'rith all his life. He was (and still is)

an ardent Zionist. He is typical to that extent of the so-called

"neoconservatives" who have been prominent in government and policy circles

under Reagan-Bush, and Bush. Cherne was the founder of the International

Rescue Committee (IRC), a conduit for neo-Bukharinite operations between

East and West in the Cold War, and it was also reputedly a CIA front


Cherne was a close friend of William Casey, who was working in the Nixon

administration as undersecretary of state for economic affairs in mid-1973.

That was when Cherne was named to the President's Foreign Intelligence

Advisory Board (PFIAB) by Nixon. On March 15, 1976, Cherne became the

chairman of this body, which specializes in conduiting the demands of

financier and related interests into the intelligence community. Cherne, as

we will see, would be, along with Bush, a leading beneficiary of Ford's

spring 1976 intelligence reorganization.

Bush's correspondence with Cherne leaves no doubt that theirs was a very

special relationship. Cherne represented for Bush a strengthening of his

links to the Zionist-neoconservative milieu, with options for

backchanneling into the Soviet bloc. Bush wrote to Cherne: "I read your

testimony with keen interest and appreciation. I am really looking forward

to meeting you and working with you in connection with your PFIAB chores.

Have a wonderful 1976," Bush wrote.

January 1976 was not auspicious for Bush. He had to wait until almost the

end of the month for his confirmation vote, hanging there, slowly twisting

in the wind. In the meantime, the Pike Committee report was approaching

completion, after months of probing and haggling, and was sent to the

Government Printing Office on January 23, despite continuing arguments from

the White House and from the GOP that the committee could not reveal

confidential and secret material provided by the executive branch. On

Sunday, January 25, a copy of the report was leaked to Daniel Schorr of CBS

News, and was exhibited on television that evening. The following morning,

the "New York Times" published an extensive summary of the entire Pike

Committee report.

Despite all this exposure, the House voted on January 29 that the Pike

Committee report could not be released. A few days later, it was published

in full in the "Village Voice", and CBS correspondent Daniel Schorr was

held responsible for its appearance. The Pike Committee report attacked

Henry Kissinger, "whose comments," it said, "are at variance with the

facts." In the midst of his imperial regency over the United States, an

unamused Kissinger responded that "we are facing a new version of

McCarthyism." A few days later, Kissinger said of the Pike Committee: "I

think they have used classified information in a reckless way, and the

version of covert operations they have leaked to the press has the

cumulative effect of being totally untrue and damaging to the nation." /

Note #1 / Note #0

Thus, as Bush's confirmation vote approached, the Ford White House, on the

one hand, and the Pike and Church Committees on the other, were close to

"open political warfare," as the "Washington Post" put it at the time. One

explanation of the leaking of the Pike report was offered by Otis Pike

himself on February 11: "A copy was sent to the CIA. It would be to their

advantage to leak it for publication." By now, Ford was raving about

mobilizing the FBI to find out how the report had been leaked.

On January 19, George Bush was present in the Executive Gallery of the

House of Representatives, seated close to the unfortunate Betty Ford, for

the President's State of the Union Address. This was a photo opportunity so

that Ford's CIA candidate could get on television for a cameo appearance

that might boost his standing on the eve of confirmation.


Confirmed, at Last

Senate floor debate was underway on January 26, and Senator McIntyre lashed

out at the Bush nomination as "an insensitive affront to the American


In further debate on the day of the vote, January 27, Senator Joseph Biden

joined other Democrats in assailing Bush as "the wrong appointment for the

wrong job at the wrong time." Church appealed to the Senate to reject Bush,

a man "too deeply embroiled in partisan politics and too intertwined with

the political destiny of the President himself" to be able to lead the CIA.

Goldwater, Tower, Percy, Howard Baker and Clifford Case all spoke up for

Bush. Bush's floor leader was Strom Thurmond, who supported Bush by

attacking the Church and Pike Committees.

Finally it came to a roll call and Bush passed by a vote of 64-27, with

Lowell Weicker of Connecticut voting present. Church's staff felt they had

failed lamentably, having gotten only liberal Democrats and the single

Republican vote of Jesse Helms. / Note #1 / Note #1

It was the day after Bush's confirmation that the House Rules Committee

voted 9 to 7 to block the publication of the Pike Committee report. The

issue then went to the full House on January 29, which voted, 146 to 124,

that the Pike Committee must submit its report to censorship by the White

House and thus by the CIA. At almost the same time, Senator Howard Baker

joined Tower and Goldwater in opposing the principal final recommendation

of the Church Committee, such as it was -- the establishment of a permanent

intelligence oversight committee.

Pike found that the attempt to censor his report had made "a complete

travesty of the whole doctrine of separation of powers." In the view of a

staffer of the Church Committee, "all within two days, the House

Intelligence Committee had ground to a halt, and the Senate Intelligence

Committee had split asunder over the centerpiece of its recommendations.

The White House must have rejoiced; the Welch death and leaks from the Pike

Committee report had produced, at last, a backlash against the

congressional inv estigations." / Note #1 / Note #2

Riding the crest of that wave of backlash was George Bush. The

constellation of events around his confirmation prefigures the wretched

state of Congress today: a rubber stamp parliament in a totalitarian state,

incapable of overriding even one of Bush's 22 vetoes.

On Friday, January 30, Ford and Bush were joined at the CIA auditorium for

Bush's swearing-in ceremony before a large gathering of agency employees.

Colby was also there: Some said he had been fired primarily because

Kissinger thought that he was divulging too much to the congressional

committees, but Kissinger later told Colby that the latter's stratagems had

been correct.

Colby opened the ceremony with a few brief words: "Mr. President, and Mr.

Bush, I have the great honor to present you to an organization of dedicated

professionals. Despite the turmoil and tumult of the last year, they

continue to produce the best intelligence in the world." This was met by a

burst of applause. / Note #1 / Note #3 Ford's line was: "We cannot improve

this agency by destroying it." Bush promised to make the "CIA an instrument

of peace and an object of pride for all our people."


Notes for Chapter 16

1. Nathan Miller, "Spying for America" (New York: Paragon House, 1989), p. 399.

2. Gerald R. Ford Library, Richard B. Cheney Files, Box 5.

3. See Loch K. Johnson, "A Season of Inquiry: The Senate Intelligence

Investigation" (University Press of Kentucky, 1985), pp. 108-9.

4. "Ibid.", pp. 115-16.

5. Nedzi to Ford, Dec. 12, 1975, Ford Library, John O. Marsh Files, Box 1.

6. "Ibid."

7. U.S. Senate, Committee on Armed Services, Nomination of George Bush to

be Director of Central Intelligence, Dec. 15-16, 1975, p. 10.

8. Memo of Dec. 16, 1975 from O'Donnell to Marsh through Friedersdorf on

the likely vote in the Stennis Senate Armed Services Committee. Ford

Library, William T. Kendall Files, Box 7.

9. For an account of the exploitation of the Welch incident by the Ford

administration, see Johnson, "op. cit.", pp. 161-62.

10. For an account of the leaking of the Pike Committee Report and the

situation in late Jan. and Feb. 1976, see Daniel Schorr, "Clearing the Air"

(Boston: Houghton Mifflin, 1977) especially pp. 179-207, and Johnson, "op.

cit.", pp. 172-91.

11. Johnson, "op. cit.", p. 180.

12. "Ibid.", p. 182.

13. Thomas Powers, "The Man Who Kept the Secrets: Richard Helms and the

CIA" (New York: Knopf, 1979), p. 12.

When Bush became director of Central Intelligence (DCI), the incumbent

principal deputy director was Gen. Vernon Walters, a former Army lieutenant

general. This is the same Gen. Vernon Walters who was mentioned by Haldeman

and Nixon in the notorious "smoking gun" tape already discussed, but who of

course denied that he ever did any of the things that Haldeman and

Ehrlichman said that he had promised to do. Walters had been at the CIA

since May 1972 -- a Nixon appointee who had been with Nixon when the

then-Vice President's car was stoned in Caracas, Venezuela. Ever since

then, Nixon had seen him as part of the old guard. Walters left to become a

private consultant in July 1976.

To replace Walters, Bush picked Enno Henry Knoche, who had joined the CIA

in 1953 as an intelligence analyst specializing in Far Eastern political

and military affairs. Knoche came from the Navy and knew Chinese. From 1962

to 1967, he had been the chief of the National Photographic Interpretation

Center. In 1969, he had become deputy director of planning and budgeting,

and chaired the internal CIA committee in charge of computerization. Next,

Knoche was deputy director of the Office of Current Intelligence, which

produces ongoing assessments of international events for the President and

the National Security Council. After 1972, Knoche headed the Intelligence

Directorate's Office of Strategic Research, charged with evaluating

strategic threats to the U.S. In 1975, Knoche had been a special liaison

between Colby and the Rockefeller Commission, as well as with the Church

and Pike Committees. This was a very sensitive post, and Bush clearly

looked to Knoche to help him deal with continuing challenges coming from

the Congress. In the fall of 1975, Knoche had become number two on Colby's

staff for the coordination and management of the intelligence community.

According to some, Knoche was to function as Bush's "Indian guide" through

the secrets of Langley; he knew "where the bodies were buried."

Knoche was highly critical of Colby's policy of handing over limited

amounts of classified material to the Pike and Church committees, while

fighting to save the core of covert operations. Knoche told a group of

friends during this period: "There is no counterintelligence any more."

This implies a condemnation of the congressional committees with whom

Knoche had served as liaison, and can also be read as a lament for the

ousting of James Jesus Angleton, chief of the CIA's counterintelligence

operations until 1975 and director of the mail-opening operation that had

been exposed by various probers. / Note #1 / Note #4

Adm. Daniel J. Murphy was Bush's deputy director for the intelligence

community, and later became Bush's chief of staff during his first term as

vice president. Much later, in November 1987, Murphy visited Panama in the

company of South Korean businessman and intelligence operative Tongsun

Park, and met with Gen. Manuel Antonio Noriega. Murphy was later obliged to

testify to the Senate Foreign Relations Committee about his meeting with

Noriega. Murphy claimed that he was only in Panama to "make a buck," but

there are indications that he was carrying messages to Noriega from Bush.

Tongsun Park, Murphy's ostensible business associate, will soon turn out to

have been the central figure of the Koreagate scandal of 1976, a very

important development on Bush's CIA watch. / Note #1 / Note #5

Other names on the Bush flow chart included holdover Edward Proctor,

followed by Bush appointee Sayre Stevens in the slot of deputy director for

intelligence; holdover Carl Duckett, followed by Bush appointee Leslie

Dirks as deputy director for science and technology; John Blake, holdover

as deputy director for administration; and holdover William Nelson,

followed by Bush appointee William Wells, deputy director for operations.

William Wells as deputy director for operations was a very significant

choice. He was a career covert operations specialist who had graduated from

Yale a few years before Bush. Wells soon acquired his own deputy,

recommended by him and approved by Bush: This was the infamous Theodore

Shackley, whose title thus became associate deputy director for covert

operations. Shackley later emerged as one of the central figures of the

Iran-Contra scandal of the 1980s. He is reputedly one of the dominant

personalities of a CIA old boys' network known as The Enterprise, which was

at the heart of Iran-Contra and the other illegal covert operations of the

Reagan-Bush years.

During the early 1960s, after the Bay of Pigs, Theodore Shackley had been

the head of the CIA Miami Station during the years in which Operation

Mongoose was at its peak. This was the E. Howard Hunt and Watergate Cubans

crowd, circles familiar to Felix Rodriguez (Max Gomez), who in the 1980s

ran Contra gun-running and drug-running out of Bush's vice-presidential


Later, Shackley was reportedly the chief of the CIA station in Vientiane,

Laos, between July 1966 and December 1968. Some time after that, he moved

on to become the CIA station chief in Saigon, where he directed the

implementation of the Civilian Operations and Rural Development Support

(CORDS) program, better known as Operation Phoenix, a genocidal crime

against humanity which killed tens of thousands of Vietnamese civilians

because they were suspected of working for the Vietcong, or sometimes

simply because they were able to read and write. As for Shackley, there are

also reports that he worked for a time in the late 1960s in Rome, during

the period when the CIA's GLADIO capabilities were being used to launch a

wave of terrorism in that country that went on for well over a decade. Such

was the man whom Bush chose to appoint to a position of responsibility in

the CIA. Later, Shackley will turn up as a "speechwriter" for Bush during

the 1979-80 campaign.

Along with Shackley came his associate and former Miami Station second in

command, Thomas Clines, a partner of Gen. Richard Secord and Albert Hakim

during the Iran-Contra operation, convicted in September 1990 on four

felony tax counts for not reporting his ill-gotten gains, and sentenced to

16 months in prison and a fine of $40,000.

Another career covert operations man, John Waller, became the inspector

general, the officer who was supposed to keep track of illegal operations.

