Rise of the National Security State - The CIA’s links to Wall Street
By Mark Gaffney - February 21, 2012 "
One of the most successful frauds ever perpetrated upon the American
people is the notion that the CIA exists to provide intelligence to
the president. In fact, the CIA’s intimate links to Wall Street
strongly suggest that the CIA was created to serve the perceived
interests of investment bankers. The well documented links to Wall
Street can be traced to the founding of the agency. According to
former CIA director Richard Helms, when Allen Dulles was tasked in
1946 to “draft proposals for the shape and organization of what was to
become the Central Intelligence Agency,” he recruited an advisory
group of six men made up almost exclusively of Wall Street investment
bankers and lawyers. Dulles himself was an attorney at the prominent
Wall Street law firm, Sullivan and Cromwell. Two years later, Dulles
became the chairman of a three-man committee which reviewed the young
agency’s performance. The other two members of the committee were also
New York lawyers. For nearly a year, the committee met in the offices
of J.H. Whitney, a Wall Street investment firm.
According to Peter Dale Scott, over the next twenty years, all seven
deputy directors of the agency were drawn from the Wall Street
financial aristocracy; and six were listed in the New York social
register. So we see that from the beginning the CIA was an exclusive
Wall Street club. Allen Dulles himself became the first civilian
Director of Central Intelligence in early 1953. The prevalent myth
that the CIA exists to provide intelligence information to the
president was the promotional vehicle used to persuade President Harry
Truman to sign the 1947 National Security Act, the legislation which
created the CIA. But the rationale about serving the president was
never more than a partial and very imperfect truth.
Col. L. Fletcher Prouty, an early critic of the agency, has referred
to this oft-repeated notion as “the CIA’s most important cover story.”
In his important book The Secret Team, Prouty argues that the cover
story was actually a front for the CIA’s main interest, what he calls
“fun and games,” in other words, clandestine operations.
Prouty was in a position to know the facts. For nine years, from 1955
- 1964, he served as the focal point for contacts between the CIA and
the Pentagon on matters pertaining to “special operations,”
officialese for covert activities. In this capacity Prouty worked
directly with CIA Director Dulles and his brother John Foster, who was
then Secretary of State, and also with several different Secretaries
of Defense and chairmen of the Joint Chiefs, and many other government
officials.
Col. Prouty’s work with the CIA took him to more than sixty countries
and to CIA offices, hot spots, and covert activities all around the
world.
For some reason, perhaps through an oversight, Prouty was never
required to sign a security oath, and so, was unencumbered, completely
free to write the first detailed expose of the agency, released in
1972. In his book Prouty does not mince words. He describes Allen
Dulles’ concept of intelligence as only 10% intelligence, and 90%
clandestine operations.
In another passage, he fleshes out his meaning: “the CIA is at the
center of a vast mechanism that specializes in covert operations...or
as Allen Dulles used to call it, ‘peacetime operations.’ In this
sense, the CIA is the willing tool of a higher level Secret Team, or
High Cabal, that usually includes representatives of the CIA and other
instrumentalities of the government, certain cells of the business and
professional world, and, almost always, foreign participation.”
If this sounds conspiratorial it is because Allen Dulles and his
allies on Wall Street managed to get around the law and thwart the
will of Congress. The National Security Act, which created the CIA,
included no provision for intelligence gathering or covert operations
because, as Prouty points out, the intent of Congress was for the CIA
to function as a central clearinghouse for intelligence collected by
other government departments and pre-existing intelligence agencies.
This is why Congress placed the CIA under the direct authority of the
newly created National Security Council.
But Allen Dulles and those around him wanted to take the new agency
into the shady world of clandestine operations to serve the interests
of the US financial and corporate elite, interests that in their
distorted world view were synonymous with the interests of the United
States of America. Dulles and his allies achieved their goal by
exploiting a loophole in the legislation, a catch-all provision
stating that the CIA would “perform such other functions and duties
related to intelligence affecting the national security as the
National Security Council (NSC) may from time to time direct.”
As worded, the passage grants the CIA no authority on its own to stage
operational activities, but only as instructed by the National
Security Council. Moreover, the passage “from time to time” indicates
that Congress never intended that such operations would become a full
time program. Prouty argues that the CIA and the Secret Team
immediately “tested this clause in the act and began to practice their
own interpretation of its meaning.” Unfortunately, the National
Security Council failed to live up to the role intended by Congress,
that is, to provide leadership and direction.
In part, this happened because NSC members had other full-time duties
and were not able to allocate sufficient time and energy to direct the
CIA and keep it honest. Before long, the NSC had delegated its primary
responsibilities to subcommittees, which the CIA easily captured by
packing them with its supporters through patient maneuvering and
unrelenting pressure. Soon, the NSC became a rubber stamp for a full-
time program of endless black operations.
