C.I.A. and the Dope Business

My thanks to a CN reader for sending a videotape of several episodes of a public access show out of Chicago called "Broadside". This particular episode (below) features Cliff Kelley, a former Chicago alderman, Jim Reis, producer of a public access show called "Wall Street Lies", Mark Sato, author and researcher, and Sherman Skolnick, researcher and founder of the Citizens' Committee to Clean-up the Courts.

[Disclaimer: Opinions expressed are those of the persons mentioned above and do not necessarily reflect my own views.]

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[Awesome sounds of Tchaikovsky's 1812 Overture]

CLIFF KELLEY:
Good evening, and welcome to another edition of "Broadside". I'm your host, Cliff Kelley.

Today we're gonna be talking about something very interesting which I'm sure many of you have heard something about, but you're maybe surprised at the intricacies involved in, the CIA and the dope business. That is our subject for this edition of "Broadside" -- The CIA and the Dope Business.

And in this edition we're going to begin doing something new. We're going to have a guest panelist with us. Occasionally we will be doing this in the future. As many of you regularly see the show, you know quite often we have a guest. But in this edition we're gonna have a guest panelist who can help us to understand the issue that we're speaking about. And he is Mr. Jim Reis, who is the producer of "Wall Street Lies". And of course, "Wall Street Lies" is shown right here on cable access.

And Jim, thanks for joining us today.

JIM REIS:
It's a pleasure to be here.

KELLEY: Appreciate your being with us.

Also with us is our regular panelist, Mr. Mark Sato who, of course, is a legal researcher and an author. Mark, thank you.

And of course, rounding out our panel, our other regular panelist, Mr. Sherman Skolnick, who is the founder of the Citizens' Committee to Clean-Up the Courts and the editor of "Hotline News". Welcome, Sherman.

SHERMAN SKOLNICK:
Thank you.

KELLEY: The CIA... Many feel CIA should, of course, stand for "Cocaine Import Agency". And 60 Minutes has had a recent segment on, showing the fact that the CIA brought in so many thousands of kilos into the inner cities and the country, and lost them, although they were supposed to be controlled. The only thing that was wrong with the [60 Minutes] segment that many of us saw was the fact that the inference was that this was a one-time deal. It wasn't a one-time deal. The CIA deals [unclear] drugs, as does the DEA, the ATF, and a number of other government agencies.

MARK SATO:
Don't leave out the FBI.

KELLEY: Or the FBI. You're right, Mark. Don't leave them out.
SATO: And the IRS.
KELLEY: And the IRS.
SKOLNICK: And the DEA.
KELLEY: I mentioned that. At any rate, there's been a lot of work done by our team of investigative reporters, and that is the subject of our show for today.

We're gonna start off, talking about Mena. Many people have heard of Mena. Mena is a small town in southwestern Arkansas which has an airstrip larger than anything at O'Hare or the airports in New York. And many people don't understand why.

Well the reason is, of course, that there were shipments, trans- shipments, being flown by C-130s at Mena, having, taking off to Nicaragua and bringing drugs back.

President Clinton, before he was elected, admitted that, on a national show, that in fact that was happening, but that he didn't have anything to do with it [Skolnick breaks out laughing], because it was done by the federal government.

But let's start off, Sherman, with you. And exactly what is going on? We found out, through the investigative reporters, that not only do we have Mena, we have something a lot closer than Mena.

SKOLNICK: Right. We have Joliet, Illinois, which is just south of Chicago. And there's a comparison there between... Well there's a fight going on, as many of us know, between the Justice Department and the Treasury Department, and some of it is breaking out into the open.

Now the Wall Street Journal, for example, on October 18th, 1994, ran on the editorial page a big feature story called "The Mena Cover-Up", where they told about how an IRS investigator, William C. Duncan, had for 10 years [tried] to get the Mena story out in the open. And that the media -- well of course the Wall Street Journal doesn't admit it -- but the media "pooh-poohed" it. They didn't go ahead with it.

Now they're praising him as a great hero -- of course, he's no longer an IRS investigator. But he pointed out about these things that are now coming more out in the open: that the CIA pilots... In fact, one of the CIA pilots, Terry Reed, has written a book called Compromised that deals with Clinton, as governor, being involved in the dope shipments, Ollie North, George Bush. It was sort of a non-partisan thing... bi-partisan is I think what you'd call it.

