Chapter Twenty-two

Join the Spooks and Stay Out of Jail

It would be all too easy to say that Frankhouser's manipulation of the LaRouchians proves them to be a band of naive kooks. Undeniably, top NCLC security staffers believed Frankhouser's tall tales. But the idea that LaRouche himself completely shared his followers' gullibility ignores his ability to operate on both rational and irrational levels at once. Again and again, he has given vent to paranoia and delusions of grandeur, only to end up achieving useful pragmatic results from such behavior. He attacked Kissinger in an apparently demented way, but reaped the reward of sympathy on the ultraright, greater fanaticism among his followers, and a fearsome reputation among liberals. He accused a vast range of enemies of plotting to assassinate him during the Chris White affair, but also used the episode to consolidate his control of the NCLC.

Such behavior is not unlike that of many totalitarian leaders in whom madness and cunning have mingled inextricably. The seemingly paranoid Stalin accepted as truth the preposterous stories of his secret police about spies and saboteurs, but slyly used these concoctions to strengthen his power. It is easier to see this in a Stalin or Hitler, because they operated on a grand scale whereas LaRouche has been confined to a small stage.

LaRouche is quite aware of this type of slyness. In two essays on Soviet history written in the mid-1970s, he discussed Stalin's "hysterical" and "propitiatory" beliefs--his "nonsense-theses"--and how they were basically an "expediency" that enabled Stalin to handle his own neuroses while getting other people to do his bidding. Stalin's incessant discovery of plots was a matter of "fantastic lying"; it worked because of the "wishful credulousness" of the Communist rank and file. At certain moments, Stalin "might have reached the point of almost believing his own rhetoric," but remained in touch with the "contrary knowledge" within himself (i.e., the knowledge that his rhetoric was ultimately just a manipulative device). LaRouche argued (in effect) that Stalin's craziness served his cunning in the interests of consolidating his power. In his own behavior, LaRouche carried out a refined version of the formula: Craziness serves cunning in the interests of staying out of legal trouble if you're too weak to seize power.

All this is well exemplified in his relationship with Frankhouser. From the very beginning in 1976-77, there were pragmatic reasons for LaRouche to accept and promote Frankhouser’s "fantastic lying," whether or not he believed it. The NCLC had begun its first wave of white-collar scams: kiting checks, welching on loans, taking advantage of wire-transfer errors in order to rip off banks, filing fraudulent matching-funds applications with the Federal Election Commission. This was low-level stuff, but it was more than enough to make anyone nervous who had never before engaged in illicit activity. LaRouche began to speculate at that point on how criminals gain immunity from prosecution. The key, he suggested in mid-1977, was to become useful to the CIA. His apparent model was Mitch WerBell: An early 1977 NCLC internal report on WerBell showed that the LaRouchians firmly believed the CIA and other intelligence agencies had helped him out of legal difficulties on several occasions.

But LaRouche believed the successful use of this tactic hinged on the relationship of forces within the CIA or another protecting agency. He taught that the CIA was divided into opposing factions. The pro-"humanist" faction might protect a WerBell or a LaRouche, but what if the anti-"humanist" faction were in charge? LaRouche had the example of WerBell’s 1975 indictment, when the Company didn't look after him. (We will examine this case later.) He also had the example of Frankhouser's indictment for transporting stolen explosives while working for the ATF. Both Mitch and Roy, and Bob Miles too, had been "hung out to dry" by antihumanist spooks (so the LaRouchians argued). What do you do when the antihumanists are out to get you? Or when the charges are so serious that even your allies can't intercede for you?

The answer is to adopt the "national-security defense" (also known as the "CIA defense"). Whatever you're charged with, blame it on the CIA or the White House. Say you thought you were following secret orders from high up and/or that you were framed because you knew too much about embarrassing operations. If you can prove you've ever been involved with the CIA, many people will believe the rest of your story. Possibly even the jury will go for it. LaRouche apparently figured this tactic had worked for WerBell in his smuggling trial (backed up by the fortuitous death of the government's key witness) and that it may have helped Frankhouser avoid a prison sentence in the stolen-dynamite trial.