For legal advice, Bush turned first to holdover General Counsel Mitchell

Rogovin, who had in December 1975 theorized that intelligence activities

belonged to the "inherent powers" of the presidency, and that no special

congressional legislation was required to permit such things as covert

operations to go on. Later, Bush appointed Anthony Lapham, Yale '58, as CIA

general counsel. Lapham was the scion of an old San Francisco banking

family, and his brother was Lewis Lapham, the editor of "Harper's"

magazine. Lapham would take a leading role in the CIA coverup of the

Letelier assassination case. / Note #1 / Note #6

Typical of the broad section of CIA officers who were delighted with their

new boss from Brown Brothers Harriman/Skull and Bones was Cord Meyer, who

had most recently been the station chief in London from 1973 on, a wild and

woolly time in the tight little island, as we will see. Meyer, a covert

action veteran and Watergate operative, writes at length in his

autobiography about his enthusiasm for the Bush regime at CIA, which

induced him to prolong his own career there. / Note #1 / Note #7

And what did other CIA officers, such as intelligence analysts, think of

Bush? A common impression is that he was a superficial lightweight with no

serious interest in intelligence. Deputy Director for Science and

Technology Carl Duckett, who was ousted by Bush after three months,

commented that he "never saw George Bush feel he had to understand the

depth of something.... [He] is not a man tremendously dedicated to a cause

or ideas. He's not fervent. He goes with the flow, looking for how it will

play politically." According to Maurice Ernst, the head of the CIA's Office

of Economic Research from 1970 to 1980, "George Bush doesn't like to get

into the middle of an intellectual debate .. he liked to delegate it. I

never really had a serious discussion with him on economics." Hans Heymann

was Bush's national intelligence officer for economics, and he remembers

having been impressed by Bush's Phi Beta Kappa Yale degree in economics. As

Heymann later recalled Bush's response, "He looked at me in horror and

said, 'I don't remember a thing. It was so long ago, so I'm going to have

to rely on you.'|" / Note #1 / Note #8


Intelligence Czar

During the first few weeks of Bush's tenure, the Ford administration was

gripped by a "first strike" psychosis. This had nothing to do with the

Soviet Union, but was rather Ford's desire to preempt any proposals for

reform of the intelligence agencies coming out of the Pike or Church

Committees with a pseudo-reform of his own, premised on his own in-house

study, the Rockefeller report, which recommended an increase of secrecy for

covert operations and classified information. Since about the time of the

Bush nomination, an interagency task force armed with the Rockefeller

Commission recommendations had been meeting under the chairmanship of

Ford's counselor Jack O. Marsh. This was the Intelligence Coordinating

Group, which included delegates of the intelligence agencies, plus NSC,

Office of Management and the Budget (OMB), and others. This group worked up

a series of final recommendations that were given to Ford to study on his

Christmas vacation in Vail, Colorado. At this point, Ford was inclined to

"go slow and work with Congress."

But on January 10, Marsh and the intelligence agency bosses met again with

Ford, and the strategy began to shift toward preempting Congress. On

January 30, Ford and Bush came back from their appearance at the CIA

auditorium swearing-in session and met with other officials in the Cabinet

Room. Attending besides Ford and Bush were Secretary of State Kissinger,

Secretary of Defense Donald Rumsfeld, Attorney General Edward Levi, Jack

Marsh, Philip Buchen, Brent Scowcroft, Mike Duval, and Peter Wallison

representing Vice President Rockefeller, who was out of town that day. /

Note #1 / Note #9 Here Ford presented his tentative conclusions for further

discussion. The general line was to preempt the Congress, not to cooperate

with it, to increase secrecy, and to increase authoritarian tendencies.

Ford scheduled a White House press conference for the evening of February 17.

In his press conference of February 17, Ford scooped the Congress and

touted his bureaucratic reshuffle of the intelligence agencies as the most

sweeping reform and reorganization of the United States' intelligence

agencies since the passage of the National Security Act of 1947. "I will

not be a party to the dismantling of the CIA or other intelligence

agencies," he intoned. He repeated that the intelligence community had to

function under the direction of the National Security Council, as if that

were something earth-shaking and new; from the perspective of Oliver North

and Admiral Poindexter we can see in retrospect that it guaranteed nothing.

A new NSC committee chaired by Bush was entrusted with the task of giving

greater central coordination to the intelligence community as a whole. This

committee was to consist of Bush, Kissinger clone William Hyland of the

National Security Council staff, and Robert Ellsworth, the assistant

secretary of defense for intelligence. This committee was jointly to

formulate the budget of the intelligence community and allocate its

resources to the various tasks.

The 40 Committee, which had overseen covert operations, was now to be

called the Operations Advisory Group, with its membership reshuffled to

include Scowcroft of NSC, Kissinger, Rumsfeld, Chairman of the Joint Chiefs

of Staff George Brown, plus observers from the attorney general and OMB.

An innovation was the creation of the Intelligence Oversight Board (in

addition to the President's Foreign Intelligence Advisory Board), which was

chaired by Ambassador Robert D. Murphy, the old adversary of Charles de

Gaulle during World War II. The IOB was supposed to be a watchdog to

prevent new abuses from coming out of the intelligence community. Also on

this board were Stephen Ailes, who had been undersecretary of defense for

Kennedy and secretary of the Army for LBJ. The third figure on this IOB was

Leo Cherne, who was soon to be promoted to chairman of PFIAB as well. The

increasingly complicit relationship of Cherne to Bush meant that all

alleged oversight by the IOB was a mockery.

Ford also wanted a version of the Official Secrets Act, which we have seen

Bush supporting: He called for "special legislation to guard critical

intelligence secrets. This legislation would make it a crime for a

government employee who has access to certain highly classified information

to reveal that information improperly" -- which would have made the

Washington leak game rather more dicey than it is at present.

The Official Secrets Act would have to be passed by Congress, but most of

the rest of what Ford announced was embodied in Executive Order 11905.

Church thought that this was overreaching, since it amounted to changing

some provisions of the National Security Act by presidential fiat. But this

was now the new temper of the times.

As for the CIA, Executive Order 11905 authorized it "to conduct foreign

counterintelligence activities .. in the United States," which opened the

door to many things. Apart from restrictions on physical searches and

electronic bugging, it was still open season on Americans abroad. The FBI

was promised the Levi guidelines, and other agencies would get charters

written for them. In the interim, the power of the FBI to combat various

"subversive" activities was reaffirmed. Political assassination was ban

ned, but there were no limitations or regulations placed on covert

operations, and there was nothing about measures to improve the

intelligence and analytical product of the agencies.

In the view of the "New York Times", the big winner was Bush: "From a

management point of view, Mr. Ford tonight centralized more power in the

hands of the director of Central Intelligence than any had had since the

creation of the CIA. The director has always been the nominal head of the

intelligence community, but in fact has had little power over the other

agencies, particularly the Department of Defense." Bush was now de facto

intelligence czar. / Note #2 / Note #0

Congressman Pike said that Ford's reorganization was bent "largely on

preserving all of the secrets in the executive branch and very little on

guaranteeing a lack of any further abuses." Church commented that what Ford

was really after was "to give the CIA a bigger shield and a longer sword

with which to stab about."

The Bush-Kissinger-Ford counteroffensive against the congressional

committees went forward. On March 5, the CIA leaked the story that the Pike

Committee had lost more than 232 secret documents which had been turned

over from the files of the executive branch. Pike said that this was

another classic CIA provocation designed to discredit his committee, which

had ceased its activity. Bush denied that he had engineered the leak.

By September, Bush could boast in public that he had won the immediate

engagement: His adversaries in the congressional investigating committees

were defeated. "The CIA," Bush announced, "has weathered the storm.... The

mood in Congress has changed," he crowed. "No one is campaigning against

strong intelligence. The adversary thing, how we can ferret out corruption,

has given way to the more serious question how we can have better


Such was the public profile of Bush's CIA tenure up until about the time of

the November 1976 elections. If this had been the whole story, then we

might accept the usual talk about Bush's period of uneventful rebuilding

and morale boosting while he was at Langley.


Bush's Real Agenda

Reality was different. The administration Bush served had Ford as its

titular head, but most of the real power, especially in foreign affairs,

was in the hands of Kissinger. Bush was more than willing to play along

with the Kissinger agenda.

The first priority was to put an end to such episodes as contempt citations

for Henry Kissinger. Thanks to the presence of Don Gregg as CIA station

chief in Seoul, South Korea, that was easy to arrange. This was the same

Don Gregg of the CIA who would later serve as Bush's national security

adviser during the second vice-presidential term, and who would manage

decisive parts of the Iran-Contra operations from Bush's own office. Gregg

knew of an agent of the Korean CIA, Tongsun Park, who had for a number of

years been making large payments to members of Congress, above all to

Democratic members of the House of Representatives, in order to secure

their support for legislation that was of interest to Park Chung Hee, the

South Korean leader. It was therefore a simple matter to blow the lid off

this story, causing a wave of hysteria among the literally hundreds of

members of Congress who had attended parties organized by Tongsun Park.

The Koreagate headlines began to appear a few days after Bush had taken

over at Langley. In February, there was a story by Maxine Cheshire of the

"Washington Post" reporting that the Department of Justice was

investigating Congressmen Bob Leggett and Joseph Addabbo for allegedly

accepting bribes from the Korean government. Both men were linked to Suzi

Park Thomson, who had been hosting parties of the Korean embassy. Later, it

turned out that Speaker of the House Carl Albert had kept Suzi Park Thomson

on his payroll for all of the six years that he had been speaker. The "New

York Times" estimated that as many as 115 Congressmen were involved.

In reality the number was much lower, but former Watergate Special

Prosecutor Leon Jaworski was brought back from Houston to become special

prosecutor for this case as well. This underlined the press line that "the

Democrats' Watergate" had finally arrived. It was embarrassing to the Bush

CIA when Tongsun Park's official agency file disappeared for several

months, and finally turned up shorn of key information on the CIA officers

who had been working most closely with Park.

With "Koreagate," the Congress was terrorized and brought to heel. In this

atmosphere, Bush moved to reach a secret foreign policy consensus with key

congressional leaders of both parties of the one-party state. According to

two senior government officials involved, limited covert operations in such

places as Angola were continued under the pretext that they were necessary

for phasing out the earlier, larger, and more expensive operations. Bush's

secret deal was especially successful with the post-Church Senate

Intelligence Committee. Because of the climate of restoration that

prevailed, a number of Democrats on this committee concluded that they must

break off their aggressive inquiries and make peace with Bush, according to

reports of remarks by two senior members of the committee staff. The result

was an interregnum during which the Senate committee would neither set

specific reporting requirements, nor attempt to pass any binding

legislation to restrict CIA covert and related activity. In return, Bush

would pretend to make a few disclosures to create a veneer of cooperation.

/ Note #2 / Note #1


The Letelier Affair

One of the most spectacular scandals of Bush's tenure at the CIA was the

assassination in Washington, D.C. of Orlando Letelier, the Chilean exile

leader. Letelier had been a minister in the Allende government, which had

been overthrown by Kissinger in 1973. Letelier, along with Ronnie Moffitt

of the Washington Institute for Policy Studies, died on September 21, 1976

in the explosion of a car bomb on Sheridan Circle, in the heart of

Washington's Embassy Row district along Massachusetts Avenue.

Relatively few cases of international terrorism have taken place on the

territory of the United States, but this was certainly an exception. Bush's

activities before and after this assassination amount to one of the most

bizarre episodes in the annals of secret intelligence operations.

One of the assassins of Letelier was unquestionably one Michael Vernon

Townley, a CIA agent who had worked for David Atlee Phillips in Chile.

Phillips had become the director of the CIA's Western Hemisphere operations

after the overthrow of Allende and the advent of the dictatorship of

Augusto Pinochet Ugarte, and its Milton Friedman/Chicago School economic

policies. In 1975, Phillips founded AFIO, the Association of Former

Intelligence Officers, which has supported George Bush in every campaign he

has ever waged since that time. Townley, as a "former" CIA agent, had gone

to work for the DINA, the Chilean secret police, and had been assigned by

the DINA as its liaison man with a group called CORU. CORU was the acronym

for Command of United Revolutionary Organizations, a united front of four

anti-Castro Cuban organizations based primarily in the neighborhood of

Miami called Little Havana. With CORU, we are back in the milieu of Miami

anti-Castro Cubans, whose political godfather George Bush had been since

very early in the 1960s.

It was under these circumstances that the U.S. ambassador to Chile, George

Landau, sent a cable to the State Department with the singular request that

two agents of the DINA be allowed to enter the United States with

Paraguayan passports. One of these agents is likely to have been Townley.

The cable also indicated that the two DINA agents also wanted to meet with

Gen. Vernon Walters, the outgoing deputy director of central intelligence,

and so the cable also went to Langley. Here, the cable was read by Walters,

and also passed into the hands of Director George Bush. Bush not only had

this cable in his hands; Bush and Walters discussed the contents of the

cable and what to do about it, including whether Walters ought to meet with

th e DINA agents. The cable also reached the desk of Henry Kissinger. One

of Landau's questions appears to have been whether the mission of the DINA

men had been approved in advance by Langley; his cable was accompanied by

photocopies of the Paraguayan passports. (Later on, in 1980, Bush denied

that he had ever seen this cable; he had not just been out of the loop, he

claims; he had been in China.) The red Studebaker hacks, including Bush

himself in his campaign autobiography, do not bother denying anything about

the Letelier case; they simply omit it. / Note #2 / Note #2

On August 4, on the basis of the conversations between Bush and Vernon

Walters, the CIA sent a reply from Walters to Landau, stating that the

former "was unaware of the visit and that his Agency did not desire to have

any contact with the Chileans." Ambassador Landau responded by revoking the

visas that he had already granted and telling the Immigration and

Naturalization Service to put the two DINA men on their watch list to be

picked up if they tried to enter the United States. The two DINA men

entered the United States anyway on August 22, with no apparent difficulty.

