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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. This is typical of
the massive favors and graft for pro-Bush financier interests at the
expense of the taxpayer which are the hallmark of the Bush machine.
Lawrence Gibbs also approved IRS participation in the October 6, 1986
federal-state police raid against premises and persons associated with the
political movement of Lyndon H. LaRouche in Leesburg, Virginia. This raid
was a leading part of the Bush machine's long term effort to eliminate
centers of political opposition to Bush's 1988 presidential bid. And
LaRouche had been a key adversary of Bush dating back to the 1979-80 New
Hampshire primary campaign, as we will shortly document.

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: The LaRouche Factor

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. That
the issue exploded in New Hampshire during the 1979-80 campaign in such a
way as to wreck the Bush campaign was largely the merit of Lyndon LaRouche,
who had launched an outsider bid in the Democratic primary.

LaRouche conducted a vigorous campaign in New Hampshire during late 1979,
focusing on the need to put forward an economic policy to undo the
devastation being wrought by the 22 percent prime rate being charged by
many banks as a result of the high-interest, usurious policies of Paul
Volcker, whom Carter had made the head of the Federal Reserve. But in
addition to contesting Carter, Ted Kennedy and Jerry Brown on the
Democratic side, LaRouche's campaign also noticed George Bush, whom
LaRouche correctly identified as a liberal Republican in the Theodore
Roosevelt-House of Morgan "Bull Moose" tradition of 1912.

During late 1979, the LaRouche campaign began to call attention to Bush as
a threat against which other candidates, Republicans and Democrats, ought
to unite. LaRouche attacked Bush as the spokesman for "the folks who live
on the hill," for petty oligarchs and blue bloods who think that it is up
to them to dictate political decisions to the average citizen. These
broadsides were the first to raise the issue of Bush's membership in David
Rockefeller's Trilateral Commission and in the New York Council on Foreign

While on the hustings in New Hampshire, LaRouche observed the high
correlation between preppy, liberal Republican, blue-blooded support for
Bush and mental pathology. As LaRouche wrote, "In the course of campaigning
in New Hampshire during 1979 and 1980, I have encountered minds, especially
in western New Hampshire, who represent, in a decayed sort of way, exactly
the treasonous outlook our patriotic forefathers combatted more than a
century or more ago. Naturally, since I am an American Whig by family
ancestry stretching back into the early 19th century, born a New Hampshire
Whig, and a Whig Democrat by profession today, the blue-blooded kooks of
certain 'respected' Connecticut River Valley families get my dander up." /
Note #9

LaRouche's principal charge was that George Bush was a "cult-ridden kook,
and more besides." He cited Bush's membership in "the secret society which
largely controls George Bush's personal destiny, the Russell Trust
Association, otherwise known as 'Skull and Bones'.... Understanding the
importance of the Russell Trust Association in Bush's adult life will help
the ordinary citizen to understand why one must place a question mark on
Bush's political candidacy today. Is George Bush a 'Manchurian candidate'?"

After noting that the wealth of many of the Skull and Bones families was
derived from the British East India Company's trade in black slaves and in
opium, LaRouche went on to discuss "How Yale Turned 'Gay'|":

"Today, visiting Yale, one sees male students walking hand in hand, lovers,
blatantly, on the streets. One does not permit one's boy children to visit
certain of the residences on or around that campus. There have been too
many incidents to be overlooked. One is reminded of the naked wrestling in
the mud which initiates to the Yale Skull and Bones Society practice. One
thinks of 'Skull and Boneser' William F. Buckley's advocacy of the
dangerous, mind-wrecking substance, marijuana, and of Buckley's recent,
publicly expressed sympathies for sodomy between male public school
teachers and students....

"As the anglophile commitments [of the blue-blooded families] deepened and
decayed, the families reflected this in part by a growth of the incidence
of 'homosexuality' for which British public schools and universities are
rightly notorious. Skull and Bones is a concentrated expression of that
moral and intellectual degeneration."

LaRouche pointed out that the symbol of Skull and Bones is the skull and
crossbones of the pirate Jolly Roger with "322" placed under the
crossbones. The 322 is thought to refer to 322 B.C., the year of the death
of the Athenian orator Demosthenes, whom LaRouche identified as a traitor
to Athens and an agent provocateur in the service of King Philip of
Macedonia. The Skull and Bones ceremony of induction and initiation is
modeled on the death and resurrection fetish of the cult of Osiris in
ancient Egypt. LaRouche described the so-called "Persian model" of
oligarchical rule sought by Skull and Bones:

"The 'oligarchical' or 'Persian' model was what might be called today a
'neo-Malthusian' sort of 'One World' scheme. Science and technological
progress were to be essentially crushed and most of the world turned back
into labor-intensive, 'appropriate' technologies. By driving civilization
back toward barbarism in that way, the sponsors of the 'oligarchical model'
proposed to ensure the perpetuation of a kind of 'one world' rule by what
we would term today a 'feudal landlord' class. To aid in bringing about
that '"One World Order",' the sponsors of the project utilized a variety of
religious cults. Some of these cults were designed for the most illiterate
strata of the population, and, at the other extreme, other cults were
designed for the indoctrination and control of the ruling elite themselves.
The cult-organization under the Roman Empire is an excellent example of
what was intended."