But both WerBell and Frankhouser could establish that they had, indeed, worked for the intelligence or law enforcement community in some fashion. LaRouche built a comparable record for himself. First, he offered the CIA his services and did everything he could to be useful (so they would want to protect him). Second, he compiled a detailed record of dealings with presumed agents. If he had to go into court, he could use this record to establish that whatever he did was done under CIA orders, at arm's length if not directly.

For the purpose of the CIA defense, it is not altogether necessary that one's dealings be directly with the CIA (since the agency won't reveal the identity of its agents anyway). The important thing is simply what a jury will believe. Thus, if one doesn't have a connection with real agents, one might as well use ex-agents, suspected agents, or even make-believe agents whom one can then staunchly maintain are real agents. Hence, the large number of spookish consultants, including Frankhouser, that LaRouche surrounded himself with.

Frankhouser and Fick both tell a revealing story about this. They would go to the Leesburg mansion to brief LaRouche on the latest scoop from the Source, but he never seemed interested. "He really didn't want to listen, he just wanted a captive audience," Frankhouser said. "Five minutes into the briefing, he'd cut us off and change the subject, doing most of the talking himself. He'd go into these amazing monologues, for hours, talking about a . . . lost civilization." Apparently LaRouche knew on some level that the reports were worthless, but went through the motions of meeting with Frankhouser and Fick anyway to build his record for his future CIA defense. (In 1987-88 his lawyers would tell the court in Boston that the LaRouche organization sincerely believed Frankhouser and Fick worked for the CIA.) Meanwhile, LaRouche would acquiesce in Roy's deceiving of his own Security staffers, since they would work twice as hard if they thought they were involved in deep operations with real cutouts and real spooks. In other words, while Roy thought he was scamming LaRouche, it appears that the NCLC chairman had actually figured out a way to get his money's worth out of Roy--by using him to keep the Security staff brainwashed.

Documents filed by LaRouche's attorneys prior to his 1988 Boston criminal trial shed much light on his multileveled approach to using alleged CIA connections to stay out of jail. First, they reveal that in early 1982 he was definitely thinking in terms of gaining outright immunity via CIA intervention. At the time he had special reasons for anxiety. Several civil fraud suits were pending, the Federal Election Commission was probing his campaign finances, and a New York bankruptcy court judge had ordered an investigation of the NCLC's alleged looting of a computer software firm. Furthermore, the Detroit NCLC, including several people with detailed knowledge of the NCLC's ties to organized crime, had resigned en masse. Frankhouser suddenly popped up with a proposal from Mister Ed: In return for LaRouche's not exposing an alleged CIA involvement in the Detroit defections, LaRouche and his loyalists would be given immunity from federal prosecution for any events occurring prior to January 1982. Their immunity status supposedly would be worked out personally between the CIA director and the Attorney General!

Doubtless this plan was a hoax, but it suggests that Frankhouser and/or Mister Ed had picked up on LaRouche's earlier writings on the CIA/immunity question. As to the request that LaRouche shut his mouth about Detroit, this had a real basis. He was engaging at the time in indiscreet talk about the NCLC's Teamster/racketeer connections and an alleged joint venture in the financial printing industry. Many people would have wanted to use the "Mister Ed" channel to quash such talk (for instance, Bob Miles, who knew many Michigan Teamsters from the days when he handled their insurance). The suggestion that LaRouche keep quiet about CIA involvement in Detroit can therefore be read as a reference to mob involvement.