KELLEY: What exactly, so our viewers totally understand this, Sherman, what exactly is the purpose, what was the reason, for the drug sales?
SKOLNICK: The Mena thing? I think the rationale there was that it helped finance the Contras. Which I suppose, maybe they wanted to bring some dictator back to Nicaragua.
SATO: Well the rationale they sold to anybody who was willing to listen.
SKOLNICK: What do you think the rationale was?
SATO: To line their own pockets.
SKOLNICK: Yeah, that's also a rationale.
KELLEY: [unclear]
REIS: In addition to that, it's also to give the people another drug, much like alcohol, or television and the mass media.
SKOLNICK: Not officially.
REIS: Correct. To keep them... stupid...
KELLEY: The opiate of the masses. {1}. Yes.
REIS: I mean, there is... It is simply another tool of the power structure, the elite, to keep people from seeing what's really going on!
KELLEY: I think probably what we have here, gentlemen, is all three of those things, because through the last three decades we can certainly trace the sale of certain types of narcotics here in the United States based on who we are trying to supply arms to, and can't, legally, through Congressional act. And of course, as you know, arming the Contras was illegal since the Congress has said, "No more money." So we've done this quite often, in a number of places.
REIS: Well it's clear that the CIA is heavily involved in drug running operations.
KELLEY: Yeah.
REIS: And it's just something that people should be aware of. And a lot of the money is laundered through Wall Street, through so many different methods.
KELLEY: That is your focus; give us an idea on that.
REIS: Well I, you know, there are so many ways to do it. And in fact, recently -- I didn't cut any articles out because it's such a well-known fact -- that not just the Mafia, but all kinds of people use Wall Street brokerage firms to launder their money, their drug profits.

But also, when you look at the central banking system, which Mark and I have discussed on my show, the central bankers have to know where these billions and billions of dollars are coming in. Now through the late '70s and early '80s it was through the central bank in Miami. And it was clearly, the money was all funneling through there. Because Miami was absolutely the major drug port in the United States.

KELLEY: They even purchased some banks.
REIS: But the money eventually has to funnel through the central bank. The bank there was CenTrust Savings. And there were so many of those savings and loans. David Paul and CenTrust Savings was just one of the biggest. It was a big scandal. But so many of them were used by the drug dealers to launder the money. And the central bankers have to know what's going on. They keep track of the cash, flowing in and out of the local banks. Because the local banks then have to move it through the central bank.
KELLEY: So you're saying you can't launder the money without them being...
REIS: Absolutely not!
SATO: The thing that I think that's really funny, that when these "austerity bankers" {2} get up...
SKOLNICK: [laughs] Yeah...
REIS: We have hundreds of thousands of accounts working in the banking system. [sarcastically] <<We don't know where this cash is coming from!>> They know exactly where it's coming from. They know exactly where it's going as well.
SATO: There was a 60 Minutes a few years ago in which they did an expose' of the legalized drug culture in Switzerland. And on that show they had a Swiss banker admit that right down the street, where they had a majority of the Swiss banks, at least 60 to 65 percent of the money flowing through the Swiss banks was drug money, was narcotics profits.
REIS: That's why you have these secret accounts. Now there's also a proposal that could really shake up all the guys that we're gonna talk about on this show. Because the Swiss bankers are saying, "O.K. Maybe we'll open up the banking system, and there won't be any more secret bank accounts!" Well that's where all the politicians who take the bribes and everything, that's where the money ends up!
SKOLNICK: That's passe'. Switzerland is out, the Grand Caymans, the...
KELLEY: Well let me ask Jim this one question: What you're saying is interesting. What you're saying is people know what's going on...
REIS: Well of course!

CLIFF KELLEY:
I think one of the interesting banking situations was, it was supposed to be the committment to the United States after the invasion of Panama and the fall of the Noriega regime that they would change their banking laws. That never happened.

JIM REIS:
Of course not.

KELLEY: And Endera was involved in money laundering as a bank owner.
REIS: The current president [of Panama, i.e., Endera]. The one who... installed by the United States.
KELLEY: Installed by the United States. Right.
REIS: Well they always put somebody in. They say, "Here's the change." But the central fact is, it's the same gang; it's just a different face.
KELLEY: Yeah.
REIS: This has been going on...

SHERMAN SKOLNICK:
Well Endera looks a little more handsome than Noriega. He [Noriega] was called "The Pineapple".

REIS: Well I thought it was very interesting. In fact, I was the one who called Sherman and said, "Hey! Look at this article about Mena." Because this is a story that you covered long before the mainstream press ever bothered to.
SKOLNICK: Yeah. On this show! The, uh... Mark Sweeney(sp?), the head of the Arkansas committee, who came with about two foot high of documents.
KELLEY: Let's talk about Arkansas for a moment. [Unclear] to this.
SKOLNICK: There's a similarity between the operation in Arkansas and the operation in Joliet that we're gonna talk about -- they used local development companies: in Arkansas they had the Arkansas Development Finance Authority; here they had the Will County local development authority. And they did a number of things that, to "wash" the money in both places. In Arkansas they had bond brokers, the Stephens -- which many people don't know, are the largest bond brokers outside of Wall Street. And they operate a lot of places besides Little Rock. They operate in Atlanta. And the "washing" of the money and the Bank Lavoro thing in Atlanta was arranged -- other reporters really feel; they have investigated it -- involved Hillary Rodham Clinton as an attorney at the Rose Law Firm, and her law partner, Vincent Foster, jr., who was "suicided"; they say, you know, "He committed suicide." But some of us think he was murdered.

And one of the bond brokers was supposed to go to jail, but Clinton, as governor, saw to it that he didn't. And that was Dan Lasater {3}, who was in with Clinton's brother, who was a cocaine user, I believe.

MARK SATO:
And he was in with [former Illinois governor] Dan Walker? Is that right?