The DINA men reached Washington, and it is clear that they were hardly

traveling incognito: They appear to have asked a Chilean embassy official

to call the CIA to repeat their request for a meeting.

According to other reports, the DINA men met with New York Senator James

Buckley, the brother of conservative columnist William Buckley of Skull and

Bones. It is also said that the DINA men met with Frank Terpil, a close

associate of Ed Wilson, and no stranger to the operations of the

Shackley-Clines Enterprise. According to one such version, "Townley met

with Frank Terpil one week before the Letelier murder, on the same day that

he met with Senator James Buckley and aides in New York City. The

explosives sent to the United States on Chilean airlines were to replace

explosives supplied by Edwin Wilson, according to a source close to the

office of Assistant U.S. Attorney Lawrence Barcella." / Note #2 / Note #3

The bomb that killed Letelier and Moffitt was of the same type that the FBI

believed that Ed Wilson was selling, with the same timer mechanism.

Bush therefore had plenty of warning that a DINA operation was about to

take place in Washington, and it was no secret that it would be wetwork. As

authors John Dinges and Saul Landau point out, when the DINA hitmen arrived

in Washington they "alerted the CIA by having a Chilean embassy employee

call General Walters' office at the CIA's Langley headquarters. It is quite

beyond belief that the CIA is so lax in its counterespionage functions that

it would simply have ignored a clandestine operation by a foreign

intelligence service in Washington, D.C., or anywhere in the United States.

It is equally implausible that Bush, Walters, [Ambassador George] Landau

and other officials were unaware of the chain of international

assassinations that had been attributed to DINA." / Note #2 / Note #4

Bush's complicity deepens when we turn to the post-assassination coverup.

The prosecutor in the Letelier-Moffitt murders was Assistant U.S. Attorney

Eugene M. Propper. Nine days after the assassinations, Propper was trying

without success to get some cooperation from the CIA, since it was obvious

enough to anyone that the Chilean regime was the prime suspect in the

killing of one of its most prominent political opponents. The CIA had been

crudely stonewalling Propper. He had even been unable to secure the

requisite security clearance to see documents in the case. Then Propper

received a telephone call from Stanley Pottinger, assistant attorney

general in charge of the Civil Rights Division of the Justice Department.

Pottinger said that he had been in contact with members of the Institute

for Policy Studies, who had argued that the Civil Rights Division ought to

take over the Letelier case because of its clear political implications.

Propper argued that he should keep control of the case since the Protection

of Foreign Officials Act gave him jurisdiction. Pottinger agreed that

Propper was right, and that he ought to keep the case. When Pottinger

offered to be of help in any possible way, Propper asked if Pottinger could

expedite cooperation with the CIA.

As Propper later recounted this conversation: "Instant, warm confidence

shot through the telephone line. The assistant attorney general replied

that he happened to be a personal friend of the CIA Director himself,

George Bush. Pottinger called him 'George.' For him, the CIA Director was

only a phone call away. Would Propper like an appointment? By that

afternoon he [an FBI agent working on the case] and Pottinger were

scheduled for lunch with Director Bush at CIA headquarters on Monday. A

Justice Department limousine would pick them up at noon. Propper whistled

to himself. This was known in Washington as access." / Note #2 / Note #5

At CIA headquarters, Pottinger introduced Propper to Director Bush, and

Bush introduced the two lawyers to Tony Lapham, his general counsel. There

was some polite conversation. Then, "when finally called on to state his

business, Propper said that the Letelier-Moffitt murders were more than

likely political assassinations, and that the investigation would probably

move outside the United States into the Agency's realm of foreign

intelligence. Therefore, Propper wanted CIA cooperation in the form of

reports from within Chile, reports on assassins, reports on foreign

operatives entering the United States, and the like. He wanted anything he

could get that might bear upon the murders."

If Bush had wanted to be candid, he could have informed Propper that he had

been informed of the coming of the DINA team twice, once before they left

South America and once when they had arrived in Washington. But Bush never

volunteered this highly pertinent information. Instead, he went into a

sophisticated stonewall routine: "|'Look,' said Bush, 'I'm appalled by the

bombing. Obviously we can't allow people to come right here into the

capital and kill foreign diplomats and American citizens like this. It

would be a hideous precedent. So, as director, I want to help you. As an

American citizen, I want to help. But, as director, I also know that the

Agency can't help in a lot of situations like this. We've got some

problems. Tony, tell him what they are.'|"

Lapham launched into a consummate Aristotelian obfuscation, recounted in

Lapham and Propper's "Labyrinth". Lapham and Propper finally agreed that

they could handle the matter best through an exchange of letters between

the CIA Director and Attorney General Levi. George Bush summed up: "If you

two come up with something that Tony thinks will protect us, we'll be all

right." The date was October 4, 1976.

Contrary to that pledge, Bush and the CIA began actively to sabotage

Propper's investigation in public as well as behind the scenes. By

Saturday, the "Washington Post" was reporting many details of Propper's

arrangement with the CIA. Even more interesting was the following item in

the "Periscope" column of "Newsweek" magazine of October 11: "After

studying FBI and other field investigations, the CIA has concluded that the

Chilean secret police were not involved in the death of Orlando

Letelier.... The agency reached its decision because the bomb was too crude

to be the work of experts and because the murder, coming while Chile's

rulers were wooing U.S. support, could only damage the Santiago regime."

On November 1, the "Washington Post" reported a leak from Bush personally:

"CIA officials say ... they believe that operatives of the present Chilean

military junta did not take part in Letelier's killing. According to

informed sources, CIA Director Bush expressed this view in a conversation

last week with Secretary of State Kissinger, the sources said. What

evidence the CIA has obtained to support this initial conclusion was not


Most remarkably, Bush is reported to have flown to Miami on November 8 with

the purpose or pretext of taking "a walking tour of little Havana." As

author Donald Freed tells it, "Actually [Bush] met with the Miami FBI Spec

ial Agent in Charge Julius Matson and the chief of the anti-Castro

terrorism squad. According to a source close to the meeting, Bush warned

the FBI against allowing the investigation to go any further than the

lowest level Cubans." / Note #2 / Note #6

In a meeting presided over by Pottinger, Propper was only able to get

Lapham to agree that the Justice Department could ask the CIA to report any

information on the Letelier murder that might relate to the security of the

United States against foreign intervention. It was two years before any

word of the July-August cables was divulged.

Ultimately, some low-level Cubans were convicted in a trial that saw

Townley plea bargain and get off with a lighter sentence than the rest.

Material about Townley under his various aliases strangely disappeared from

the Immigration and Naturalization Service files, and records of the

July-August cable traffic with Vernon Walters (and Bush) were expunged. No

doubt there had been obstruction of justice; no doubt there had been a



Team A and Team B

Now, what about the intelligence product of the CIA, in particular the

National Intelligence Estimates that are the centerpiece of the CIA's work?

Here Bush was to oversee a maneuver to markedly enhance the influence of

the pro-Zionist wing of the intelligence community.

In June 1976, Bush accepted a proposal from Leo Cherne to carry out an

experiment in "competitive analysis" in the area of National Intelligence

Estimates of Soviet air defenses, Soviet missile accuracy, and overall

Soviet strategic objectives. Bush and Cherne decided to conduct the

competitive analysis by commissioning two separate groups, each of which

would present and argue for its own conclusions. On the one, Team A would

be the CIA's own National Intelligence Officers and their staffs. But there

would also be a separate Team B, a group of ostensibly independent outside


The group leader of Team B was Harvard history professor Richard Pipes, who

was working in the British Museum in London when he was appointed by Bush

and Cherne.

The liaison between Pipes's Team B and Team A, the official CIA, was

provided by John Paisley, who had earlier served as the liaison between

Langley and the McCord-Hunt-Liddy Plumbers. In this sense, Paisley served

as the staff director of the Team A-Team B experiment.

Team B's basic conclusion was that the Soviet military preparations were

not exclusively defensive, but rather represented the attempt to acquire a

first-strike capability that would allow the U.S.S.R. to unleash and

prevail in thermonuclear war. The U.S. would face a window of vulnerability

during the 1980s. But it is clear from Pipes's own discussion of the

debate, / Note #2 / Note #7 that Team B was less interested in the Soviet

Union and its capabilities than in seizing hegemony in the intelligence and

think-tank community in preparation for seizing the key posts in the

Republican administration that might follow Carter in 1980. The argument in

Team B quarters was that, since the Soviets were turning aggressive once

again, the U.S.A. must do everything possible to strengthen the only

staunch and reliable American ally in the Middle East or possibly anywhere

in the world, Israel. This meant not just that Israel had to be financed

without stint, but that Israel had to be brought into Central America, the

Far East, and Africa. There was even a design for a new NATO, constructed

around Israel, while junking the old NATO because it was absorbing vital

U.S. resources needed by Israel.

By contrast, Team B supporters like Richard Perle, who served as assistant

secretary of defense under Reagan, were bitterly hostile to the Strategic

Defense Initiative, which was plainly the only rational response to the

Soviet buildup, which was very real indeed. The "window of vulnerability"

argument had merit, but the policy conclusions favored by Team B had none,

since their idea of responding to the Soviet threat was, once again, to

subordinate everything to Israeli demands.

Team A and Team B were supposed to be secret, but leaks appeared in the

"Boston Globe" in October. Pipes was surprised to find an even more

detailed account of Team B and its grim estimate of Soviet intent in the

"New York Times" shortly after Christmas, but Paisley told him that Bush

and CIA official Richard Lehman had already been talking to the press, and

urged Pipes to begin to offer some interviews of his own. / Note #2 / Note


Typically enough, Bush appeared on "Face the Nation" early in the new year,

before the inauguration of the new President, Jimmy Carter, to say that he

was "appalled" by the leaks of Team B's conclusions. Bush confessed that

"outside expertise has enormous appeal to me." He refused to discuss the

Team B conclusions themselves, but did say that he wanted to "gun down"

speculation that the CIA had leaked a tough estimate of the Soviet Union's

military buildup in order to stop Carter from cutting the defense budget.

After the Team B conclusions had been bruited around the world, Pipes

became a leading member of the Committee on the Present Danger, where his

fellow Team B veteran, Paul Nitze, was already ensconced, along with Eugene

V. Rostow, Dean Rusk, Lane Kirkland, Max Kampelman, Richard Allen, David

Packard and Henry Fowler. About 30 members of the Committee on the Present

Danger went on to become high officials of the Reagan administration.

Ronald Reagan himself embraced the "window of vulnerability" thesis, which

worked as well for him as the bomber gap and missile gap arguments had

worked in previous elections. When the Reagan administration wasbeing

assembled, Bush and James Baker had a lot to say about who got what

appointments. Bush was the founder of Team B, and that is the fundamental

reason why such pro-Zionist neoconservatives as Max Kampelman, Richard

Perle, Steven Bryen, Noel Koch, Paul Wolfowitz and Dov Zakem showed up in

the Reagan administration.

In a grim postlude to the Team B exercise, Bush's hand-picked staff

director for the operation, John Paisley, the Soviet analyst (Paisley was

the former deputy director of the CIA's Office of Strategic Research) and

CIA liaison to the Plumbers, disappeared on September 24, 1978 while

sailing on Chesapeake Bay in his sloop, the "Brillig." Several days later,

a body was found floating in the bay in an advanced state of decomposition,

and with a gunshot wound behind the left ear. The corpse was weighted down

by two sets of ponderous diving belts. The body was four inches shorter

than Paisley's own height, and Paisley's wife later asserted that the body

found was not that of her husband. Despite all this, the body was

positively identified as Paisley's, the death summarily ruled a suicide,

and the body quickly cremated at a funeral home approved by the Office of



Parting Shots

As he managed the formidable world-wide capabilities of the CIA during

1976, Bush was laying the groundwork for his personal advancement to higher

office and greater power in the 1980s. As we have seen, there was some

intermittent speculation during the year that, in spite of what Ford had

promised the Senate, Bush might show up as Ford's running mate after all.

But, at the Republican convention, Ford chose Kansas Senator Bob Dole for

Vice President. If Ford had won the election, Bush would certainly have

attempted to secure a further promotion, perhaps to secretary of state,

defense, or treasury as a springboard for a new presidential bid of his own

in 1980. But if Carter won the election, Bush would attempt to raise the

banner of the non-political status of the CIA in order to convince Carter

to let him stay at Langley during the period 1977-81 as a "non-partisan"


In the close 1976 election, Carter prevailed by vote fraud in New York,

Ohio, and other states, but Ford was convinced by William Nelson and Happy

Rockefeller, as well as by his own distraught wife Betty, that he must

concede in order to preserve the work of "healing" that he had accomplished

since Watergate. Carter would therefore enter the White House.