In the early 1980s, LaRouche appeared to have built a strong first line of defense by making himself genuinely useful to the intelligence community and the Reagan administration. He had personally met with Inman and several NSC officials. Yet he was not satisfied. In 1983 he requested a meeting at Langley with Inman's successor, John McMahon. Granted a half hour with two of McMahon's aides, he arrived like a head of state with Helga and an entourage of assistants and bodyguards. According to a CIA report on the meeting filed in Boston federal court, he had promised to reveal information on "drug trafficking, gunrunning, and terrorism," But instead of delivering the information promised, LaRouche came bearing a strange proposal for a mutually beneficial "continuing relationship" (i.e., regular meetings with no cutouts) between his organization and the CIA. He boasted of his good sources in the French presidential palace and among Spain's "old crowd." The CIA official (name redacted) who wrote the report was not impressed.

What was really going on here? LaRouche had a dozen channels for his "continuing relationship'' without embarrassing either the CIA or his own followers. They had kept up contact with Inman after he left the CIA, and WerBell was still friendly. Why should LaRouche show up on Langley's doorstep begging for what was not necessary and, if obtained, would only undermine his value in the realm of arm's-length intelligence operations? One could say it was his vanity or his hunger for life in the Inner Ring, but a more tangible motive may also have been involved. At the time, his organization was embarking on risky new fund-raising practices, such as the nationwide solicitation of allegedly fraudulent loans from senior citizens. Being indirectly useful to the CIA might not be enough to prevent indictments. The LaRouchians needed a record of direct dealings with the agency that would allow them to claim in court that they were a genuine "proprietary" following the orders not just of a cutout but also of high-ranking agency officials. More important, they needed leverage to force the CIA to protect them. What better weapon than the ability to hold a press conference at any time and "prove" the CIA was behind them? LaRouche believed this could create major problems for the CIA and within the executive branch generally. In his 1987 review of Bob Woodward's Veil, LaRouche said that if Casey had ever met with him and knowledge of the meeting had leaked out, the result would have been a "major political explosion." The request he delivered to McMahon's aides apparently was an attempt to plant just such a bomb.

How could LaRouche believe in 1983 that the CIA would fall into his trap? First, he was not as controversial then as before or since. Almost four years had passed since any major media had exposed him. His publications had become more artful in masking the NCLC's anti-Semitism, and Reagan administration officials who met with NCLC members in 1982-83 didn't seem worried about any fallout. Second, LaRouche had the example of Admiral Inman, who had compromised himself by agreeing to a seemingly unnecessary meeting with LaRouche while still CIA deputy director. Third, LaRouche knew that although some CIA officials might consider him embarrassingly extreme, several of his followers were respected for their intelligence analyses. (For instance, one of them gained consulting work from a prestigious Washington risk-analysis firm after defecting.) Fourth, the NCLC indeed had international sources such as LaRouche alluded to in the Langley meeting: He proved his boast about high-level French contacts by publishing a certain purloined letter a few months later. Given these factors, it was not beyond the realm of possibility for the CIA to decide to give LaRouche regular meetings as an easy concession to keep the flow of information coming.

The CIA did not accept LaRouche's proposal, being either too smart or too careful. But if the CIA had agreed to give LaRouche regular meetings or some kind of quasi-proprietary status, the consequences would have been interesting indeed. He would have had a much stronger "CIA defense" in his 1988 trial, and he also could have exerted real pressure on the CIA to rescue him prior to the indictments. For instance, he could have threatened to create havoc regarding the February 1986 assassination of Swedish Prime Minister and longtime LaRouchian smear target Olof Palme. Shortly after the Palme hit, Swedish police arrested a suspect who was identified as a LaRouche follower (although LaRouche denied it). Lacking sufficient evidence to indict this suspect, the Swedish authorities embarked on a wide-ranging probe of possible LaRouchian involvement. (For at least two years, the LaRouchians remained under investigation, although in December 1988 a suspect totally unrelated to them was arrested.) If LaRouche had gained his "continuing" CIA relationship, he would have been in a position to bring automatic suspicion on the CIA for involvement in Palme's death. False as the impression might have been, anti-American and pro-nuclear disarmament forces in Western Europe could have used it. Although LaRouche's followers claim to be pro-NATO, they would have justified the leftist propaganda bonanza as being necessary to save LaRouche, who in their view is more important to NATO than a bunch of missiles anyway.