SKOLNICK: Yeah. With a... through a S&L in Oakbrook [,Illinois], for which Walker was sent to jail.

But the point is...

SATO: How come Lasater didn't go to jail?
SKOLNICK: Uh...
SATO: Is that a dumb question?
SKOLNICK: No, it's a good question. Uh, but the point is...
SATO: Is there an answer?
SKOLNICK: Lasater's business partner as a bond broker, Patsy Thomasson, then became the secretary to White House aide Foster. And she's the one that reportedly moved his records, shipped them to Chicago so they could be used for blackmail, after he [Foster] was "suicided".
REIS: Let's put some numbers on here real quickly, just so people understand, that Stephens [is] the main underwriter of these Arkansas Development Authority bonds. And the last story that I saw, where they put a number on how much has been issued, was $50 billion of Arkansas Development Authority bonds! Now the last census I saw said there's 4 million people in Arkansas. So you're talking about, I believe it's $14,000 of bonds per person that's been issued. And Arkansas is, I believe, the second-lowest per capita income state in the Union, behind West Virginia. But they're both states controlled by the Rockefellers, [unclear] governors of those states, named Rockefeller. And they are the Rockefellers. And this is a humongous amount of money! And I...
KELLEY: What does that mean?
REIS: I'd like to know what they're doing with the money.
SKOLNICK: I'll give you a suggestion...
REIS: But also, through these bonds...
KELLEY: They're building airports!
SKOLNICK: They're building Mena airport, to land zeppelins!

The point is, we are currently looking into Wal-Mart, which is headquartered, I think, in Bentonville, Arkansas. And there is reason to believe that Wal-Mart got, really started to boom, in the '80s and branched out across the country, we believe, through cocaine, cocaine money.

SATO: Well you're saying they laundered money with their little toasters and things? Is that what you're saying?
SKOLNICK: Uh...
REIS: If I can give people a perspective on Wal-Mart: it is probably one of the biggest paper pyramids. On my show, I talk about "The Greatest Pyramid Scheme Ever Foisted On The Human Race", the present financial system -- which is all it is, a pyramid scheme.

But within that pyramid scheme are lots of little building blocks. If you look at a pyramid, they've got lots of building blocks to build up the big pyramid. And Wal-Mart is one of them (just from an accounting standpoint -- I do have a degree in accounting).

And when you look at a company... Let's take a 100-year-old company like American Brands, the old American Tobacco Company: They only have 200 million shares outstanding. Used to be one of the Dow-30 stocks, it was [unclear]. But this is a 100-year-old company. Now Wal-Mart is a 30-year-old company. Anybody want to take a guess at how many shares they have outstanding?

SKOLNICK: Tell us!
REIS: 2.3 billion little pieces of paper [unclear] watered down. But of course, I mean, this is a paper pyramid. Not only that, but when you open all these stores -- these are new stores, that Wal-Mart's been opening up. They're not coming in and taking over a site; these are built from the ground up.
KELLEY: I don't want to get away from, from dope...
SKOLNICK: Yeah let's go back to Mena.
REIS: But I just want, just let me finish that point: that these guys have somehow managed to do this without creating debt, or some kind of obligation on the stores!
KELLEY: Does that tie in with...
REIS: Oh they could be laundering tons of money through there {4}. Easily.
SATO: It's the same story that involved Michael Milken. In other words, he was never afraid he wasn't going to be able to buy somebody out, because he knew that he had narco-money up the wazoo to support his takeover bids with the junk bonds. He knew that there'd be enough drug money available to him to take over any company he wanted, in the world.
KELLEY: What did Clinton know? Before we leave Mena and this, specify what's going on, and go ahead. What did he know about Mena?
SKOLNICK: In the book by Terry Reed, the CIA pilot who they tried to "frame", he claims that there were meetings and he had direct knowledge of, that Governor Clinton attended. And so he knew, despite what he said at this recent press conference in October, Clinton, I think is making a belated apology when he says it was "federal jurisdiction" -- which some of us took to mean "CIA jurisdiction". And of course some of us feel that he and his wife are a CIA couple. And that's a separate subject -- I think we discussed that on this program?!
SATO: You're saying he was apologizing belatedly? A belated apology would be, "I'm sorry I got involved with a drug importation operation..."
KELLEY: ...when he told him, and this was even before he was elected, on a national show. And he was asked about Mena and he disclaimed any knowledge. And the questioner said, "If you don't know about C-130s, the largest transport in the world, flying out of a cotton patch -- not only shouldn't you be the President; you probably shouldn't be the governor." Then he [Clinton] said, "Well I do know about it, but it's a covert action," [in other words,] "I don't... I know it's happening. It's in my state. I don't know anything about it."

I presume this disclaimer's what...

SATO: That's a disclaimer. That's not an apology.
KELLEY: You have to understand...
REIS: ...Mena right on the border...
KELLEY: Oklahoma, yes.
REIS: So they could have missed it.
KELLEY: Maybe that's why...
SKOLNICK: But the point is, by 1986, I wouldn't say that Mena necessarily was taken down, but it became more and more evident, because, I think Mark pointed out in the previous show, by 1990 came out a congressional report by congressman Doug Bernard(sp?) where he went into great length about Mena, but nobody paid attention to his report! I think we were the only ones, on this show, that...
SATO: It was called "Senior IRS Employee Misconduct".