LaRouche went on: "Skull and Bones is no mere fraternity, no special alumni
association with added mumbo-jumbo. It is a very serious, very dedicated
cult-conspiracy against the U.S. Constitution. Like the Cambridge Apostles,
the initiate to the Skull and Bones is a dedicated agent of British secret
intelligence for life. The fifteen Yale recruits added each year function
as a powerful secret intelligence association for life, penetrating into
our nation's intelligence services as well as related high levels of
national policy-making.

"Representatives of the cult who have functioned in that way include
Averell Harriman, Henry Luce, Henry Stimson, Justice Potter Stewart,
McGeorge Bundy, Rev. William Sloane Coffin (who recruited William F.
Buckley), William Bundy, J. Richardson Dilworth, and George Bush ... and
many more notables. The list of related Yalies in the history of the CIA
accounts for many of the CIA's failures and ultimate destruction by the
Kennedy machine, including the reason Yalie James Jesus Angleton failed to
uncover H. 'Kim' Philby's passing of CIA secrets to Moscow.

"Now, the ordinary citizen should begi n to realize how George Bush became
a kook-cultist, and also how so incompetent a figure as Bush was appointed
for a while Director of Central Intelligence for the CIA....

"On the record, the ordinary citizen who knew something of Bush's policies
and sympathies would class him as a 'Peking sympathizer,' hence a Communist

Focusing on Bush's links with the Maoist regime, LaRouche stressed the
recent genocide in Cambodia: "The genocide of three out of seven million
Cambodians by the Peking puppet regime of Pol Pot (1975-78) was done under
the direction of battalions of Peking bureaucrats controlling every detail
of the genocide -- the worst genocide of the present century to date. This
genocide, which was aimed especially against all merely literate Cambodians
as well as professional strata, had the purpose of sending all of Southeast
Asia back into a 'dark age.' That 'dark age' policy is the policy of the
present Peking regime. That is the regime which Kissinger, Bush and
Brzezinski admire so much as an 'ally'....

"The leading circles of London have no difficulty in recognizing what
'Peking Communism' is. It is their philosophy, their policy in a Chinese
mandarin culture form. To the extent that Yalies of the Skull and Bones
sort are brought into the same culture as their superiors in London, such
Yalies, like Bush, also have deep affection for 'Peking Communism.'

"Like Bush, who supports neo-Malthusian doctrines and zero-growth and
anti-nuclear policies, the Peking rulers are dedicated to a 'one world'
order in which the population is halved over the next twenty years (i.e.
genocide far greater than Hitler's), and most of the survivors are driven
into barbarism and cultism under the rule of parasitical blue blood
families of the sort represented in the membership of the Skull and Bones.

"In that sense, Bush is to be viewed without quibble as a 'Manchurian
candidate.' From the vantage point of the U.S. Constitution and American
System of technological progress and capital formation, Bush is in effect
an agent of the same evil philosophies and policies as the rulers of

"That, dear friends, is not mere opinion; that is hard fact." / Note #1 /
Note #0

This leaflet represented the most accurate and devastating personal and
political indictment Bush had ever received in his career. It was clear
that LaRouche had Bush's number. The linking of Bush with the Cambodian
genocide is all the more surprising, since most of the evidence on Bush's
role was at that time not in the public domain. Other aspects of LaRouche's
comments are prophetic: Bush's "deep affection" for Chinese communism was
to become an international scandal when Bush maintained his solidarity with
Deng Xiaoping after the Tiananmen massacre of 1989. Outstanding is
LaRouche's reference to the 'One World Order' which the world began to
wonder about as the 'New World Order' in the late summer of 1990, during
the buildup for Bush's Gulf war; LaRouche had identified the policy content
of the term way back in 1980.

Bush's handlers were stunned, then enraged. No one had ever dared to stand
up to George Bush and Skull and Bones like this before. The Bush entourage
wanted revenge. A vote fraud to deprive LaRouche of virtually all the votes
cast in the Democratic primary, and transfer as many of them as possible to
the Bush column, would be the first installment. Later, Gary Howard and Ron
Tucker, two agents provocateur from Midland, Texas, were dispatched to try
to infiltrate pro-LaRouche political circles. From 1986 on, Bush would
emerge as a principal sponsor of a judicial vendetta by the Department of
Justice that would see LaRouche and several of his supporters twice
indicted, and finally convicted, on a series of trumped-up charges. One
week after George Bush's inauguration as President, his most capable and
determined opponent, Lyndon LaRouche, would be thrown into federal prison,
where he remains to this day.

But in the New Hampshire of 1979-80, LaRouche's attacks on Bush brought
into precise focus many aspects of Bush's personality that voters found
profoundly distasteful. LaRouche's attack sent out a shock wave, which, as
it advanced, detonated one turbulent assault on Bush after the other.

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
Bush. It was the LaRouche campaign which demonstrated to Loeb long before
the Iowa caucuses that Bush was the main rival to Reagan, and therefore the
principal target. As a result, Loeb would launch a barrage of slashing
attacks on Bush.

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.

9. See Lyndon LaRouche, "Is Republican George Bush a 'Manchurian
Candidate'?" issued by Citizens for LaRouche, Manchester, New Hampshire,
Jan. 12, 1980.

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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