Much of the above is hypothetical (a hypothesis of the higher hypothesis, as LaRouche would say). But it is revealing to look at what happened when the Boston indictments came down. First, the LaRouchians retained Washington attorney Bernard Fensterwald who had previously represented Ed (the CIA made me do it) Wilson, James Earl (the FBI made me do it) Ray, James (Nixon made me do it) McCord, Mitch (the DEA made me do it) WerBell, as well as the former employees of Task Force 157, a kind of predecessor to the NCLC in the parallel-CIA game. The LaRouchians then began to put together their "CIA defense" in detail. They couldn't directly prove they were acting under CIA control, but they could present a circumstantial case by simply describing their wide dealings with all kinds of people in, around, and on the fringes of the intelligence community, (They also could lay out dozens of conflicting conspiracy theories to confuse the jury and the press, with each of these theories the pretext for one or more of the scores of delaying motions filed by their virtual army of defense attorneys.)

A sanitized form of LaRouche's CIA defense was filed with the court "under seal" (pursuant to the Classified Information Procedures Act) by Fensterwald's law partner, Daniel S. Alcorn. Although full of details about the antics of Frankhouser and Fick, the twenty-six-page report curiously neglected to mention Mitch WerBell, Admiral Inman, James Angleton, Ray Cline, Paul Corbin, Danny Murdock, Barney Cochran, Walt Mackem, Tom Miner, Lucien Conein, or numerous other interesting contacts. Nor did it mention any of the alleged meetings of LaRouche underlings with CIA officials that they had boasted about to their NSC contacts.

Loudoun Times-Mirror reporter Bryan Chitwood thinks that LaRouche was doing a limited hangout. To use Eric Ambler's terminology, he was using his play material and signaling that if he didn't get relief fast he'd lay out something a bit heavier. Indeed, the report listed certain more sensitive matters that might be "raised during the course of Boston litigation" relating to "direct channels" between the CIA and the LaRouchians. What was briefly described appeared to be halfway between play material and reality. A bluff? Among the revelations promised was a detailed account of Jeffrey Steinberg's dealings with the Guatemalan Army and his alleged official debriefings by "CIA, Department of Defense, Drug Enforcement Administration, Joint Special Operations Command, Fort Bragg, N.C., and an official of the Vice President's National Narcotics Border Interdiction Service." Also promised was the history of the NCLC's alleged dealings with Colonel Frank Salcedo, an official at the time with the Federal Emergency Management Agency. Since FEMA, headed in the early 1980s by right-wing cronies of Ed Meese, already was known for its contingency plans for a martial-law America in event of nuclear attack, this promised to be fun indeed. The LaRouche legal brief said that the defendants had presented FEMA with a "series of proposals for the establishment under FEMA of a special government intelligence organization at the direct service of the President," apparently a kind of Meesean precursor of Oliver North's Project Democracy. Next, the LaRouchians promised to tell the full story of their relationship with the National Security Council and of how Judge Clark had supposedly been provided with "written reports and paraphrase transcripts" of LaRouchian meetings with Soviet officials "as per guidelines from 'E'" (Mister Ed).

The under-seal document was sent to the CIA and FBI, which both approved its release (not surprising, considering that the LaRouchians had precensored it themselves). The Justice Department, not wanting to give even the appearance of credibility to LaRouche's national security defense, made copies and passed them out to reporters under the eyes of stunned LaRouchians.