SHERMAN SKOLNICK:
Yeah.

MARK SATO:
It [i.e., the report, circa 1990, by congressman Doug Bernard, "Senior IRS Employee Misconduct"] was about the fact that many, many people in the IRS knew what was going on at Mena -- especially Mr. Duncan, but nobody wanted to listen to Mr. Duncan. And several very high up IRS attorneys went to Mr. Duncan and threatened his life! [From] fear that he'd talk about Mena and the fact that Edwin Meese was involved with Mena...

SKOLNICK: Yeah. So what happened is, just prior to the time that, the '86 congressional election, about a day or two after is when the Iran-Contra thing blew. And of course, as we now know, the Mena thing was tied in with... The Contras were getting guns in one direction, and then dope was coming back in the reverse direction. After all, you wouldn't want the planes to come back from Nicaragua empty. They made a side trip to Columbia.

CLIFF KELLEY:
[Unclear]

SKOLNICK: Right! And that helped the Contra thing. So just before that scandal broke (and I think early in '86 there were some people [that] knew that scandal was gonna break), the gang over here [i.e., Chicago area], which we're gonna outline, started in their own episode. And that gang includes the one who at the time was the governor, Jim Thompson. And we'll call it the Robert Tezak - Jim Thompson gang.

Because Tezak was a very interesting fellow. He ran a worldwide company called International Games, Incorporated, headquartered in Joliet, Cayman Islands, and in Hong Kong. And he had his own plane, and occasionally went to Hong Kong -- supposedly to check out the shipments coming in of his supplies.

But what happened in 1986... (There's a picture on the screen of Tezak. He's a rather young fellow.)

SATO: He was the Will County coroner from 1976 to 1988. He was the youngest elected official ever in Will County. He did that, he campaigned in '76, off of his Uno fortune {5}.
KELLEY: What was his politics?
SKOLNICK: He was close with George Bush, Jim Thompson, Anton Valukas, and Dan Webb.
SATO: Well his local support in Will County included John Anarino(sp?) and Representative Jack Davis.
SKOLNICK: Right! So what happened in '86 is, the Robert Tezak gang, with Jim Thompson, by chartered plane went to mainland China -- purportedly to arrange for the first Chinese factory, industrial facility, to be built, to be set up in the United States, in west Joliet! It was purportedly for soybean and soybean curd processing plant.

JIM REIS:
You're saying that the Chinese were gonna make an investment over here?? {6}.

SKOLNICK: That's your allegation.
KELLEY: Well no, he's asking a question.
REIS: That's totally ludicrous. They don't have enough money.
SKOLNICK: Not, not... As we will point out later, starting in 1983 (just to back up a little bit) a very highly secretive unit of the Treasury Department began investigating the Joliet-Chicago area, that is, between Chicago and Joliet: the banks, the fake real estate development companies, these local development companies that were "washing" not only dope money, but bribery money for state and federal officials. And so they were on the track of all this, and by 1986... What happened is, when Thompson and the Tezak gang went over there -- then began to come in here purported Chinese technicians, supposedly to scout out the building of this soybean processing plant. (I'm not sure that they needed another soybean processing plant in Illinois, frankly.)
REIS: I would think Archer Daniels Midland would be able to take care of...
SKOLNICK: Well, that's a, that is a money laundering operation for another show, Archer Daniels Midland.

But anyway...

KELLEY: What was the stated reason? Answer the question. What was the stated reason?
SKOLNICK: ...free enterprise zone in the DesPlaines River Valley. It was to make employment. Yeah, you made employment...
REIS: For Chinese immigrants?
SKOLNICK: Well, now get the picture. By 1986...
KELLEY: ...to ask you, what we need to know: what the intent was for the Chinese trip. We certainly didn't need to go to there for any technical advice. But why did Thompson...
SATO: To make... I think it was probably to make connections with the Triad societies.
KELLEY: Sure. I'm just wondering what... He didn't say that. I was just wondering, what was the purpose...
SATO: ...societies are the ones that control the dope.
KELLEY: Yeah.
SKOLNICK: That is what happened!
KELLEY: But that's not what he told the public.
SKOLNICK: Well I've got some of the documents, confidential and otherwise. In March '86, they sent out a news release: "China Site Selected". This was gonna do a great thing for Illinois.
KELLEY: "China Site Selected". Let me see that.
SKOLNICK: Yeah. [Hands news clipping to Kelley]
KELLEY: "China Site Selected". Keep talkin'.
SKOLNICK: But now here's the point! The technicians...
SATO: Before you do that, it should be explained that Triad societies in China have been around for hundreds of years...
SKOLNICK: Thousands!
SATO: ...and it has controlled the dope trade for, for a very long time. The drug trade has been around for a long time in China. The southwestern corner of China... I should say the south, into Indochina, which includes part of the Golden Triangle, from which 60 percent of the world's heroin is...
KELLEY: Let me interrupt for a minute. We owe an apology.
SATO: To who?
KELLEY: Mr. Skolnick.