Bush prepared to make his bid for continuity at the CI A. Shortly after the

election, he was scheduled to journey to Plains to brief Carter with the

help of his deputy Henry Knoche. The critical meeting with Carter went very

badly indeed. Bush took Carter aside and argued that in 1960 and 1968, CIA

directors were retained during presidential transitions, and that it would

make Carter look good if he did the same. Carter signaled that he wasn't

interested. Then Bush lamely stammered that if Carter wanted his own man in

Langley, Bush would be willing to resign, which is of course standard

procedure for all agency heads when a new President takes office. Carter

said that that was indeed exactly what he wanted, and that he would have

his own new DCI ready by January 21, 1977. Bush and Knoche then briefed

Carter and his people for some six hours. Carter insiders told the press

that Bush's briefing had been a "disaster." "Jimmy just wasn't impressed

with Bush," said a key Carter staffer. / Note #2 / Note #9

Bush and Knoche then flew back to Washington, and on the plane Bush wrote a

memo for Henry Kissinger describing his exchanges with Carter. At midnight,

Bush drove to Kissinger's home and briefed him for an hour.

Bush left Langley with Carter's inauguration, leaving Knoche to serve a

couple of months as acting DCI. George Bush now turned to his family

business of international banking.


Notes for Chapter XVI

14. William Colby, "Honorable Men" (New York: Simon and Schuster, 1978), p. 452.

15. On Murphy and Noriega, see Frank McNeil, "War and Peace in Central

America" (New York: Scribners, 1988), p.278.

16. See John Prados, "Presidents' Secret Wars" (New York: William Morrow,

1986); Powers, "op. cit."; and John Ranelagh, "The Agency: The Rise and

Decline of the CIA" (New York: Simon and Schuster, 1987).

17. Cord Meyer, "Facing Reality: >From World Federalism to the CIA"

(Washington, D.C.: University Press of America, 1982), pp. 225-26.

18. "Washington Post", Aug. 10, 1988.

19. Ford Library, Philip W. Buchen Files, Box 2.

20. For Ford's reorganization, see Johnson, "op. cit.", pp. 194-97, and

"New York Times", Feb. 18, 1976.

21. Scott Armstrong and Jeff Nason, "Company Man," "Mother Jones", October 1988.

22. See Armstrong and Nason, "op. cit.", p. 43.

23. Freed, "op. cit.", p. 174.

24. Dinges and Landau, "op. cit.", p. 384.

25. Taylor Branch and Eugene M. Propper, "Labyrinth" (New York: Viking

Press, 1982), p. 72.

26. Freed, "op. cit.", p. 174.

27. Richard Pipes, "Team B: The Reality Behind the Myth," "Commentary",

Oct. 1986.

28. "Ibid.", p. 34. Pipes makes clear that it was Bush and Richard Lehman

who both leaked to David Binder of the "New York Times." Lehman also

encouraged Pipes to leak. The version offered by William R. Corson, Susan

B. Trento and Joseph J. Trento in "Widows" (New York: Crown, 1989), namely

that Paisley did the leaking, may also be true, but will not exonerate


29. Evans and Novak column, "Houston Post", Dec. 1, 1976. For the pro-Bush

account of these events, see Nicholas King, "George Bush: A Biography" (New

York: Dodd, Mead & Company, 1980), pp. 109-10.




Shortly after leaving Langley, Bush asserted his birthright as an

international financier, that is to say, he became a member of the board of

directors of a large bank. On February 22, 1977, Robert H. Stewart III, the

chairman of the holding company for First International Bankshares of

Dallas, announced that Bush would become the chairman of the executive

committee of First International Bank of Houston, and would simultaneously

become a director of First International Bankshares Ltd. of London, a

merchant bank owned by First International Bankshares, Inc. Bush also

became a director of First International Bankshares, Inc. ("Interfirst"),

which was the Dallas-based holding company for the entire international


During the 1988 campaign, Bush gave the implacable stonewall to any

questions about the services he performed for the First International

Bankshares group or about any other aspects of his business activities

during the pre-1980 interlude.

Later, after the Reagan-Bush orgy of speculation and usury had ruined the

Texas economy, the Texas commercial banks began to collapse into

bankruptcy. Interfirst merged with RepublicBank during 1987 to form First

RepublicBank, which became the biggest commercial bank in Texas. Bankruptcy

overtook the new colossus just a few months later, but federal regulators

delayed their inevitable intervention until after the Texas primary, in the

spring of 1988, in order to avoid a potentially acute embarrassment for

Bush. Once Bush had the presidential nomination locked up, the Federal

Deposit Insurance Corporation, with the connivance of the IRS, awarded the

assets of First RepublicBank to the North Carolina National Bank in

exchange for no payment whatsoever on the part of NCNB (now NationsBank).

During the heady days of Bush's directorship at Interfirst, the bank

retained a law firm in which one Lawrence Gibbs was a partner. Gibbs, a clear Bush asset, was made commissioner of the Internal Revenue

Service on August 4, 1986. Here, he engineered the sweetheart deal for NCNB

by decreeing $1.6 billion in tax breaks for this bank.

Bush also joined the board of Purolator Oil Company in Rahway, New Jersey,

where his crony, Wall Street raider Nicholas Brady (later Bush's Secretary

of the Treasury) was the chairman. Bush also joined the board of Eli Lilly

& Co., a very large and very sinister pharmaceutical company. The third

board Bush joined was that of Texas Gulf, Inc. Bush's total 1977 rakeoff

from the four companies with which he was involved was $112,000, according

to Bush's 1977 tax return.

Bush also found time to line his pockets in a series of high-yield deals

that begin to give us some flavor of what would later be described as the

"financial excesses of the 1980s," in which Bush's circle was to play a

decisive role.

A typical Bush venture of this period was Ponderosa Forest Apartments, a

highly remunerative speculative play in real estate. Ponderosa bought up a

180-unit apartment complex near Houston that was in financial trouble,

gentrified the interiors, and hiked the rents. Horace T. Ardinger, a Dallas

real estate man who was among Bush's partners in this deal, described the

transaction as "a good tax gimmick ... and a typical Texas joint venture


According to Bush's tax returns from 1977 through 1985, the Ponderosa

partnership accrued to Bush a paper loss of $225,160, which allowed him to

avoid payment of some $100,000 in federal taxes alone, plus a direct profit

of over $14,000 and a capital gain of $217,278. This type of windfall

represents precisely the form of real estate swindle that contributed to

the Texas real estate and banking crisis of the mid-1980s. The deal

illustrates one of the important ways in which the federal tax base has

been eroded through real estate scams. We also see why it is no surprise

that the one fiscal innovation which has earned Bush's sustained attention

is the idea of a reduction in the capital gains tax to allow those who

engage in swindles like these to pay an even smaller federal tax bite.

But Bush's main preoccupation during these years was to assemble a

political machine with which he could bludgeon his way to power. After his

numerous frustrations of the past, Bush was resolved to organize a campaign

that would go far beyond the innocuous exercise of appealing for citizens'

votes. If such a machine were actually to succeed in seizin g power in

Washington, tendencies toward the creation of an authoritarian police state

would inevitably increase.


The Spook Campaign Machine

Bush assembled quite a campaign machine.

One of the central figures of the Bush effort would be James Baker III,

Bush's friend of ten years' standing. Baker's power base derived first of

all from his family's Houston law firm, Baker & Botts, which was founded

just after the end of the Civil War by defeated partizans of the

Confederate cause.

Baker & Botts founder Peter Gray had been assistant treasurer of the

Confederate States of America and financial supervisor of the CSA's

"Trans-Mississippi Department." Gray, acting on orders of Confederate

Secretary of State Robert Toombs, financed the subversive work of

Confederate Gen. Albert Pike among the Indian tribes of the Southwest. The

close of the war in 1865 had found Pike hiding in Canada, and Toombs in

exile in England. Pike was excluded from the general U.S. amnesty for

rebels because he was thought to have induced Indians to commit massacres

and war crimes.

Pike and Toombs reestablished the "Southern Jurisdiction" of the Scottish

Rite of Freemasonry, of which Pike had been the leader in the slave states

before the Civil War. Pike's deputy, one Phillip C. Tucker, returned from

Scottish Rite indoctrination in Great Britain to set up a Scottish Rite

lodge in Houston in the spring of 1867. Tucker designated Walter Browne

Botts and his relative Benjamin Botts as the leaders of this new Scottish

Rite lodge. / Note #1 The policy of the Scottish Rite was to regroupunrecon

structed Confederates to secure the disenfranchisement of black citizens

and to promote Anglophile domination of finance and business.

By the beginning of the twentieth century, there were two great powers

dominating Texas: On the one hand, the railroad empire of E.H. Harriman,

served by the law firm of Baker & Botts; and on the other, the

British-trained political operative Colonel Edward M. House, the controller

of President Woodrow Wilson. The close relation between Baker & Botts and

the Harriman interests has remained in place down to the present. And since

the time that Captain James A. Baker founded the Texas Commerce Bank, the

Baker family has helped the London-New York axis run the Texas banking


In 1901, the discovery of large oil deposits in Texas offered great promise

for the future economic development of the state, but also attracted the

Anglo-American oil cartel. The Baker family law firm in Texas, like the

Bush and Dulles families in New York, was aligned with the

Harriman-Rockefeller cartel.

The Bakers were prominent in supporting eugenics and utopian-feudalist

social engineering. Captain James A. Baker, so the story goes, the

grandfather of the current boss of Foggy Bottom, solved the murder of his

client William Marsh Rice and took control of Rice's huge estate. Baker

used the money to start Rice University and became the chairman of the

school's board of trustees. Baker sought to create a center for diffusion

of racist eugenics, and for this purpose brought in Julian Huxley of the

infamous British oligarchical family to found the biology program at Rice

starting in 1912. / Note #2 Huxley was the vice president of the British

Eugenics Society and actually helped to organize "race science" programs

for the Nazi Interior Ministry, before becoming the founding director

general of UNESCO in 1946-48.

James A. Baker III was born April 28, 1930, in the fourth generation of his

family's wealth. Baker holdings have included Exxon, Mobil, Atlantic

Richfield, Standard Oil of California, Standard Oil of Indiana, Kerr-McGee,

Merck, and Freeport Minerals. Baker also held stock in some large New York

banks during the time that he was negotiating the Latin American debt

crisis in his capacity as secretary of the treasury. / Note #3

James Baker grew up in patrician surroundings. His social profile has been

described as "Tex-prep." Like his father, James III attended the Hill

School near Philadelphia, and then went on to Princeton, where he was a

member of the Ivy Club, a traditional preserve of Eastern Anglophile

Liberal Establishment oligarchs.

Baker & Botts maintains an "anti-nepotism" policy, so James III became a

boss of Houston's Andrews, Kurth, Campbell & Jones law firm, a satellite of

Baker & Botts. Baker's relation to Bush extends across both law firms: In

1977, Baker & Botts partner Blaine Kerr became president of Pennzoil, and

in 1979, Baker & Botts partner B.J. Mackin became chairman of Zapata

Corporation. Baker & Botts have always represented Zapata, and are often

listed as counsel for Schlumberger, the oil services firm. James Baker and

his Andrews, Kurth partners were the Houston attorneys for First

International Bank of Houston when George Bush was chairman of the bank's

executive committee.

During the 1980 campaign, Baker became the chairman of the Reagan-Bush

campaign committee, while fellow Texan Bob Strauss was chairman of the

Carter-Mondale campaign. But Baker and Strauss were at the very same time

business partners in Herman Brothers, one of America's largest beer

distributors. Bush Democrat Strauss later went to Moscow as Bush's

ambassador to the U.S.S.R., and later, to Russia.

Another leading Bush supporter was Ray Cline. During 1979, it was Ray Cline

who had gone virtually public with a loose and informal, but highly

effective, campaign network mainly composed of former intelligence

officers. Cline had been the CIA station chief in Taiwan from 1958 to 1962.

He had been deputy director of central intelligence from 1962 to 1966, and

had then gone on to direct the intelligence-gathering operation at the

State Department. Cline became a de facto White House official during the

first Bush administration, and wrote the White House boiler plate entitled

"National Security Strategy of the United States," under which the Gulf war

was carried out.

Heading up the Bush campaign muckraking "research" staff was Stefan Halper,

Ray Cline's son-in-law and a former official of the Nixon White House.

A member of Halper's staff was a CIA veteran named Robert Gambino. Gambino

had held the sensitive post of director of the CIA's Office of Security.

The Office of Security is reputed to possess extensive files on the

domestic activities of American citizens. David Aaron, Brzezinski's deputy

at the Carter National Security Council, recalled that some high Carter

officials were "upset" that Gambino had gone to work for the Bush camp.