But this was by no means the end of the defendants' obfuscation. They knew that the NCLC's dealings with the intelligence community had left a paper trail and that some people in government were intensely suspicious of them. All they had to do was use subpoenas and the Freedom of Information Act to uncover incidents in which various officials had suggested that they be investigated. Indeed, they had been collecting FOIA documents for years, such as Henry Kissinger's letters to the FBI when NCLC members were harassing him. They could weave such items into a pastiche to "prove" a vast government conspiracy against them. LaRouche, like Roy in 1975, would emerge as an Agent Hung Out to Dry. Naturally they went after the documents in Oliver North's safe. Since they had begun exposing Irangate six months before anyone else, it was reasonable to assume North would have taken at least a passing interest in them. Sure enough, a memo from General Richard Secord to North was found: "Lewis has met with FBI and other agency reps. . . .Our man here claims Lewis has collected info against LaRouche." Lewis, it turned out, was Fred Lewis, a former Army sergeant major who had served in a Delta Force counter-intelligence unit in the late 1970s and whose resume said that he was "skilled in special sensitive low visibility operations."

Just what any of this had to do with alleged credit-card fraud at Boston airports was unclear, but it helped the LaRouchians drag out the trial and embarrass the prosecutors. When the defense attorneys demanded all CIA and FBI documents relevant to the case, the agencies were naturally reluctant to turn over materials that might compromise their security or simply set a dangerous precedent for future discovery motions in other cases. Thus they turned over some documents, withheld others, and simply failed to identify others because of the vast number of files that had to be searched. (Any half-clever defense attorney could have predicted this.) The prosecution had little choice but to accept the FBI's and CIA's solid assurances that they had fully complied with the discovery motions. Meanwhile the LaRouchians used the FOIA and various forms of snooping to turn up more documents (for instance, the one from North's safe). This created the appearance that the U.S. Attorney's office was involved in a cover-up. Relations between the FBI and the prosecutors became tense, with the LaRouchians demanding more documents and the FBI wanting to withhold one document even at the cost of jeopardizing the entire trial. (Strangely, the contents of this document were almost certainly innocuous.) The chief prosecutor, John Markham, asked to withdraw from the case during this altercation but later relented. The trial was held up for weeks while a search was conducted for more and more documents. The LaRouchians wanted millions of documents searched. Some of the press, smelling CIA blood, was verging on sympathy for LaRouche, and articles about the trial focused on North rather than credit-card fraud.

By this point the trial had dragged on for five months, and promised to continue for at least six more. Several jurors complained of grievous hardship, and Judge Keeton declared a mistrial. The Boston Globe subsequently quoted three jurors as saying they would have voted for acquittal, based on the government's withholding of evidence. (In a memorandum and order the following August, Judge Keeton delivered what in effect was a stinging rebuke to the Reagan administration regarding the disclosure problem. The prosecutors, he said, had been "limited in their ability to fulfill [their disclosure] responsibility by lack of adequate support and assistance both within and beyond the United States Attorney's office.")

Meanwhile, LaRouche, having planted doubts about the government's motives, came out with an accusation that best revealed his foresight in dealing with dubious former federal agents and/or informants through the years. Having once warmly welcomed them onto his payroll, he now depicted them as government moles who had intended all along to set him up. Ryan Quade Emerson, the Virginia-based publisher of a counterterrorist newsletter, proved to be the most useful example. In 1985, after the federal investigation had begun, the LaRouchians hired him as a part-time consultant. They knew he had once been an FBI informant, and they gave him $250 a week to tell them things they already knew. Bryan Chitwood, who has followed the investigation and trial more closely than any other reporter, states flat-out that "the LaRouchians were setting a trap." Indeed, it was inevitable that the FBI would get in touch with Emerson. After he stopped working for the LaRouchians, he even made a visit to their offices at the FBI's request. Although he had not functioned as an FBI plant while on the NCLC payroll, his murky activities gave the LaRouchians a wedge to suggest government misconduct. "They used it to foul up the trial pretty well," said Chitwood. "They knew exactly what they were doing."