SATO/REIS:
[Groans]

SATO: Oh, gosh!
KELLEY: Now listen. I'm just as... [Reads] "Department of Community and Economic Development, dated March 26th, 1986,

China Site Selected

Joint venture partners Mr. John Wong and Mr. Bing Lao announced today they have selected a 10 acre site on the west side of Joliet for the construction of their joint venture soybean processing plant. Will County board chairman John Anarino said [unclear] Consul General of the People's Republic joined John and Bing to announce this historic step in the relations between the United States and the People's Republic of China.

SKOLNICK: Here's what actually happened...
KELLEY: I would never...
SKOLNICK: Here's what actually happened. What the highly secretive Treasury [Department] unit, that had been going since '83, found out was, that of the Chinese technicians that were coming in here, some of 'em were high-up officials of the Tewu, the Chinese secret service, or secret police. And the Chinese secret police have got only one instance where one of their people defected to the west. Because of their use of the secret dialects, in with the Triads that Mark [Sato] mentioned, there has been almost no penetration. In fact, one of the only officials in this part of the world that understood a little bit about it was at one time, in the '70s, the States Attorney of Cook County, Bernard Carey. He was at one time with the CIA China desk. And whether he knew these secret dialects, I don't know. I mean, I used to run into him sometimes at a place where I used to eat lunch, but...

But anyway, here is the point. By 1986, the First National Bank of Chicago (and I think we all understand that that's Rockefeller money), First National Bank of Chicago had loaned massive amounts to China on the idea that there was going to be, that it was gonna be supported, in part, by gold from the western provinces -- which turned out to be a mirage! The western provinces were so remote, nobody went to look there to see if they actually had a gold mine there!

KELLEY: That's how he got the money back.
SKOLNICK: Yeah. Yeah.
KELLEY: So they were gonna get it back. But not with soybeans.
SKOLNICK: Now the Golden Triangle produces the very high class, high purity narcotic -- "China White", it's called. And it goes for a very high price, because it can be cut down and so on in laboratories. And basically, what was gonna happen is, the NSA and the CIA leaned on the Treasury [Department] unit and says, "You must not continue to investigate, because it's 'national security'." But they continued to investigate, and that led to a break between the Justice Department and the Treasury [Department].
SATO: A little background, before you go on. So that people understand.

The reason why the Golden Triangle is so important: 60 percent of the world's heroin comes from the Golden Triangle. The reason why the Viet Nam War was fought was because of the Golden Triangle. There isn't another reason why it was fought. It was fought to enable the CIA to pry loose French hands from the Golden Triangle. The reason why the "French Connection" was blown apart was also related to the reason why the CIA wanted to get into the drug business -- knock the French off; knock the Corsican Mafia off. And the Viet Nam War enabled the CIA, which was -- The Viet Nam War was basically a CIA war, fought to gain control of the Golden Triangle.

SKOLNICK: Yeah, that's true.

But the point is, the Treasury [Department] unit... The NSA and the CIA tried to stop them from investigating. Because this was gonna be one of the great opportunities to keep track of the Chinese secret police.

Now a lot of people don't know, the Chinese secret police started infiltrating the United States around the time of...

MARK SATO:
...they said that this was gonna be an opportunity to keep track of the Chinese secret police? [sarcastically] <<Ha-ha.>>

SKOLNICK: Well...
SATO: I mean it's the other way around.
SKOLNICK: Well... I...
SATO: It's an opportunity for the Chinese secret police to keep track of us...
SKOLNICK: O.K. But the point is, they were aware that the technicians...
SATO: The fact is that they blow you away.
SKOLNICK: ...that they were aware of, the technicians comin' in for this soybean thing were reportedly top officials of the Tewu, which is the Chinese secret police. And so they figured, don't... Get the Treasury [Department] out of this. They wanted to track these people and see what they're doing with this soybean plant!
SATO: That's what they said.
SKOLNICK: Yeah. It served a national purpose of some sort, supposedly.

But the point is...

SATO: So did Mena, Arkansas.
SKOLNICK: Yeah. Yeah.

O.K. But thereafter, starting in '86, the importation of, the smuggling in of "China White" got onto a big scale: through barges that came up the waterway from New Orleans, up the DesPlaines River, right past the place named Moose Island -- which is owned by Robert Tezak, one of the "Thompson Gang" people, a close friend of George Bush. He owns Moose Island jointly with his business partner, John Bays, an auto dealer, O.K.? And the barges came right by there, O.K.?

Also, planes were coming in to the Joliet Municipal Airport and to Pewaukee Airport which is near Prospect Heights, which is near where John Bays -- Tezak's partner -- where John Bays' wife, Roxanne, runs a Ramada Inn.

SATO: No C-130s, though.
SKOLNICK: No. But you and I visited the Ramada Inn and there was somethin' wrong about it: there wasn't, didn't seem like anyone...
SATO: No guests.
SKOLNICK: Yeah! We were wondering...

CLIFF KELLEY:
Air drops.

SKOLNICK: Yeah... Well, I don't know. But anyways.