The CIA also insinuated its supporters and agents throughout the other
branches of government: into the FAA, the Departments of State and
Defense, even within the White House. From that point on, in the words
of Prouty, the agency created “its own inertial drift….without the
knowledge of most higher level authorities.” Through the use of
organizational strategies like compartmentalization and plausible
deniability, and by limiting the flow of information to “a need to
know basis,” the CIA succeeded in keeping its covert operations, even
large ones, secret from the very government officials charged with
their oversight.
Prouty relates one instance where he briefed General Lyman L.
Lemnitzer, then chairman of the Joint Chiefs of Staff, on the subject
of the largest covert operation that the CIA had ever mounted, up to
that point. Whereupon, Lemnitzer, in shock, said to the other Chiefs,
“I just can’t believe it. I never knew that.”
Allen Dulles was up to such tricks even before becoming director. In
his voluminous history of the CIA, Legacy of Ashes, journalist Tim
Weiner describes how in 1951, while serving as deputy director of
plans (i.e. covert operations) under then CIA Director Bedell Smith,
Allen Dulles and Frank Wisner routinely stonewalled their boss about
ongoing covert projects. At the time, Wisner headed up the bland-
sounding Office of Policy Coordination, newly instituted to counter
the USSR threat in Europe. That meant staging covert operations
throughout western Europe (i.e., Operation Gladio).
Smith fumed at being kept in the dark, and was also aghast that the
CIA budget being proposed by Dulles had mushroomed eleven-fold since
1948, with most of the increase allocated for covert operations–––
three times the budget for espionage and analysis. Smith correctly
worried that “this posed a distinct danger to CIA as an intelligence
agency,” because “the operational tail will wag the intelligence dog.”
Smith was an Army General, and clashed sharply with the lawyer Dulles,
who made a habit of evading direct orders. Weiner cites the CIA’s Tom
Polger, who observed the two men trying to work together. Said Polger:
“Bedell clearly doesn’t like Dulles, and it’s easy to see why. An Army
officer gets an order and carries it out. A lawyer finds a way to
weasel…”xiv Weiner also recounts how Dulles lied to Congress to
conceal an unbroken string of failed covert operations during the
Korean war.
General Bedell Smith never succeeded in bending Dulles and Wisner to
his authority. As we know, Dwight D. Eisenhower won the 1952 election
on a platform of confronting Communism and rolling back the iron
curtain. Ike’s closest foreign policy advisor was none other than John
Foster Dulles Allen’s brother. So, when the time came for Ike to pick
his new CIA chief, it was no surprise that he tapped Allen Dulles for
the job, over Bedell Smith’s strong objections.
With the appointment of Dulles as CIA Director, the US financial elite
finally achieved through peaceful means the perversion of democracy it
had sought to achieve through a violent coup in 1934, when a cabal of
Wall Street bankers and industrialists attempted to overthrow the
presidency of Franklin Delano Roosevelt. During the 1930s, a number of
prominent individuals on Wall Street, including Prescott Bush, father
of George H.W. Bush, viewed FDR as a traitor to his class and wanted
to replace him with a fascist puppet government.
In 1934, the plotters enlisted a genuine war hero to their cause: two-
time Congressional Medal of Honor winner General Smedley Butler.
Although Butler initially appeared to go along with the conspiracy,
much to his credit, the general remained loyal to the Constitution and
ultimately alerted Congress to the plot.
The attempted coup against FDR failed, but the bankers’ moment finally
arrived after World War II with the onset of the Cold War. The Red
Menace was made-to-order for Wall Street. The international threat of
communism, real or imagined, was the perfect rationale for a national
security apparatus with the power to undermine and trump our
democracy. Along with this went the systematic manipulation of public
opinion through mass propaganda and spin.
In 1947, the “War Department” was re-christened the “Defense
Department.” That same year, the English writer George Orwell sat down
to finish his dystopian masterpiece 1984. In it Orwell prophetically
describes a fictional world-turned-upside-down that has since become
all too real. Words and expressions coined by Orwell, like “Big
Brother”, “Newspeak”, “Ignorance is Strength“, “Freedom is Slavery”,
“War is Peace”, even the term “Orwellian,” have since become integral
to our language.
Truman lived to regret his role in creating a monster. One month to
the day after the murder of JFK in Dallas, the elder statesman posted
a letter in the Washington Post, in which he addressed the nation. In
the letter Truman explained that he had set up the CIA to provide raw
intelligence to the office of the president, but that in practice
things had turned out very differently. Truman wrote that
“I think it has become necessary to take another look at the purpose
and operations of our Central Intelligence Agency…..For some time I
have been disturbed by the way CIA has been diverted from its original
assignment. It has become an operational and at times a policy-making
arm of the Government. This has led to trouble and may have compounded
our difficulties in several explosive areas.
