By Peter Dale Scott on
Oct 26, 2014
How do Wall Street, oil companies
and the shadow government agencies like the CIA and NSA really shape the global
political order?
That’s
the question author Peter Dale Scott examines in his forthcoming book “The American Deep State: Wall Street, Big Oil and
the Attack on U.S. Democracy,” due out on Nov. 12. Scott, a professor
emeritus of English at Berkeley and former Canadian diplomat, is considered the
father of “deep politics”—the study of hidden permanent institutions and interests whose influence on the political realm
transcends the elected.
In
the “American Deep State,” Scott takes a compelling look at the facts lurking
behind the official histories of events to uncover the real dynamics in play.
In this exclusive excerpt—the first of several we will feature on WhoWhatWhy—he
looks at the revolving door between Wall Street and the CIA, and what that
demonstrates about where power truly resides.
***
In the last decade it has become more
and more obvious that we have in America today what the journalists have
called… America’s “deep state.” (1)
This expansion of a two-level or dual
state has been paralleled by two other dualities: the increasing resolution of
American society into two classes—the “one percent” and the “ninety-nine
percent”—and the bifurcation of the U.S. economy into two aspects: the
domestic, still subject to some governmental regulation and taxation, and the
international, relatively free from governmental controls. (2)
All three developments have affected
and intensified each other—particularly since the Reagan Revolution of 1980,
which saw American inequality of wealth cease to diminish and begin to
increase. (3)
Thus for example Wall Street—the incarnation of the “one percent”— played a
significant role in creating the CIA after World War II, and three decades
later the CIA and big oil played a significant role in realigning American
politics for the Reagan Revolution.
There is an ambiguous symbiosis between
two aspects of the American deep state:
- 1. The Beltway agencies of the shadow government, like the CIA and NSA, which have been instituted by the public state and now overshadow it, and
- 2. The much older power of Wall Street, referring to the powerful banks and law firms located there.
Top-level Treasury officials, CIA
officers, and Wall Street bankers and lawyers think much alike because of the
“revolving door” by which they pass easily from private to public service and
back.
But a much larger role for the private
sector has come with the increased outsourcing of the government’s intelligence
budget. Tim Shorrock revealed in 2007 that “about 70 percent of the estimated
$60 billion the government spends every year on . . . intelligence” is now
outsourced to private intelligence contractors like Booz, Allen & Hamilton
(now Booz Allen Hamilton) and SAIC (Science Applications International
Corporation). (4)
The
Overworld
I shall argue that in the 1950s, Wall
Street was a dominating complex. It included not just banks and law firms but
also the oil majors whose cartel arrangements were successfully defended
against the U.S. government by the Wall Street law firm Sullivan and Cromwell,
home to the Dulles brothers. This larger complex is what I mean by the Wall
Street overworld.
There seems to be little difference in
Allen Dulles’s influence whether he was a Wall Street lawyer or a CIA director.
Although he did not formally join the CIA until November 1950, he was in Berlin
before the start of the 1948 Berlin Blockade, “supervising the unleashing of
anti-Soviet propaganda across Europe.” (5)
In the early summer of 1948, he set up the American Committee for a United
Europe (ACUE), in support of what became, by the early 1950s, “the largest CIA
operation in Western Europe.” (6)
The CIA never abandoned its dependency
on funds from outside its official budget to conduct its clandestine
operations. In Southeast Asia in particular, its proprietary firm Sea Supply
Inc. supplied an infrastructure for a drug traffic supporting a CIA-led
paramilitary force, PARU. [Two CIA proprietaries, Sea Supply Inc. and Civil Air
Transport (CAT) Inc. (later Air America), initially supplied the KMT 93rd
Division in Burma that organized opium mule trains down to Thailand, where
opium sales were still legal.
Later, when the USG officially
distanced itself from the KMT drug army, the CIA organized an offensive and
defensive paramilitary unit, PARU, inside the Thai Border Police (BPP). Like
the BPP, PARU financed itself by seizing KMT opium and turning it in to the
Thai Government, receiving a bounty payment of 12.5 percent of the retail
value.]
(7)
***
The CIA appears also to have acted in
coordination with slush funds from various U.S. government contracts, ranging
from the Howard Hughes organization to the foreign arms sales of U.S. defense
corporations like Lockheed and Northrop. (8)
The international lawyers of Wall
Street did not hide from each other their shared belief that they understood
better than Washington the requirements for running the world.
This mentality exhibited itself in
1952, when Truman’s Justice Department sought to break up the cartel agreements
whereby Standard Oil of New Jersey (now Exxon) and four other oil majors
controlled global oil distribution. (The other four were Standard Oil Company
of New York or Socony [later Mobil], Standard Oil of California [now Chevron],
Gulf Oil, and Texaco. Together with Royal Dutch Shell and Anglo-Iranian, they
comprised the so-called “Seven Sisters” of the cartel.)