Now the point is, that some of the "China White" was coming in through the incoming packages of equipment from International Games, Incorporated, which is run by Tezak. Worldwide, headquartered, as I said, in Joliet, the Grand Caymans, and Hong Kong.

SATO: Now it should be pointed out that one of the ways that the Triad societies in China export drugs -- whether it's lower grade heroin or "China White" heroin, is through plastic toys. In other words, plastic toys are hollow -- they're hollow! And so they put heroin in there and they put heroin in stuffed animals. A friend of yours, named Barton Kalish...
SKOLNICK: Yeah, yeah... It's already been investigated.

JIM REIS:
He's a friend of yours!?

SATO: A Hong Kong toy manufacturing owner is involved in that particular little scheme...
SKOLNICK: Yeah, yeah right. He fits into this. We'll show ya...
KELLEY: ...acting strange.
REIS: So what you're saying is, that this guy Tezak owns this Uno Games Company, and he's...
SKOLNICK: No. International Games Company, One Uno Circle, Joliet.
SATO: That's "Uno", not "You know". Uno. The "You know" is a common phrase used by people who don't know.
REIS: But the game is being shipped, and it's being allegedly put together over in China or Taiwan -- which is nationalist China, right? So they're shipping it in along with the product which...
SKOLNICK: Yeah. I thought I made that clear. But wait a minute! In order to "wash" this money, they set up a very complicated series of situations that the Treasury Department has been investigating for the last eleven years.

O.K. Now. What they did is they set up local development companies. They set up sham companies that were to be the recipients of millions and millions of dollars of SBA loans. I have one of their documents here...

REIS: Small Business Administration [SBA].
SKOLNICK: Yeah! And what they did is, to make the money disappear in that, one of Dan Webb's -- he was the assistant U.S. Attorney from '81 to '85 -- one of his assistants...
SATO: He was the U.S. Attorney, not an assistant. He was assistant under Jim Thompson back...
SKOLNICK: Yeah, he was the chief U.S. Attorney in Chicago from '81 to '85. He's correct.

And one of his assistants was Gail C. Ginsburg, O.K.? Whose husband, from '86 on, was a bankruptcy judge. So the way, the way that... She was very active with the U.S. Small Business Administration; that was her function.

So one of the things they did (and we checked it out through various records in the bankruptcy court), what they did... This is a complicated thing to get rid of all this money! But what they did is, these companies, these sham companies, would get this money. Some of them would never even build the buildings for which they got the money! [laughs] And, and they would quickly go into bankruptcy. And then the chief judge in Chicago, the bankruptcy court, John D. Schwartz -- and we've "praised" him on this program; we've never accused him on this program of being honest, have we? I don't think so. And Schwartz, twice a month, would send Gail Ginsburg's husband, bankruptcy judge Robert E. Ginsburg, to sit in a small federal building in Joliet...

SATO: Why, Sherman?
REIS: To oversee the "bankruptcy" cases.
SKOLNICK: To oversee the money.

Now Ginsburg is a very interesting character. He was directly working for Bill Casey, the OSS/CIA operator, going back even to the '70s.

SATO: And Stanley Sporkin(sp?)?
SKOLNICK: Yeah, Stanley Sporkin.
SATO: The architect of the Iran-Contra affair.
SKOLNICK: Right.
SATO: And now a federal district judge in Washington, D.C., covering up all kinds of mischief.
SKOLNICK: Right. Sporkin, Casey, and Robert E. Ginsburg. And Sporkin had previously been the general counsel of the CIA.
KELLEY: And also the SEC [Securities Exchange Commission].
SKOLNICK: Yeah.
KELLEY: [Unclear] Joliet.
SKOLNICK: O.K. But wait a minute! From... Just to give you an idea how they did all this. From '77 to '85, [unclear] as a bankruptcy judge, Ginsburg worked for a CIA law firm operating in Chicago Heights. Um, the Anthony Scariano, junior and senior. Of course, Scariano's got a long background with the OSS and the CIA, which we can spend an hour going into.

So I mean, they came equipped into the thing.

REIS: One thing about Scariano that's important as to this, is he brought over [from Italy, after WWII,] a whole bunch of Italian gold. And of course gold is the currency of the realm for drug dealers.
SKOLNICK: Yeah. And the bankruptcy trustee for Joliet was, as we already mentioned on this program, John E. Gierum, who's close with the Rodham family, Hillary's family, from Park Ridge, where he's from. And so between [unclear] chits and bankruptcy records, and it all checks out. Gierum, bankruptcy judge John E. Ginsburg -- they did their thing in Joliet...
REIS: John Gierum being the one who helped ensure that the gold which is sitting under a condo complex in Addison was properly taken care of.
SKOLNICK: Also, Gierum -- we talked about it on this program -- Gierum confessed to me and an associate of mine, in January [1994], that the White House was trying to "frame" him on a $50 million contingency fund that he had a lot to do with, from the Resolution Trust Corporation. He had it secretly transferred to Little Rock to make good the problem that the Clintons had there with Madison Guaranty -- the purported embezzlement.
REIS: He did more than "make good for it". What actually happened with Madison Guaranty was, they didn't embezzle it down from $100 million to $50 million, they embezzled it down from $100 million to zero! And the money from Chicago at least made it look like there was something left. Because if it was zero, then anybody in their right mind would say, "Huh, yeah. There's something wrong here." As opposed to $50 million, where people can say, "Well, maybe it's accidental."
SKOLNICK: Anyway, Gierum's confession is a matter of record in one of the bankruptcy cases. And they were served a copy, which is proper. And Gierum has never opposed it as being untrue.