I never had any thought that when I set up the CIA that it would be
injected into peacetime cloak and dagger operations. Some of the
complications and embarrassment I think we have experienced are in
part attributable to the fact that this quiet intelligence arm of the
President has been so removed from its intended role that it is being
interpreted as a symbol of sinister and mysterious foreign intrigue…
there are now some searching questions that need to be answered.
I, therefore, would like to see the CIA be restored to its original
assignment as the intelligence arm of the President….and that its
operational duties be terminated or properly used elsewhere. We have
grown up as a nation, respected for our free institutions and for our
ability to maintain a free and open society. There is something about
the way the CIA has been functioning that is casting a shadow over our
historic position and I feel that we need to correct it.”
Truman’s line about the CIA “casting a shadow over our historic
position” may have been a thinly-veiled reference to the assassination
of President John F. Kennedy in Dallas, exactly one month before, an
assassination which new research suggests was a CIA operation
conducted with the cooperation of Chicago mobsters. It is quite
possible that by December 1963 Truman had privately reached the same
conclusion.
But he may also have been referring to the CIA’s many inglorious
foreign policy disasters in the Mideast, Latin America, and Southeast
Asia, about which the aging Truman surely must have been painfully
aware. The most obvious example, of course, was the Bay of Pigs fiasco
in 1961 that led to the 1962 Cuban missile crisis which brought the
world to the brink of nuclear Armageddon. Another was the CIA’s 1953
plot to overthrow the popular and democratically elected leader of
Iran, Mohammad Mossadegh, and replace him with the dictatorial Shah,
the fallout from which continues to bedevil geopolitics, many years
later.
No example of US treachery has ever done more harm to American
prestige, world wide, than the CIA’s destruction of the fledgling
Iranian democracy. At the time, Iran was friendly to the West and a US
ally. During World War II, Iran had played a key role in US efforts to
resupply the Soviet Union and prevent a Nazi victory on the eastern
front. Yet, the US repaid Tehran with betrayal. And there are many
other examples.
It appears that Truman’s successor, Dwight D. Eisenhower, despite his
eminent role as Cold Warrior, may also have learned to distrust the
CIA over the course of his two terms, during which the CIA often kept
him in the dark, when they were not actively manipulating him. There
is some evidence that the CIA even went so far as to wreck
Eisenhower’s scheduled 1960 peace summit with Nikita Khrushchev by
secretly arranging for the Soviets to shoot down an American U-2
surveillance plane piloted by Gary Powers.
The incident not only embarrassed Eisenhower, it also caused renewed
hostility between Washington and Moscow at the very moment when a thaw
in the Cold War seemed within reach. Like the murder of JFK, three
years later, the U-2 incident is suspicious and may have been a
calculated move by CIA hardliners. Such a dark possibility may even
have motivated Eisenhower to warn the American people in 1961 about
the growing threat to democratic institutions posed by “the military-
industrial complex.”
But while most Americans have at least heard of Ike’s famous warning,
delivered in his final address to the nation, by contrast, Truman’s
remarkable letter has been forgotten. No doubt, the letter ruffled
some powerful feathers, because, later that day, it was mysteriously
yanked from subsequent editions of the Post.
As we now know, by the early 1960s, the CIA had enlisted many
frontline journalists for undercover work. Estimates of how many range
from 50 to 400, or more. But the exact number is less important than
the confirmed fact that selected journalists at every major US
magazine and newspaper, including the Post, were on the CIA payroll,
in sufficient numbers to leak disinformation into the media and
deceive the American people on a range of issues. The willing CIA
operatives were only too happy to plant phony “news” or, as in the
case of Truman’s letter, to make troublesome stories disappear. One or
two phone calls from Langley probably did the trick.
There was no follow up in the press regarding the Truman letter, not
in subsequent weeks, months, or years. None of Truman’s biographers
mention it, probably because they did not even know about it. This
includes David McCullough, author of the 1992 bestseller, Truman,
which won the Pulitzer Prize and has been called “the most thorough
account of Truman’s life yet to appear.” Thorough, perhaps, but not
thorough enough. I searched McCullough’s account in vain for any
mention of the 1963 letter. Soon after it appeared in print, Truman’s
letter vanished down an Orwellian memory hole and nearly disappeared
from human consciousness.
It is noteworthy that the original edition of Prouty’s pathbreaking
CIA expose, The Secret Team, suffered a similar fate. In 1975, on
hearing from a professor acquaintance that forty copies of his book
had inexplicably vanished from the shelves of a university library,
Prouty visited the Library of Congress in Washington to see if the
book was still in the stacks where he had seen it on a previous visit.
Not only was it missing, the book was no longer even listed in the
library card catalogue. Someone had expunged every trace of its
existence. Until the occasion of its re-publication in 2011, The
Secret Team remained, in Prouty’s words, “an official non-book.”
Shades of Orwell.