But during all the legal maneuverings in 1987-88, there was one factor LaRouche underestimated: The "CIA defense" is useful only if the judge rules it admissible. Markham, however, submitted a brief attacking the CIA defense at the root by pointing out that the CIA is not a domestic law enforcement agency. It has no power to grant immunity to citizens who commit crimes in furtherance of a criminal investigation. LaRouche's relationship to the CIA thus should be deemed irrelevant to the charges of obstructing justice and credit-card fraud. Concurring with this argument. Judge Keeton ruled that LaRouche's carefully prepared folderol about the CIA was inadmissible.

Probably the LaRouchians should have tried to pin things on a domestic law enforcement agency from the beginning, as Jackie Presser did with the FBI and Mitch WerBell with his alleged White House drug busters. But when the LaRouchians went back into court claiming they had been mistaken--that the evil force hanging them out to dry was really the FBI, not the CIA--it was too late. Judge Keeton wouldn't buy it.

No matter how much credit one gives to LaRouche’s calculated maneuvers, there remains a substratum of naiveté in his dealings with both the real and make-believe intelligence networks around him. In part this was a result of his conspiratorial view of history, which ascribes exaggerated powers to intelligence agencies in general and the CIA in particular/ LaRouche appears to have really believed that the CIA director, if he wanted to, could simply pick up the telephone and tell the Attorney General's office to "quash" an investigation of LaRouche.

Also, LaRouche apparently believed at least a portion of the tips from Frankhouser and even more of the tips from the "General" and the "Major." But in this gullibility he was not unique. In the demimonde of informers, spies, cutouts, and control officers, even seasoned professionals get taken for a ride (for instance, ATF agent Slamon by Frankhouser in 1972). While Frankhouser and Fick were feeding reports from imaginary sources to the LaRouche organization in the early 1980s, an immigrant from El Salvador named Frank Varelli was running an even more elaborate scam on top FBI officials. Spinning tales of terrorist plots in return for $18,000 and a new car, he sucked the FBI into a five-year investigation involving thousands of man-hours in fifty-two of the FBI's fifty-nine offices. The target was a left-wing group that was agitating against U.S. policy in Central America but had no relationship to terrorism.

Furthermore, the various seemingly harebrained "Mister Ed" schemes that LaRouche became involved in during the late 1970s and early 1980s also had their counterparts in the world of government spookery. The closest parallel is seen in the late CIA director William Casey's Project Democracy, Just as LaRouche set up his private intelligence news service, as a parallel CIA to do what the liberals wouldn't let the real CIA do, so Casey set up Project Democracy. Just as LaRouche operated through the naive Goldstein and Steinberg, so Casey chose the pliable Oliver North. Just as Goldstein and Steinberg believed in mystic spirals, so North belonged to a charismatic church whose members spoke in tongues. Just as Goldstein and Steinberg worked with the likes of WerBell and Murdock, so North used the services of General Secord (who was connected with some of the same rogue agents that WerBell knew). Just as the LaRouchians developed a relationship with General Manuel Noriega, so also did the Project Democracy crowd. Just as the LaRouchians spied on North and revealed his secrets, so North attempted to spy on the LaRouchians. Just as the LaRouchians raised money from wealthy old ladies to fight communism, so North's networks raised money from the same old ladies to supply the Contras. Just as LaRouche's ill-gotten fund-raising gains disappeared into a tangle of corporate shells, so Project Democracy funds became "lost" in numbered overseas accounts. Just as LaRouche came under federal investigation, so also did North. Just as aides to LaRouche shredded documents, so also did North's secretary, Fawn Hall. Just as LaRouche claimed his indictment was a plot by the Democratic Party and the KGB, so North claimed to be the victim of Democrats who don't understand the dangers of communism.

One is forced to conclude that LaRouche is not just an aberration in the world of spookery. To a disturbing degree he is just one of the boys.