According to Aaron, "several [CIA] people took early retirement and went to

work for Bush's so-called security staff. The thing that upset us, was that

a guy who has been head of security for the CIA has been privy to a lot of

dossiers, and the possibility of abuse was quite high, although we never

heard of any occasion when Gambino called someone up and forced them to do

something for the campaign." / Note #4

Other high-level spooks active in the Bush campaign included Lt. Gen. Sam

V. Wilson and Lt. Gen. Harold A. Aaron, both former directors of the

Defense Intelligence Agency. Another enthusiastic Bushman was retired Gen.

Richard Stillwell, formerly the CIA's chief of covert operations for the

Far East. The former deputy director for operations, Theodore Shackley, was

also on board, reportedly as a speechwriter, but more likely for somewhat

heavier work.

According to one estimate, at least 25 former intelligence officials worked

directly for the Bush campaign. As Bill Peterson of the "Washington Post"

wrote on March 1, 1980, "Simply put, no presidential campaign in recent

memory -- perhaps ever -- has attracted as much support from the

intelligence community as the campaign of former CIA Director George Bush."

Further intelligence veterans among the Bushmen included Daniel C. Arnold,

the former CIA station chief in Bangkok, Thailand, who retired early to

join the campaign during 1979. Harry Webster, a former clandestine agent,

became a member of Bush's paid staff for the Florida primary. CIA veteran

Bruce Rounds was Bush's "director of operations" during the key New

Hampshire primary. Also on board with the Bushmen wa s Jon R. Thomas, a

former clandestine operative who had been listed as a State Department

official during a tour of duty in Spain, and who later worked on terrorism

and drug-trafficking at the State Department. Andrew Falkiewicz, the former

spokesman of the CIA in Langley, attended some of Bush's pre-campaign

brainstorming sessions as a consultant on foreign policy matters.

One leading bastion of the Bushmen was predictably David Atlee Philips's

AFIO, the Association of Former Intelligence Officers. Jack Coakley was a

former director and Bush's campaign coordinator for Virginia. He certified

that at the AFIO annual meeting in the fall of 1979, he counted 190 "Bush

for President" buttons among 240 delegates to the convention. / Note #5

James Baker was the obvious choice to be Bush's campaign manager. He had

served Bush in this function in the failed Senate campaign of 1970. During

the Ford years, Baker had advanced to become deputy secretary of commerce.

Baker had been the manager of Ford's failed 1976 campaign. In 1978, Baker

had attempted to get himself elected attorney general of Texas, but had

been defeated.

David Keene was political adviser. And, as always, no Bush campaign would

be complete without Robert Mosbacher heading up the national finance

operation. Mosbacher's experience, as we have seen, reached back to the

Bill Liedtke conveyances to Maurice Stans of the CREEP in 1972.

With the help of Baker and Mosbacher, Bush began to set up political

campaign committees that could be used to convoy quasi-legal "soft money"

into his campaign coffers. This is the classic stratagem of setting up

political action committees that are registered with the Federal Election

Commission for the alleged purpose of channeling funds into the campaigns

of deserving Republican (or Democratic) candidates. In reality, almost all

of the money is used for the presidential candidate's own staff, office,

mailings, travel and related expenses. Bush's principal vehicle for this

type of funding was called the Fund for Limited Government. During the

first six months of 1987, this group collected $99,000 and spent $46,000,

of which only $2,500 went to other candidates.

Despite the happy facade, Bush's campaign staff was plagued by turmoil and

morale problems, leading to a high rate of turnover in key posts.

One who has stayed on all along has been Jennifer Fitzgerald, a British

woman born in 1932 who had been with Bush at least since Beijing.

Fitzgerald later worked in Bush's vice-presidential office, first as

appointments secretary, and later as executive assistant. According to some

Washington wags, she controlled access to Bush in the same way that Martin

Bormann controlled access to Hitler. According to Harry Hurt, among former

Bush staffers, "Fitzgerald gets vituperative reviews. She has been accused

of bungling the 1980 presidential campaign by canceling Bush appearances at

factory sites in favor of luncheon club speeches. Critics of her

performance say she misrepresents staff scheduling requests and blocks

access to her boss.... A number of the vice president's close friends worry

that 'the Jennifer problem' -- or the appearance of one -- may inhibit

Bush's future political career. 'There's just something about her that

makes him feel good,' says one trusted Bush confidant. 'I don't think it's

sexual. I don't know what it is. But if Bush ever runs for president again,

I think he's going to have to make a change on that score." / Note #6


The Establishment's Candidate

Bush formally announced his presidential candidacy on May 1, 1979. One of

Bush's themes was the idea of a "Union of the English-Speaking Peoples."

Bush was asked later in his campaign by a reporter to elaborate on this.

Bush stated at that time that "the British are the best friend America has

in the world today. I believe we can benefit greatly from much close

collaboration in the economic, military, and political spheres. Sure, I am

an Anglophile. We should all be. Britain has never done anything bad to the

United States." / Note #7

Together with James Baker III, always the idea man of the Bush-Baker combo,

the Bush campaign studied Jimmy Carter's success story of 1976. They knew

they were starting with a "George Who?" virtually unknown to most voters.

First of all, Bush would ape the Carter strategy of showing up in Iowa and

New Hampshire early and often.

Thanks to Mosbacher's operation, the Bush campaign would advance on a

cushion of money -- he spent $1.3 million for the Illinois primary alone.

The biggest item would be media buys -- above all television. This time

Bush brought in Baltimore media expert Robert Goodman, who designed a

series of television shorts that were described as "fast-moving,

newsfilmlike portraits of an energetic, dynamic Bush creating excitement

and moving through crowds, with an upbeat musical track behind him. Each of

the advertisements used a slogan that attempted to capitalize on Bush's

experience, while hitting Carter's wretched on-the-job performance and

Ronald Reagan's inexperience on the national scene: 'George Bush,' the

announcer intoned, 'a President we won't have to train.'|" / Note #8

On November 3, 1979, Bush bested Sen. Howard Baker in a "beauty contest"

straw poll taken at the Maine Republican convention in Portland. Bush won

by a paper-thin margin of 20 votes out of 1,336 cast, and Maine was really

his home state, but the Brown Brothers Harriman networks at the "New York

Times" delivered a front-page lead story with a subhead that read, "Bush

Gaining Stature as '80 Contender."

Bush's biggest lift of the 1980 campaign came when he won a plurality in

the January 21 Iowa caucuses, narrowly besting Reagan, who had not put any

effort into the state. At this point, the Brown Brothers Harriman/Skull and

Bones media operation went into high gear. That same night Walter Cronkite

told viewers: "George Bush has apparently done what he hoped to do, coming

out of the pack as the principal challenger to front-runner Ronald Reagan."

In the interval between January 21 and the New Hampshire primary of

February 26, the Eastern Liberal Establishment labored mightily to put

George Bush into power as President that same year. The press hype in favor

of Bush was overwhelming. "Newsweek"'s cover featured a happy and smiling

Bush talking with his supporters: "Bush Breaks Out of the Pack," went the


"Time", which had been founded by Henry Luce of Skull and Bones, showed a

huge, grinning Bush and a smaller, very cross Reagan, headlined: "BUSH

SOARS." The leading polls, always doctored by the intelligence agencies and

other interests, showed a Bush boom: Lou Harris found that whereas Reagan

had led Bush into Iowa by 32-6 nationwide, Bush had pulled even with Reagan

at 27-27 within 24 hours after the Iowa result had become known.

Robert Healy of the "Boston Globe" stuck his neck out even further for the

neo-Harrimanite cause with a forecast that "even though he is still called

leading candidate in some places, Reagan does not look like he'll be on the

Presidential stage much longer."

NBC's Tom Brokaw started calling Reagan the "former front-runner." Tom

Pettit of the same network was more direct: "I would like to suggest that

Ronald Reagan is politically dead."

The Eastern Liberal Establishment had left no doubt who its darling was:

Bush, and not Reagan. In their arrogance, the Olympians had once again

committed the error of confusing their collective patrician whim with real

processes ongoing in the real world. The New Hampshire primary was to prove

a devastating setback for Bush, in spite of all the hype the Bushman

networks were able to crank out. How did it happen?


New Hampshire

George Bush was, of course, a lifelong member of the Skull and Bones secret

society of Yale University, through which he advanced toward the

freemasonic upper reaches of the Anglo-American Establishment, toward those

exalted circles of London, New York and Washington, in which the

transatlantic destiny of the self-styled Anglo-Saxon master race is

elaborated. The entrees provided by Skull and Bones membership would always

be, for Bush, the most vital ones. But, in addition to such exalted feudal

brotherhoods as Skull and Bones, the Anglo-American Establishment also

maintains a series of broader-based elite organizations whose function is

to manifest the hegemonic Anglo-American policy line to the broader layers

of the Establishment, including bureaucrats, businessmen, bankers,

journalists, professors and other such assorted retainers and stewards of


George Bush had thus found it politic over the years to become a member of

the New York Council on Foreign Relations. By 1979, Bush was a member of

the board of the CFR, where he sat next to his old patron Henry Kissinger.

The president of the CFR during this period was Kissinger clone Winston

Lord of the traditional Skull and Bones family.

George was also a member of the Bohemian Club of San Francisco, which had

been founded by Ambrose Bierce after the Civil War to cater to the

Stanfords, Huntingtons, Crockers, Hopkinses and the other nouveau-riche

tycoons that had emerged from the gold rush.

Then there was the Trilateral Commission, founded by David Rockefeller in

1973-74. The Trilateral Commission emerged at the same time that the

Rockefeller-Kissinger interests perpetrated the first oil hoax. Some of its

first studies were devoted to the mechanics of imposing

authoritarian-totalitarian forms of government in the United States,

Europe, and Japan to manage the austerity and economic decay that would be

the results of Trilateral policies.

As we saw briefly during Bush's Senate campaign, the combination of

bankruptcy and arrogance which was the hallmark of Eastern Liberal

Establishment rule over the United States generated resentments which could

make membership in such organizations a distinct political liability.

One who was caught up in the turbulence was William Loeb, the opinionated

curmudgeon of Pride's Crossing, Massachusetts who was the publisher of the

Manchester "Union Leader", the most important newspaper in the state. Loeb

had supported Reagan in 1976 and was for him again in 1980. Loeb might have

dispersed his fire against all of Reagan's Republican rivals, including

Howard Baker, Robert Dole, Phil Crane, John Anderson, John Connally and


Loeb had assailed Ford as "Gerry the Jerk" in 1976; his attacks on Sen.

Edmund Muskie reduced the latter to tears during the 1972 primary. Loeb

began to play up the theme of Bush as a liberal, as a candidate controlled

by the "internationalist" (or Kissinger) wing of the GOP and the Wall

Street bankers, always soft on communism and always ready to undermine

liberty through Big Government here at home. A February editorial by Loeb

reacted to Bush's Iowa success with these warnings of vote fraud: "The Bush

operation in Iowa had all the smell of a CIA covert operation.... Strange

aspects of the Iowa operation [included] a long, slow count and then the

computers broke down at a very convenient point, with Bush having a six per

cent bulge over Reagan.... Will the elite nominate their man, or will we

nominate Reagan?" / Note #1 / Note #1

For Loeb, the most damning evidence was Bush's membership in the Trilateral

Commission, the creature of David Rockefeller and the international

bankers. Carter and his administration had been packed with Trilateral

members; there were indications that the Establishment choice of Carter to

be the next U.S. President had been made at a meeting of the Trilateral

Commission in Kyodo, Japan, where Carter had been introduced by Gianni

Agnelli of Italy's FIAT motor company.

Loeb simplified all that: "George Bush is a Liberal" was the title of his

editorial published the day before the primary. Loeb flayed Bush as a

"spoiled little rich kid who has been wet-nursed to succeed and now,

packaged by David Rockefeller's Trilateral Commission, thinks he is

entitled to the White House as his latest toy."

Shortly before the election Loeb ran a cartoon entitled "Silk Stocking

Republicans," which showed Bush at a cocktail party with a cigarette and

glass in hand. Bush and the other participants, all male, were wearing

women's pantyhose.

Paid political ads began to appear in the "Union Leader" sponsored by

groups from all over the country, some helped along by John Sears of the

Reagan campaign. One showed a drawing of Bush juxtaposed with a Mr. Peanut

logo: "The same people who gave you Jimmy Carter want now to give you

George Bush," read the headline. The text described a "coalition of

liberals, multinational corporate executives, big-city bankers, and hungry

power brokers" led by David Rockefeller, whose "purpose is to control the

American government, regardless of which political party -- Democrat or

Republican -- wins the presidency this coming November! ... The Trojan

horse for this scheme," the ad went on, "is Connecticut-Yankee-turned-Texas

oilman George Bush -- the out-of-nowhere Republican who openly admits he is

using the same 'game-plan' developed for Jimmy Carter in the 1976

presidential nomination campaign." The ad went on to mention the Council on

Foreign Relations and the "Rockefeller money" that was the lifeblood of

Bush's effort.

While campaigning, Bush was asked once again about the money he received

from Nixon's 1970 Townhouse slush fund. Bush's stock reply was that his

friend Leon Jaworski had cleared him: "The answer came back, clean, clean,

clean," said Bush.