Faced with a government order to hand
over relevant documents, Exxon’s lawyer Arthur Dean at Sullivan and Cromwell,
where Foster Dulles was senior partner, refused: “If it were not for the
question of national security, we would be perfectly willing to face either a
criminal or a civil suit. But this is the kind of information the Kremlin would
love to get its hands on.” (9)
Overthrowing
Iran
At this time the oil cartel was working
closely with the British Anglo-Iranian Oil Company (AIOC, later BP) to prevent
AIOC’s nationalization by Iran’s Premier Mossadeq [or Mosaddeq], by
instituting, in May 1951, a successful boycott of Iranian oil exports. “In May
1951 the AIOC secured the backing of the other oil majors, who had every interest in discouraging nationalisation. . . .
None of the large companies would touch Iranian oil; despite one or two picturesque episodes, the boycott held.” (10)
Mohammad Mossadeq
But Truman declined, despite a direct
personal appeal from Churchill, to have the CIA participate in efforts to
overthrow Mossadeq, and instead dispatched Averell Harriman to Tehran in a
failed effort to negotiate a peaceful resolution of Mossadeq’s differences with
London. (11)
All this changed with the election of
Eisenhower in November 1952 (with considerable support from the oil industry),
followed by the appointment of the Dulles brothers to be Secretary of State and
head of CIA.
In November 1952 CIA officials began
planning to involve the CIA in the efforts of MI6 and the oil companies in Iran
(12)—although
its notorious Operation TP/AJAX to overthrow Mossadeq was not finally approved
by Eisenhower until July 22, 1953. (13)
Dr. Mossadeq entering court for his
trial.
Nearly all recent accounts of
Mossadeq’s overthrow treat it as a covert intelligence operation, with the oil
cartel (when mentioned at all) playing a subservient role. However the
chronology, and above all the belated approval from Eisenhower, suggest that it
was CIA that came belatedly in 1953 to assist an earlier oil cartel operation,
rather than vice versa.
In terms of the deep state, in 1951 the
oil cartel or deep state initiated a process that the American public state
only authorized two years later. Yet the inevitable bias in academic or
archival historiography, working only with those primary sources that are
publicly available, is to think of the Mossadeq tragedy as simply a “CIA coup.”
Footnotes
1. Mike Lofgren, “A Shadow Government Controls America,” Reader Supported News, February 22, 2014, http://readersupportednews.org/opinion2/277-75/22216 -a-shadow-government-controls.
2. To take a single telling example, six of Sam Walton’s heirs are now reportedly wealthier than the bottom 30 percent of Americans, or 94.5 million people (Tim Worstall, “Six Waltons Have More Wealth Than the Bottom 30% of Americans,” Forbes, December 14, 2011, www.forbes.com/sites/timworstall/2011/12/14/six -waltons-have-more-wealth-than-the-bottom-30-of-americans/).
3. See Kevin Phillips, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath (New York: HarperCollins, 1991).
4. Tim Shorrock, Spies for Hire: The Secret World of Intelligence Outsourcing (New York: Simon & Schuster, 2008), 6.
5. Gordon Thomas, Secret Wars: One Hundred Years of British Intelligence Inside MI5 and MI6 (New York: Thomas Dunne Books/ St. Martin’s Press, 2009), 98.
6. Richard Aldrich, The Hidden Hand: Britain, America, and Cold War Secret Intelligence (Woodstock, NY: Overlook Press, 2001), 343. Dulles also chaired the executive committee of the companion National Committee for a Free Europe (behind the Iron Curtain), whose legal affairs were handled by Sullivan and Cromwell (Wilson D. Miscamble, George F. Kennan and the Making of American Foreign Policy, 1947–1950 [Princeton, NJ: Princeton University Press, 1992], 204).
7. Scott, American War Machine, 65–67, 87–96.
8. Norman Mailer, “A Harlot High and Low: Reconnoitering Through the Secret Government,” New York, August 16, 1976 (Hughes); Michael Schaller, Altered States: The United States and Japan Since the Occupation (New York: Oxford University Press, 1997), 294 (Lockheed).
9. Ovid Demaris, Dirty Business: The Corporate-Political Money-Power Game (New York: Avon, 1974), 213–14.
10. J. P. D. Dunbabin, International Relations Since 1945: A History in Two Volumes, vol. 2, (London: Longman, 1994), 344. The boycott is denied without argumentation in Exxon’s corporate history (Bennett H. Wall et al., Growth in a Changing Environment: A History of Standard Oil Company (New Jersey), Exxon Corporation, 1950–1975, vol. 4 (New York: McGraw-Hill, 1988), 476:
11. Mostafa Elm, Oil, Power, and Principle: Iran’s Oil Nationalization and Its After math (Syracuse, NY: Syracuse University Press, 1992), 198–99 (Churchill); Robert Moskin, American Statecraft: The Story of the U.S. Foreign Service (New York: Thomas Dunne Books/St. Martin’s Press, 2013), 627–28 (Harriman).