So what happened was, they had these various devices. Now, for example, they had a whole group of agencies, federal and state agencies, that give subsidies to the inner city and others -- the Small Business Administration is one; the Illinois Department of Commerce and Community Affairs is another. The U.S. Department of Labor, with their CETA [Comprehensive Employment Training Act] grants, and so on. And so... Yeah, let's see the picture again of Tezak, up on the screen. Tezak was the, was the thing that was makin' the thing actually run. But now, the different agencies that were involved -- the Will County Local Development Council, and others, they had all this federal money, subsidies, the records of which would show the "washing" of the "China White" money, were kept in one building, called the "Moose Building". Can you guess who owned it? The guy that owned Moose Island, John Bays, the partner of Robert Tezak.

CLIFF KELLEY:
Where is Moose Island?

SKOLNICK: Chanahan(?). It's right outside of Joliet.

MARK SATO:
Chanahan.

SKOLNICK: He knows how to pronounce it better than I do.

O.K. Now what happened was, now one of those that were involved in the China thing was Edward F. Masters, who later became the States Attorney of Will County -- he should have looked into this, right? And then he became the chief judge of the 12th district, Will County.

SATO: And that's an interesting story right there, because... Judge Masters oversaw a case involving a bond issue, a $50 million bond issue which was passed secretly by the Will County board. And part of the reason why they wanted $50 million in bonds was to expand the forest preserve district around Moose Island.

In other words, to make it a little more secure.

KELLEY: How do you pass a bond issue for $50 million secretly?
SATO: They held the board meeting in secret. Of course, the voters were up in arms over it. But they got it passed.
SKOLNICK: They got suggestions from the former Governor Clinton [laughs]. You know, how to do this thing! But...
SATO: And that was under the guidance of Mr. Tezak's friend, John Anarino, who was the Will County board chairman.
SKOLNICK: O.K. But here's the point: the "China White" money was disguised as subsidies from these federal agencies -- Small Business Administration, HUD, the Housing and Urban Development, the U.S. Labor Department (of which the Scariano law firm has been the private counsel for the Labor Department for many many years), the Illinois Department of Commerce and Community Affairs. And what they did is, to make some of the money "disappear", they dispensed it, allegedly, to three training institutes. I mean, they had all kinds of gimmicks to make the money "disappear"!

And, part of the money, starting in '86, went to finance (that's what the Treasury [Department] unit believes) Household International. And their bank's Household Bank -- which actually is a savings and loan, by the way. And where is Household International headquartered? Where Roxanne Bay's got her motel, over there in Prospect Heights! I mean, where else?! Right near the Pewaukee Airport.

O.K. But here...

JIM REIS:
It's called a "savings bank". But it falls in-between the cracks...

SKOLNICK: All right.
REIS: No, it's a good point! Because it falls in-between the cracks, between savings and loan, and bank. And you don't really know where it stands. So these guys are issuing all these credit cards; this is one of the big credit card issuers. And this is another way that money's being laundered.

Now I want to go back to that bond issue that you spoke about awhile back, that Will County bond issue. Something interesting will happen there, is that it will default! Because they've taken the money, and there's no purpose behind it. They're using it for some secret purpose. People invest in these bonds! O.K.? But in a lot of the [unclear], they own a piece of those bonds whether they know it or not! So be forewarned, be forewarned.

SKOLNICK: But here's the problem: from '79 on, Tezak's lawyer was Dan K. Webb. And he was his lawyer even while Webb was the U.S. Attorney, O.K.? So I think he should have gone after Tezak. Instead, he was his lawyer, which is, I think it's illegal.

And then, Webb was replaced by another member of the gang, Anton R. Valukas. So by 1986 and '87, things began to escalate. What happened was, the Treasury [Department] unit insisted that chief prosecutor, U.S. Attorney Anton R. Valukas, get a grand jury looking into this thing. But, since Valukas and Webb are close with Tezak and Bush and all that, they issued a subpoena for the records, which were kept in the Moose Building there, purportedly by a group that has the name "Private Industry Council", but they kept records that were federal subsidy records -- SBA, HUD, and so on. And what happened is, Valukas "tipped off" Tezak. And the subpoena was returnable on a Monday, December 7th, 1987. On the Friday night preceding it, Tezak burned the building down. Can we have Tezak's picture here again?

All right. Now, so the point is, what happened is, there was an obstruction of the federal grand jury, O.K.? Now, the next group of pictures we would like...

REIS: ...in other words, that was in December of '87.

SKOLNICK: Yeah. This is a diversion, but just at the time that Chicago had a big commotion, an all-night session at City Council to pick a new acting mayor, following the strange death of Harold Washington. O.K.?