By now the Reagan camp had caught on that something important was

happening, something which could benefit Reagan enormously. First Reagan's

crony Edwin Meese piped up an oblique reference to the Trilateral

membership of some candidates, including Bush: "[A]ll these people come out

of an international economic industrial organization with a pattern of

thinking on world affairs" that led to a "softening on defense." That

played well, and Reagan decided he would pick up the theme. On February 7,

1980, Reagan observed in a speech that 19 key members of the Carter

administration, including Carter, were members of the Trilateral

Commission. According to Reagan, this influence had indeed led to a

"softening on defense" because of the Trilateraloids' belief that business

"should transcend, perhaps, the national defense." / Note #1 / Note #2

Bush realized that he was faced with an ugly problem. He summarily resigned

from both the Trilateral Commission and from the New York Council on

Foreign Relations. But his situation in New Hampshire was desperate. His

cover had been largely blown.

Now the real polls, the ones that are generally not published, showed Bush

collapsing, and even media that would normally have been rabidly pro-Bush

were obliged to distance themselves from him in order to defend their own


Bush was now running scared, sufficiently so as to entertain the prospect

of a debate among candidates.


Notes for Chapter XVII

1. Albert Pike to Robert Toombs, May 20, 1861 in "The War of the Rebellion:

A Compilation of the Official Records of the Union and Confederate Armies"

(Washington: U.S. Government Printing Office, 1881), Series I, Vol. III,

pp. 580-81. See also James David Carter, "History of the Supreme Council,

330 (Mother Council of the World), Ancient and Accepted Scottish Rite of

Freemasonry Southern Jurisdiction, U.S.A., 1861-1891" (Washington: The

Supreme Council, 330, 1967), pp. 5-24, and James David Carter, Ed., "The

First Century of Scottish Rite Masonry in Texas: 1867-1967" (Texas Scottish

Rite Bodies, 1967), pp. 32-33, 42.

2. Fredericka Meiners, "A History of Rice University: The Institute Years,

1907-1963" (Houston: Rice University, 1982).

3. Ronald Brownstein and Nina Easton, "Reagan's Ruling Class" (New York:

Pantheon Books, 1983), p. 650.

4. Joe Conason, "Company Man," "Village Voice," Oct. 1988.

5. Bob Callahan, "Agents for Bush," "Covert Action Information Bulletin,"

No. 33 (Winter 1990), pp. 5 ff.

6. Harry Hurt III, "George Bush, Plucky Lad," "Texas Monthly," June 1983,

p. 206.

7. L. Wolfe, "King George VII Campaigns in New Hampshire," "New

Solidarity," Jan. 8, 1980.

8. Jeff Greenfield, "The Real Campaign" (New York: Summit Books, 1982), pp.


10. Quoted in Greenfield, "op. cit.," p. 44.

11. Manchester "Union Leader," Feb. 24, 1980.

12. Sidney Blumenthal, "The Rise of the Counter-Establishment" (New York:

Perennial Library, 1988), pp. 82-83.






Epiphany of a Scoundrel

John Sears of the Reagan campaign signaled to the "Nashua Telegraph", a

paper published in southern New Hampshire, that Reagan would accept a

one-on-one debate with Bush. James Baker was gulled: He welcomed the idea

because the debate format would establish Bush as the main alternative to

Reagan. "We thought it was the best thing since sliced bread," said Baker.

Bob Dole complained to the Federal Elections Commission about being

excluded, and the Reagan camp suggested that the debate be paid for out of

campaign funds, half by Reagan and half by Bush. Bush refused to pay, but

Reagan pronounced himself willing to defray the entire cost. Thus it came

to pass that a bilateral Bush-Reagan debate was scheduled for February 23

at a gymnasium in Nashua.

For many, this evening would provide the epiphany of George Bush, a moment

when his personal essence was made manifest.

Bush propaganda has always tried to portray the "Nashua Telegraph" debate

as some kind of ambush planned by Reagan's diabolical campaign manager,

John Sears. Established facts include that the "Nashua Telegraph" owner,

blueblood J. Herman Pouliot, and "Telegraph" editor John Breen, were both

close personal friends of former Governor Hugh Gregg, who was Bush's

campaign director in the state. Bush had met with Breen before the debate.

Perhaps it was Bush who was trying to set some kind of a trap for Reagan.

On the night of February 23, the gymnasium was packed with more than 2,400

people. Bush's crony, Rep. Barber Conable (or "Barbarian Cannibal," later

Bush's man at the World Bank), was there with a group of congressmen for

Bush. Then the excluded GOP candidates, John Anderson, Howard Baker, Bob

Dole, and Phil Crane, all arrived and asked to meet with Reagan and Bush to

discuss opening the debate up to them as well. (Connally, also a candidate,

was in South Carolina.) Reagan agreed to meet with them and went backstage

into a small office with the other candidates. He expressed a general

willingness to let them join in. But Bush refused to talk to the other

candidates, and sat on the stage waiting impatiently for the debate to

begin. John Sears told Bush's press secretary, Peter Teeley, that Sears

wanted to talk to Bush about the debate format. "It doesn't work that way,"

hissed the liberal Teeley, who sent James Baker to talk with Sears. Sears

said it was time to have an open debate. Baker passed the buck to the

"Nashua Telegraph".

From the room behind the stage where the candidates were meeting, the

Reagan people sent U.S. Senator Gordon Humphrey out to urge Bush to come

and confer with the rest of them. "If you don't come now," said Humphrey to

Bush, "you're doing a disservice to party unity." Bush whined in reply:

"Don't tell me about unifying the Republican Party! I've done more for this

party than you'll ever do! I've worked too hard for this and they're not

going to take it away from me!" In the back room, there was a proposal that

Reagan, Baker, Dole, Anderson, and Crane should go on stage together and

announce that Reagan would refuse to debate unless the others were


"Everyone seemed quite irritated with Bush, whom they viewed as acting like

a spoiled child," wrote an aide to Anderson later. / Note #1 / Note #3 Bush

refused to even acknowledge the presence of Dole, who had helped him get

started as GOP chairman; of Anderson and Crane, former House colleagues;

and of Howard Baker, who had helped him get confirmed at the CIA. George

kept telling anybody who came close that he was sticking with the original


The audience was cheering for the four excluded candidates, demanding that

they be allowed to speak. Publisher Pouliot addressed the crowd: "This is

getting to sound more like a boxing match. In the rear are four other

candidates who have not been invited by the "Nashua Telegraph"," said

Pouliot. He was roundly booed. "Get them chairs," cried a woman, and she

was applauded. Bush kept staring straight ahead into space, and the

hostility of the crowd was focusing more and more on him.

Reagan started to speak, motivating why the debate should be opened up.

Editor Breen, a rubbery-looking hack with a bald pate and glasses, piped

up: "Turn Mr. Reagan's microphone off." There was pandemonium. "You

Hitler!" screamed a man in the front row right at Breen.

Reagan replied: "I'm paying for this microphone, Mr. Breen." The crowd

broke out in wild cheers. Bush still stared straight ahead in his temper

tantrum. Reagan spoke on to ask that the others be included, saying that

exclusion was unfair. But he was unsure of himself, looking to Nancy Reagan

for a sign as to what he should do. At the end, Reagan said he would prefer

an open debate, but that he would accept the bilateral format if that were

the only way.

With that, the other candidates left the podium in a towering rage.

"There'll be another day, George," growled Bob Dole.

Reagan and Bush then debated, and those who were still paying attention

agreed that Bush was the loser. A staff member later told Bush, "The good

news is that nobody paid any attention to the debate. The bad news is y ou

lost that, too."

Film footage of Reagan grabbing the microphone while Bush stewed in his

temper tantrum was all over local and network television for the next 48

hours. It was the epiphany of a scoundrel.

Now the Bush damage control apparatus went into that mode it finds so

congenial: lying. A radio commercial was prepared under orders from James

Baker for New Hampshire stations: Here an announcer, not Bush, intoned that

"at no time did George Bush object to a full candidate forum. This

accusation by the other candidates is without foundation whatsoever."

Walter Cronkite heard a whining voice from Houston, Texas as he interviewed

Bush on his new program: "I wanted to do what I agreed to do," said the

whine. "I wanted to debate with Ronald Reagan."

The New Hampshire primary was a debacle for Bush. Reagan won 50 percent of

the votes to George's 23 percent, with 13 percent for Baker and 10 percent

for Anderson. / Note #1 / Note #4

Bush played out the string through the primaries, but he won only four

states (Massachusetts, Connecticut, Pennsylvania and Michigan) plus Puerto

Rico. Reagan took 29. Even in Pennsylvania, where the Bushmen outspent

Reagan by a colossal margin, Reagan managed to garner more delegates even

though Bush got more votes.

Bush was able to keep going after New Hampshire because Mosbacher's

machinations had given him a post-New Hampshire war chest of $3 million.

The Reagan camp had spent two-thirds of their legal total expenditure of

$18 million before the primaries had begun. This had proven effective, but

it meant that in more than a dozen primaries, Reagan could afford no televis

ion purchases at all. This allowed Bush to move in and smother Reagan under

a cascade of greenbacks in a few states, even though Reagan was on his way

to the nomination. That was the story in Pennsylvania and Michigan. The

important thing for Bush now was to outlast the other candidates and to

build his credentials for the vice-presidency, since that was what he was

now running for.


Seeking his 'Birthright'

All the money and organization had not sufficed. After some expensive

primary failures, Bush now turned his entire attention to the quest for his

"birthright," the vice-presidency. This would be his fifth attempt to

attain that office, and once again, despite the power of Bush's network,

success was uncertain.

Inside the Reagan camp, one of Bush's greatest assets would be William

Casey, who had been closely associated with the late Prescott Bush. Casey

was to be Reagan's campaign manager for the final phase of the 1980

elections. In 1962, Prescott and Casey had co-founded a think tank called

the National Strategy Information Center in New York City, a forum where

Wall Street lawyers like Casey could join hands with politicians from

Prescott's wing of the Republican Party, financiers, and the intelligence

community. The National Strategy Information Center provided material for a

news agency called Forum World Features, a CIA proprietary that operated in

London, and which was in liaison with the British Information Research

Department, a Cold War propaganda unit set up by Christopher Mayhew of

British intelligence with the approval of Prime Minister Clement Attlee.

This Prescott Bush-William Casey think tank promoted the creation of

endowed chairs in strategic analysis, national intelligence and the like on

a number of campuses. The Georgetown Center for Strategic and International

Studies, later the home of Kissinger, Michael Ledeen and a whole stable of

ideologues of the Anglo-American empire, was in part a result of the work

of Casey and Prescott.

Casey was also a close associate of George Bush. During 1976, Ford

appointed Casey to PFIAB, where Casey was an enthusiastic supporter of the

Team B operation along with Bush and Leo Cherne. George Bush and Casey

would play decisive roles in the secret government operations of the Reagan


As the Republican convention gathered in Detroit in July 1980, the problem

was to convince Reagan of the inevitability of tapping Bush as his running

mate. But Reagan did not want Bush. He had conceived an antipathy, even a

hostility, for George. What Reagan had experienced personally from Bush

during the "Nashua Telegraph" debate had left a lasting and highly

derogatory impression.

According to one account of this phase, "ever since the episode in Nashua

in February, Reagan had come to hold the preppy Yankee transplant in, as

the late Senator Robert Kerr of Oklahoma used to say, minimum high regard.

'Reagan is a very gracious contestant,' one of his inner circle said, 'and

he generally views his opponents with a good deal of respect. The thing he

couldn't understand was Bush's conduct at the "Nashua Telegraph" debate. It

imprinted with Reagan that Bush was a wimp. He remembered that night

clearly when we had our vice-presidential discussions. He couldn't

understand how a man could have sat there so passively. He felt it showed a

lack of courage." And now that it was time to think about a running mate,

the prospective presidential nominee gave a sympathetic ear to those who

objected to Bush for reasons that ran, one of the group said later, from

his behavior at Nashua to 'anti-Trilateralism.'|" According to this

account, conservatives seeking to stop Bush at the convention were citing

their suspicions about a "|'conspiracy' backed by Rockefeller to gain

control of the American government." / Note #1 / Note #5

Drew Lewis was a leading Bushman submarine in the Reagan camp, telling the

candidate that Bush could help him in electoral college mega-states like

Pennsylvania and Michigan where Ted Kennedy had demonstrated that Carter

was vulnerable during the primaries. Lewis badgered Reagan with the

prospect that if he waited too long, he would have to accept a politically

neutral running mate in the way that Ford took Dole in 1976, which might

end up costing him the election. According to Lewis, Reagan needed to

broaden his base, and Bush was the most palatable and practical vehicle for

doing so.