12. William Roger Louis, “Britain and the Overthrow of Mossadeq,” in Mark J. Gasiorowski and Malcolm Byrne, eds., Mohammad Mosaddeq and the 1953 Coup in Iran (Syracuse, NY: Syracuse University Press, 2004), 168. Cf. William R. Clark, Petrodollar Warfare: Oil, Iraq and the Future of the Dollar (Gabriola Island, BC: New Society Publishers, 2005), 125: “The Dulles brothers had already conceived a plot when Eisenhower became president in January 1953;” Tim Weiner, Legacy of Ashes: The History of the CIA (New York: Doubleday, 2007), 83: “[In November 1952] “The CIA was setting out to depose [Mossadeq] without the imprimatur of the White House.”
13. Scot Macdonald, Rolling the Iron Dice: Historical Analogies and Decisions to Use Military Force in Regional Contingencies (Westport, CT: Greenwood Press, 2000), 98. Cf. Richard H. Immerman, John Foster Dulles: Piety, Pragmatism, and Power in U.S. Foreign Policy (Wilmington, DE: Scholarly Resources, 1999), 67. Allen Dulles played a personal role in TP/AJAX, by flying to Italy and persuading the frightened Shah to return to Tehran.
1. Mike Lofgren, “A Shadow Government Controls America,” Reader Supported News, February 22, 2014, http://readersupportednews.org/opinion2/277-75/22216 -a-shadow-government-controls.
2. To take a single telling example, six of Sam Walton’s heirs are now reportedly wealthier than the bottom 30 percent of Americans, or 94.5 million people (Tim Worstall, “Six Waltons Have More Wealth Than the Bottom 30% of Americans,” Forbes, December 14, 2011, www.forbes.com/sites/timworstall/2011/12/14/six -waltons-have-more-wealth-than-the-bottom-30-of-americans/).
3. See Kevin Phillips, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath (New York: HarperCollins, 1991).
4. Tim Shorrock, Spies for Hire: The Secret World of Intelligence Outsourcing (New York: Simon & Schuster, 2008), 6.
5. Gordon Thomas, Secret Wars: One Hundred Years of British Intelligence Inside MI5 and MI6 (New York: Thomas Dunne Books/ St. Martin’s Press, 2009), 98.
6. Richard Aldrich, The Hidden Hand: Britain, America, and Cold War Secret Intelligence (Woodstock, NY: Overlook Press, 2001), 343. Dulles also chaired the executive committee of the companion National Committee for a Free Europe (behind the Iron Curtain), whose legal affairs were handled by Sullivan and Cromwell (Wilson D. Miscamble, George F. Kennan and the Making of American Foreign Policy, 1947–1950 [Princeton, NJ: Princeton University Press, 1992], 204).
7. Scott, American War Machine, 65–67, 87–96.
8. Norman Mailer, “A Harlot High and Low: Reconnoitering Through the Secret Government,” New York, August 16, 1976 (Hughes); Michael Schaller, Altered States: The United States and Japan Since the Occupation (New York: Oxford University Press, 1997), 294 (Lockheed).
9. Ovid Demaris, Dirty Business: The Corporate-Political Money-Power Game (New York: Avon, 1974), 213–14.
10. J. P. D. Dunbabin, International Relations Since 1945: A History in Two Volumes, vol. 2, (London: Longman, 1994), 344. The boycott is denied without argumentation in Exxon’s corporate history (Bennett H. Wall et al., Growth in a Changing Environment: A History of Standard Oil Company (New Jersey), Exxon Corporation, 1950–1975, vol. 4 (New York: McGraw-Hill, 1988), 476:
11. Mostafa Elm, Oil, Power, and Principle: Iran’s Oil Nationalization and Its After math (Syracuse, NY: Syracuse University Press, 1992), 198–99 (Churchill); Robert Moskin, American Statecraft: The Story of the U.S. Foreign Service (New York: Thomas Dunne Books/St. Martin’s Press, 2013), 627–28 (Harriman).
12. William Roger Louis, “Britain and the Overthrow of Mossadeq,” in Mark J. Gasiorowski and Malcolm Byrne, eds., Mohammad Mosaddeq and the 1953 Coup in Iran (Syracuse, NY: Syracuse University Press, 2004), 168. Cf. William R. Clark, Petrodollar Warfare: Oil, Iraq and the Future of the Dollar (Gabriola Island, BC: New Society Publishers, 2005), 125: “The Dulles brothers had already conceived a plot when Eisenhower became president in January 1953;” Tim Weiner, Legacy of Ashes: The History of the CIA (New York: Doubleday, 2007), 83: “[In November 1952] “The CIA was setting out to depose [Mossadeq] without the imprimatur of the White House.”
13. Scot Macdonald, Rolling the Iron Dice: Historical Analogies and Decisions to Use Military Force in Regional Contingencies (Westport, CT: Greenwood Press, 2000), 98. Cf. Richard H. Immerman, John Foster Dulles: Piety, Pragmatism, and Power in U.S. Foreign Policy (Wilmington, DE: Scholarly Resources, 1999), 67. Allen Dulles played a personal role in TP/AJAX, by flying to Italy and persuading the frightened Shah to return to Tehran.
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