Much to his credit, Reagan resisted; "[H]e told several staff members and

advisers that he still harbored 'doubts' about Bush, based on Nashua. 'If

he can't stand up to that kind of pressure,' Reagan told one intimate, 'how

could he stand up to the pressure of being President?' To another, he said:

'I want to be very frank with you. I have strong reservations about George

Bush. I'm concerned about turning the country over to him.'|"

As the convention came closer, Reagan continued to be hounded by Bushmen

from inside and outside his own campaign. A few days before the convention,

it began to dawn on Reagan that one alternative to the unpalatable Bush

might be former President Gerald Ford, assuming the latter could be

convinced to make the run. Two days before Reagan left for Detroit,

according to one of his strategists, Reagan "came to the conclusion that it

would be Bush, but he wasn't all that happy about it." / Note #1 / Note #6

But this was not yet the last word.

Casey, Meese and Michael Deaver sounded out Ford, who was reluctant but did

not issue a categorical rejection. Stuart Spencer, Ford's 1976 campaign

manager, reported to Reagan on his contacts with Ford. "Ron," Spencer said,

"Ford ain't gonna do it, and you're gonna pick Bush." But judging from

Reagan's reaction, Spencer recalled later, "There was no way he was going

to pick Bush," and the reason was simple: Reagan just didn't like the guy.

"It was chemistry," Spencer said. / Note #1 / Note #7

Reagan now had to be ground down by an assortment of Eastern Liberal

Establishment perception-mongers and political heavies. Much of the

well-known process of negotiation between Reagan and Ford for the "Dream

Ticket" of 1980 was simply a charade to disorient and demoralize Reagan

while eating up the clock, until the point was reached when Reagan would

have no choice but to make the classic phone call to Bush. It is obvious

that Reagan offered the vice-presidency to Ford, and that the latter

refused to accept it outright, but engaged in a process of negotiations

ostensibly in order to establish the conditions under which he might,

eventually, accept. / Note #1 / Note #8 Casey called in Henry Kissinger and

asked him to intercede with Ford. What then developed was a marathon of

haggling in which Ford was represented by Kissinger, Alan Greenspan, Jack

Marsh and Bob Barrett. Reagan was represented by Casey, Meese and

perception-monger Richard Wirthlin. Dick Cheney, Ford's former chief of

staff, who is now Bush's pro-genocide secretary of defense, also got into

the act.

This complex strategy of intrigue culminated in Ford's notorious interview

with Walter Cronkite, in which the CBS anchorman asked Ford if "It's got to

be something like a co-presidency?" "That's something Governor Reagan

really ought to consider," replied Ford, which was not what a serious

vice-presidential candidate might say, but did correspond rather well to

what "Gerry the Jerk" would say if he wanted to embarrass Reagan and help


The best indication that Ford had been working all along as an agent of

Bush was provided by Ford himself to Germond and Witcover: "Ford,

incidentally, told us after the election that one of his prime objectives

at the convention had been 'to subtly help George Bush get the

[vice-presidential] nomination.'|" / Note #1 / Note #9

Drew Lewis helped Reagan make the call that he found so distasteful. Reagan

came on the line: "Hello, George, this is Ron Reagan. I'd like to go over

to the convention and announce that you're my choice for vice president ...

if that's all right with you."

"I'd be honored, Governor."

Reagan now proceeded to the convention floor, where he would announce his

choice of Bush. Knowing that this decision would alienate many of Reagan's

ideological backers, the Reagan campaign leaked the news that Bush had been

chosen to the media, so that it would quickly spread to the convention

floor. They were seeking to cushion the blow, to avoid mass expressions of

disgust when Bush's name was announced. Even as it was, there was much

groaning and booing among the Reagan faithful.

As the Detroit convention came to a close, the Reagan and Bush campaign

staffs were merged, with James Baker assuming a prominent position in the

Casey-run Reagan campaign. The Ray Cline, Halper, and Gambino operations

were all continued. From this point on, Reagan's entourage would be heavily

infiltrated by Bushmen.


The October Surprise

The Reagan-Bush campaign, now chock full of Bush's Brown Brothers

Harriman/Skull and Bones assets, announced a campaign of espionage. This

campaign told reporters that it was going to spy on the Carter regime.

Back in April, Carter had taken to live television at 7:00 a.m. one morning

to announce some ephemeral progress in his efforts to secure the release of

State Department officials and others from the U.S. embassy in Teheran, who

were being held as hostages by the Khomeini forces in Iran. This

announcement was timed to coincide with Democratic primaries in Kansas and

Wisconsin, in which Carter was able to overwhelm challenges from Teddy

Kennedy and Jerry Brown. A memo from Richard Wirthlin to Casey and Reagan

initiated a discussion of how the Carter gang might exploit the advantages

of incumbency in order to influence the outcome of the election, perhaps by

attempting to stampede the public by some dramatic event at the last

minute, such as the freeing of the hostages in Teheran. On April 24, a

military task force failed to free the hostages. Casey began to institute

countermeasures even before the Detroit GOP convention.

During the convention, at a July 14 press conference, Casey told reporters

of his concern that Carter might spring an "October Surprise" in foreign or

domestic policy on the eve of the November elections. He announced that he

had set up what he called an "incumbency watch" to monitor Carter's

activities and decisions. Casey explained that an "intelligence operation"

directed against the Carter White House was functioning "already in

germinal form." Ed Meese, who was with Casey at this press conference,

added that the October Surprise "could be anything from a summit conference

on energy" or development in Latin America, or perhaps the imposition of

"wage and price controls" on the domestic economy.

"We've talked about the October surprise and what the October surprise will

be," said Casey. "I think it's immoral and improper." / Note #2 / Note #0

The previous evening, in a television appearance, Reagan had suggested that

"the Soviet Union is going to throw a few bones to Mr. Carter during this

coming campaign to help him continue as President."

Although Casey and Meese had defined a broad range of possibilities for the

October Surprise, the most prominent of these was certainly the liberation

of the American hostages in Iran. A poll showed that if the hostages were

to be released during the period between October 18 and October 25, Carter

could receive a 10 percent increase in popular vote on election day.

The "incumbency watch" set up by Casey would go beyond surveillance and

become a dirty tricks operation against Carter.

What followed was in essence a pitched battle between two fascist gangs,

the Carter White House and the Bush-Casey forces. Out of this 1980 gang

warfare, the post-1981 United States regime would emerge.

Carter and Brzezinski had deliberately toppled the Shah of Iran, and

deliberately installed Khomeini in power. This was an integral part of

Brzezinski's "arc of crisis" geopolitical lunacy, another made-in-London

artifact which called for the United States to support the rise of

Khomeini, and his personal brand of fanaticism, a militant heresy within

Islam. U.S. arms deliveries were made to Iran during the time of the Shah;

during the short-lived Shahpour Bakhtiar government at the end of the Shah's

reign; and continuously after the advent of Khomeini.

Subsequently, President Carter and senior members of his administration

have suggested that the Reagan/Bush campaign cut a deal with the Khomeini

regime to block the liberation of the hostages before the November 1980

election. By early 1992, the charges and countercharges reached such a

fever pitch that a preliminary congressional investigation of the affair

had been initiated.

In March 1992, "Executive Intelligence Review" issued a Special Report

titled, "Treason in Washington: New Evidence on the 'October Surprise,'|" /

Note #2 / Note #1 which presented extensive new evidence from internal FBI

and CIA documents, released under the Freedom of Information Act, that

suggests that the then-Republican vice-presidential candidate played a

personal role in keeping the hostages in Khomeini's hands until after

Election Day 1980; and that Casey, a personal friend of Bush's father and

Reagan's CIA director, coordinated the operation.

The central link suggesting Bush's role in the scandal was Cyrus Hashemi,

an Iranian arms dealer and agent of the Iranian SAVAK secret police, whom

Casey seems to have recruited as a liaison to the mullahs.

On December 7, 1979, less than two months after the hostages were seized,

Carter's assistant secretary of state, Harold Saunders, was contacted by an

intermediary for Cyrus Hashemi. The Iranian arms merchant proposed a deal

to free the hostages, and submitted a memorandum calling for the following:

removal of the ailing expatriate Shah from U.S. territory; an apology by

the United States to the people of Iran for past U.S. interference; the

creation of a United Nations Commission; the unfreezing of the Iranian

financial assets seized by Carter; and arms and spare parts deliveries by

the United States to Iran. All of this was summed up in a memorandum

submitted to Secretary of State Cyrus Vance following meetings with Hashemi

and his attorney. / Note #2 / Note #2

The notable aspect of this encounter is the identity of the American lawyer

who was both the business partner and the intermediary for the Iranian

gun-runner: John Stanley Pottinger. The account of the 1976 Letelier case

provided above (see Chapter 16) has established that Pottinger was a close

friend of George Bush. Pottinger, it will be recalled, had served as

assistant attorney general for civil rights in the Nixon and Ford

administration s between 1973 and 1977, after having directed the U.S.

Office of Civil Rights in the Justice Department between 1970 and 1973.

Pottinger had also stayed on into the early Carter administration, serving

as special assistant to the attorney general from February to April 1977.

Pottinger had then joined the law firm of Tracy, Malin and Pottinger of

Washington, London, and Paris. After the 1980 election, Pottinger was being

considered for a high-level post in the Reagan/Bush administration.

This same Pottinger was now the representative for gun-runner Cyrus

Hashemi. Given Pottinger's proven relation to Bush, we may wonder to what

extent was Bush informed of Hashemi's proposal, and of the responses of the

Carter administration.

Relevant evidence that might help us to determine what Bush knew and when

he knew it is still being withheld by the Bush regime. The FBI bugged Cyrus

Hashemi's phones and office from August 1980 to February 1981, and many of

the conversations that were recorded were between Hashemi and Bush's friend

Pottinger. Ten years later, in November 1991, the FBI released heavily

redacted summaries of some of the conversations, but most of the summaries

and transcripts are still classified.

"EIR"'s Special Report thoroughly documented how Pottinger was protected

from indictment by the Reagan-Bush Justice Department. For years,

prosecution of Hashemi and Pottinger, for illegally conspiring to ship

weapons to the Khomeini regime, was blocked by the administration on

"national security" grounds. Declassified FBI documents show that an

indictment of Pottinger had been drawn up, but that the indictment was

killed at the last minute in 1984 when the FBI "lost"crucial taped

evidence. The FBI conducted an extensive internal investigation of the

missing "Pottinger tapes" but the results have never been disclosed.

Other information on the intentions of the Khomeini regime and secret

dealings may have reached Bush from his old friend and associate Mitchell

Rogovin, the former CIA general counsel. During 1976, Rogovin had

accompanied Bush on many trips to the capital to testify before

congressional committees; the two were known to be close. Rogovin was

credited with having saved the CIA after it came under major congressional

and media attack in the mid-1970s. In the spring of 1980, Rogovin told the

Carter administration that he had been approached by Iranian-American arms

dealer Houshang Lavi with an offer to start negotiations for the release of

the hostages. Lavi claimed to be an emissary of Iranian President Abol

Hassan Bani-Sadr; Rogovin at this time was working as the lawyer for the

John Anderson GOP presidential campaign.

Bush's family friend Casey had also been in direct contact with Iranian

representatives. Jamshid Hashemi, the brother of Cyrus Hashemi (who died

under suspicious circumstances during 1986), had told Gary Sick, a former

official of Carter's National Security Council, that he met with William

Casey at the Mayflower Hotel in Washington, D.C. in March of 1980 to

discuss the hostages. According to Jamshid Hashemi, "Casey quickly made

clear that he wanted to prevent Jimmy Carter from gaining any political

advantage from the hostage crisis. The Hashemis agreed to cooperate with

Casey without the knowledge of the Carter administration." / Note #2 / Note


Casey's "intelligence operation" included the spying on the opposing

candidate that has been routine in U.S. political campaigns for decades,

but went far beyond it. As journalists like Witcover and Germond knew

during the course of the campaign, and as the 1984 Albosta committee

"Debategate" investigation showed, Casey set up at least two "October

Surprise" espionage groups.

The first of these watched the Carter White House, the Washington

bureaucracy, and diplomatic and intelligence posts overseas. This group was

headed by Reagan's principal foreign policy adviser and later NSC chairman,

Richard Allen. Allen was in touch with some 120 foreign policy and national

security experts sympathetic to the Reagan campaign. Casey helped Allen to

interface with the Bush campaign network of retired and active duty assets

in the intelligence community. This network reached into the Carter NSC,

where Bush crony Don Gregg worked as the CIA liaison man, and into Carter's

top-secret White House situation room.

Another October Surprise monitoring group was headed by Adm. Robert

Garrick. The task of this group was the physical surveillance of U.S.

military bases by on-the-ground observers, often retired and sometimes

active duty military officers. Lookouts were posted to watch Tinker Air

Force Base in Oklahoma, Andrews Air Force Base near Washington, McGuire Air

Force Base in New Jersey (where weapons already bought and paid for by the

Shah were stockpiled), and Norton and March Air Force bases in California.

Garrick, Casey, Meese, Wirthlin, and other campaign officials met each

morning in Falls Church, Virginia, just outside of Washington, to review

intelligence gathered.

This group soon became operational. It was clear that Khomeini was keeping

the hostages to sell them to the highest bidder. Bush and Casey were not

reticent about putting their own offer on the table.

Shortly after the GOP convention, Casey appears to have traveled to Europe

for a meeting in Madrid in late July with Mehdi Karrubi, a leading Khomeini

supporter, now the speaker of the Iranian Parliament. Jamshid Hashemi said

that he and his late brother Cyrus were present at this meeting and at

another one in Madrid during August, which they say Casey also attended.

The present government of Iran has declined to confirm or deny this

contact, saying that "the Islamic Government of Iran sees no benefit to

involve itself in the matter."

Casey's whereabouts in the last days of July 1980 are officially unknown.

Part of the coverup on the story has been to create uncertainty and

confusion on Casey's travels at the time. What is known is that as soon as

Casey surfaced again in Washington on July 30, he reported back to

vice-presidential candidate George Bush in a dinner meeting held at the

Alibi Club. It is certain from the evidence that there were negotiations

with the mullahs by the Reagan-Bush camp, and that Bush was heavily

involved at every stage.

In early September, Bush's brother, Prescott Bush, Jr., became involved,

with a letter to James Baker in which he described his contacts with a

certain Herbert Cohen, a consultant to the Carter administration on Middle

East matters. Cohen had promised to abort any possible Carter moves to

"politicize" the hostage issue by openly denouncing any machinations that

Carter might attempt. Prescott offered Baker a meeting with Cohen.

Sometime in fall 1980, there was a meeting at the L'Enfant Plaza Hotel in

Washington among Richard Allen, Bud McFarlane, Laurence Silberman of the

Reagan-Bush campaign, and a mysterious Iranian representative, thought to

be an emissary of Hashemi Rafsanjani, currently Iranian President and an

asset of U.S. intelligence who was then becoming one of the most powerful

mullahs in Khomeini's entourage. The Iranian representative offered a deal

whereby "he could get the hostages released directly to our campaign before

the election," Silberman recalls. (Silberman went on to become a judge in

the District of Columbia Appeals Court and led the vote in overturning

Oliver North's conviction.) Allen has claimed that he cut this meeting

short after 20 minutes. Allen, McFarlane, and Silberman all failed to

report this approach to the White House, the State Department or other


On September 22, Iraq invaded Iran, starting a war that would last until

the middle of 1988 and which would claim more than a million lives. The

U.S. intelligence estimate had been that Khomeini and the mullahs were in

danger of losing power by the end of 1980 because of their incompetence,

corruption and benighted stupidity. U.S. and other Western intelligence

agencies, especially the French, thereupon encouraged Iraq to attack Iran,

offering the prospect of an easy victory. The "easy victory" analysis was

incorporated into a "secret" CIA report which was delivered to the Saudi

Arabian government with the suggestion that it be leaked to Iraq. The real

U.S. estimate was that a war with Iraq would strengthen Khomeini against

reformers who looked to President Bani-Sadr, and that the war emergency

would assist in the imposition of a "new dark ages" regime in Iran. An

added benefit was that Iran and Iraq as warring states would be forced

vastly to increase their oil production, forcing down the oil price on the

world market and thus providing the bankrupt U.S. dollar with an important

subsidy in terms of the dollar's ability to command basic commodities in

the real world. Bani-Sadr spoke in this connection of "an oil crisis in

reverse" as a result of the Iran-Iraq war.

President Bani-Sadr, who was later deposed in a coup d'etat by Khomeini,

Rafsanjani and Beheshti, has recalled that during this period, Khomeini

decided to bet on Reagan-Bush. "So what if Reagan wins," said Khomeini.

"Nothing will really change since he and Carter are both enemies of Islam."

/ Note #2 / Note #4

This was the time of the Reagan-Carter presidential debates, and Casey's

operation had also yielded booty in this regard. Bush ally and

then-Congressman David Stockman boasted in Indiana in late October that he

had used a "pilfered copy" of Carter's personal briefing book to coach

Reagan prior to the debates.

Many sources agree that a conclusive series of meetings between the

Reagan-Bush and Khomeini forces took place in the weeks and months prior to

Election Day 1980. In late 1991, as the campaign season heated up, close to

a score of articles appeared in the U.S. press responding to Gary Sick's

"October Surprise" book, which gave credibility to the charge that the

Reagan-Bush campaign had indeed made a dirty deal with the mullahs to

prevent the release of the hostages. Even Carter, who said that he had

heard such rumors back in 1980, now agreed that a congressional

investigation would be helpful in settling the matter. President Bush and

an entire gaggle of political operatives and neoconservative journalists

denounced Sick's book and the accusation as the fantasies of "conspiracy


Sick and other journalists who published articles about the affair were

severely criticized for retailing the stories of an assortment of

intelligence informants, gun-runners, money launderers, pilots, and other

flotsam and jetsam from the seamy side of international espionage and

intrigue by pro-Bush journalists and congressional leaders opposed to

probing the accusations. Immediately after the Iran-Contra scandal made

headlines in early 1987, numerous sources surfaced and began to contact

journalists with purported eyewitness accounts of meetings between

Reagan/Bush campaign representatives and Khomeini intermediaries. Several

of the sources said they had seen Bush and Casey at meetings in Europe with

Khomeini's emissaries. Others offered bits and pieces of information

complementing the eyewitness reports.

One source, Richard Brenneke, a self-admitted money launderer and pilot for

the CIA, was indicted for perjury by a U.S. attorney in Colorado for saying

he had been told by another alleged CIA pilot, Heinrich Rupp, that he had

seen Bush in Paris in October 1980. Brenneke said that he had personally

seen Casey and Donald Gregg in Paris at the same time. But a jury acquitted

Brenneke. Later, Frank Snepp, a former CIA officer turned investigative

reporter, did an expose published in the "Village Voice", allegedly proving

that Brenneke could not have been in Paris in October 1980 because he had

obtained credit card receipts showing that Brenneke was in Oregon at the

time he had told others he had been in Paris. The original source on Bush's

secret trip to Paris was Oscar LeWinter, a German-based professional

snitch, who seems to have done some work for both the Israeli Mossad and

the CIA. LeWinter later admitted that he had been paid, allegedly by the

CIA, to spread false information about Bush and Casey's secret trips to

Europe for meetings with messengers from the mullahs.

Does that mean there is no smoking gun linking Bush to the "coincidence"

that the hostages were only released on Inauguration Day 1981, within

minutes of Reagan taking his presidential oath? No. What is clear, is that

some intelligence apparatus deployed an elaborate disinformation campaign

which created a false trail which could be discredited. The intelligence

community operation of "damage-control" is premised on revealing some of

the truth, mixed with half-truths and blatantly false facts, which allows

the bigger story to be undermined. It is possible that Bush was not in

Paris in October 1980 to meet with an Iranian delegation to seal the deal.

Bush has heatedly denied that he was in Paris at this time, and has said

that he personally did not negotiate with Khomeini envoys. But he has

generally avoided a blanket denial that the campaign, of which he was a

principal, engaged in surreptitious dealings with the Khomeini mullahs.

There is another intriguing possibility: During the same time frame that

LeWinter and Brenneke (Oct. 18-19, 1980) say Bush was in Paris, an

adversary of then-President Bani-Sadr and puppet of Khomeini, Prime

Minister Ali Rajai, was in New York preparing to depart for Algiers after

consultations at the United Nations. Rajai had refused all contact with

Carter, Muskie, and other U.S. officials, but he may have been more

interested in meeting Bush or one of his representatives. What is now well

documented is, that throughout 1980, many Reagan/Bush campaign officials

were tripping over themselves to meet with anyone purporting to be an

Iranian. If a deal were to be authenticated, there is no question that

Khomeini and crew would have sought a handshake from someone who could not

later deny the agreement.

Between October 21 and October 23, Israel dispatched a planeload of

much-needed F-4 Phantom jet spare parts to Iran in violation of the U.S.

arms boycott. Who in Washington had sanctioned these shipments? In Teheran,

the U.S. hostages were reportedly dispersed into a multitude of locations

on October 22. Also on October 22, Prime Minister Rajai, back from New York

and Algiers, announced that Iran wanted neither American spare parts nor

American arms.

The Iranian approach to the ongoing contacts with the Carter administration

now began to favor evasive delaying tactics. There were multiple

indications that Khomeini had decided that Reagan-Bush was a better bet

than Carter, and that Reagan-Bush had made the more generous offer.

Barbara Honegger, then an official of the Reagan-Bush campaign, recalls

that "on October 24th or 25th, an assistant to Stephan Halper's 'October

Surprise' intelligence operation echoed William Casey's newfound

confidence, boasting to the author in the operations center where

[Reagan-Bush Iran-watcher Michel] Smith worked that the campaign no longer

needed to worry about an 'October Surprise' because Dick [Allen] cut a

deal." / Note #2 / Note #5

On October 27, Bush campaigned in Pittsburgh, where he addressed a

gathering of labor leaders. His theme that day was the Iranian attempt to

"manipulate" the outcome of the U.S. election through the exertion of

"last-minute leverage" involving the hostages. "It's no secret that the

Iranians do not want to see Ronald Reagan elected President," Bush lied.

"They want to play a hand in the election -- with our 52 hostages as the 52

cards in their negotiating deck." It was a "cool, cynical, unconscionable

ploy" by the Khomeini regime. Bush asserted that it was "fair to ask how

come right now there's talk of releasing them [the hostages] after nearly a

year." His implication was that Carter was the one with the dirty deal.

Bush concluded that he wanted the hostages "out as soon as possible.... We

want them home and we'll worry about who to blame later." / Note #2 / Note


During the first week of December, "Executive Intelligence Review" reported

that Henry Kissinger "held a series of meetings during the week of November

12 in Paris with representatives of Ayatollah Beheshti, leader of the

fundamentalist clergy in Iran.... Top-level intelligence sources in

Reagan's inner circle confirmed Kissinger's unreported talks with the

Iranian mullahs, but stressed that the Kissinger initiative was totally

unauthorized by the president-elect." According to "EIR", "it appears that

the pattern of cooperation between the Khomeini people and circles

nominally in Reagan's camp began approximately six to eight weeks ago, at

the height of President Carter's efforts to secure an arms-for-hostages

deal with Teheran. Carter's failure to secure the deal, which a number of

observers believe cost him the November 4 election, apparently resulted

from an intervention in Teheran by pro-Reagan British circles and the

Kissinger faction." / Note #2 / Note #7 These revelations from "EIR" are

the first mention in the public record of the scandal which has come over

the years to be known as the October Surprise.

The hostages were not released before the November election, which Reagan

won convincingly. Khomeini kept the hostages imprisoned until January 20,

the day of the Reagan-Bush inauguration, and let the hostage plane take off

just as Reagan and Bush were taking their oaths of office.

Whether George Bush was personally present in Paris, or at other meetings

with Iranian representatives where the hostage and arms questions were on

the agenda, has yet to be conclusively proven. Here a thorough and

intrusive congressional investigation of the Carter and Reagan machinations

in this regard is long overdue. Such a probe might also shed light on the

origins of the Iran-Iraq war, which set the stage for the more recent Gulf

crisis. But, quite apart from questions regarding George Bush's presence at

this or that meeting, there can be no doubt that both the Carter regime and

the Reagan-Bush campaign were actively involved in dealings with the

Khomeini regime concerning the hostages and concerning the timing of their

possible release. In the case of the Reagan-Bush Iran connection, there is

reason to believe that federal crimes in violation of the Logan Act and

other applicable laws may have taken place.

George Bush had now grasped the interim prize that had eluded him since

1968: After more than a dozen years of effort, he had now become the Vice

President of the United States.


Notes for Chapter XVIII, Part 1

13. Mark Bisnow, "Diary of a Dark Horse: The 1980 Anderson Presidential

Campaign" (Carbondale: Southern Illinois University Press, 1983), p. 136.

14. For the "Nashua Telegraph" debate, see: Jeff Greenfield, "op. cit.,"

pp. 44 ff.; Mark Bisnow, "op. cit.," pp. 134 ff.; Jules Witcover and Jack

Germond, "Blue Smoke and Mirrors" (New York: Viking, 1981), pp. 116 ff.

15. Germond and Witcover, "op. cit.," p. 169.

16. "Ibid.," p. 170.

17. "Ibid.," p. 171.

18. The best testimony on this is Reagan's own response to a question from

Witcover and Germond. Asked if "it was true that he was trying to get

President Ford to run with him," Reagan promptly responded, "Oh, sure. That

would be the best." See Germond and Witcover, "op. cit.," p. 178.

19. "Ibid.," p. 188.

20. "Washington Star," July 15, 1980.

21. "EIR Special Report:" "Treason in Washington: New Evidence on the

October Surprise," March 1992.

22. See "EIR Special Report:" "Project Democracy: The 'Parallel Government'

Behind the Iran-Contra Affair" (Washington, 1987), pp. 88-101.

23. Gary Sick, "The Election Story of the Decade," "New York Times," April

15, 1991.

24. Abol Hassan Bani-Sadr, "My Turn to Speak" (New York: Brassey's, U.S.,

1991), p. 33.

25. Barbara Honegger, "October Surprise" (New York: Tudor Publishing Co.,

1989) p. 58.

26. "Washington Post," Oct. 28, 1980.

27. "Executive Intelligence Review," Dec. 2, 1980.





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