This, the building, the Moose Building burned down December 4th, 1987.

All right. Now...

KELLEY: That's where all the records were.
SKOLNICK: Yeah! That's where all the records were. And...
KELLEY: You are saying that it is your belief that the U.S. Attorney, who was Anton Valukas, was in a conspiracy with Mr. Tezak [unclear] ...
SKOLNICK: O.K. Now. Can we see those pictures now, the building, the way it was before, before it burned down, and then the way it looked after the fire, according to the picture in the Chicago Tribune?

O.K. Here's... You look carefully. You see the moose on the building? Moose Island - Moose Building. There it is. Can you see where it says "Private Industry Council"?

By the way, get the picture. Now here is the story the Tribune, which had the picture below it of the building, as it looked when it burned down. Here it says the IRS wanted the records; actually it was the secret Treasury [Department] unit that had wanted the records to be brought... Now here's the building. Here's... There's the building as it burns down.

SATO: That's the after picture.
REIS: That's a barbecued moose.
SKOLNICK: Yeah! Barbecued moose.
SATO: It's Bullwinkle.
SKOLNICK: Look at the picture, see. Now, what happened is, Anton R. Valukas, the U.S. Attorney, chief federal prosecutor, did not investigate what this was about because he already knew what it was about! He told Tezak, "Hey! We're comin' with a subpoena Monday. Burn the building down Friday night. Our subpoena will be 'inoperative'." (Or "inappropriate" or whatever the word is for such a thing.)
SATO: Moot. It would be, "Moose: moot".
SKOLNICK: Moose: moot.
REIS: They didn't have a shredder big enough to take care of all these documents?
SKOLNICK: But wait a minute!
KELLEY: No, that would have been obvious, up front. This [i.e., the fire] was an "Act of God".
SKOLNICK: There's a whole group of banks and CPAs tied in with the "China White", reportedly. They had other records that they could have reconstructed and gotten the picture! The Foreman(?) Bank and Trust, the Heritage Bank, banks that dealt with Tezak, that is, the Heritage Bank of Crest Hill, which is a Joliet suburb. They could've, you know, they could've reconstructed it. They could've gone to Gail Ginsburg and say, "Hey! You're the Assistant U.S. Attorney assigned to the Small Business Administration. Come up with some more records."

The thing was dropped.

Now what happened is...

REIS: This sort of stuff happens a lot in Chicago, though. Doesn't it?
SKOLNICK: This is Joliet! I mean, this is south of Chicago.
KELLEY: So what you're actually saying then is that all of these people were in a conspiracy...
SKOLNICK: Valukas, Dan Webb, Tezak's lawyer.

So by 1993, O.K.? The Treasury [Department] unit, the highly secret [unit], did not shut down their investigation as demanded by the CIA, the NSA. They continued to probe. And we've talked on this program that there is an ongoing fight, coming out in the open, between the Treasury and the Justice Department [unclear] the Clinton White House.

SATO: ...there is another way to look at this...
SKOLNICK: Yeah. Tell us.
SATO: ...than a fight between the Justice Department and the Treasury Department. You might be able to see this as a fight between the forces which like to import narcotics from Latin America, and those who like to import narcotics from Asia.
SKOLNICK: That's a... You added a new light to the thing!
SATO: Because the Triad societies...
SKOLNICK: Write it down!
SATO: ...the Triad societies are in a process of fighting the Mexican Mafia, because they want to be able to import "China White" over the Mexican [unclear]. So there is a fight going on between them, and it's going to be a devastating fight. The reason why "Slick Willy" pushed NAFTA was to enable there to be an alleged free market flowing between Mexico and the U.S. -- meaning a narcotics flow rather than a business flow. That is his main purpose in pushing NAFTA.

JIM REIS:
That story was covered in the New York Times.

VARIOUS: [Contention for who will speak; all speak at once]

SHERMAN SKOLNICK:
But get the picture. By 19...

REIS: This was a long time ago.
SKOLNICK: By 1993, the fight between Justice and...

CLIFF KELLEY:
...even before "Slick Willy" was elected.

SKOLNICK: But the fight between Justice and the Treasury Department, and this secret unit -- which is like William Duncan and the Arkansas thing, that IRS investigator: he pursued it, pursued it. These guys compiled thousands and thousands of pieces of, "raw material", call it. Memo books, tracking people, phone numbers, names, and so on.

And what happened is, 1993, six years after Tezak burned the building down, he suddenly showed up, with Dan Webb his attorney, and they appeared... It was supposed to go to trial, before a judge over here: Judge... Chicago Federal District Judge Wayne Anderson, who mysteriously gets all the controversial Treasury Department cases! You look at his docket, you notice "This is very odd." Anyway, he gets the Tezak case.

And Tezak comes there and says, "I don't want a trial. I plead guilty. I burned the building down, to protect my friends."

Now neither Judge Anderson, nor his lawyer Dan Webb, or anyone says, "Which friends are you gonna protect?"

And so they gave him a twelve-year term, and away he goes.

Now. What I...

REIS: He's currently in the third [unclear].
KELLEY: What did he mean that "He did it to protect his friends"?
SKOLNICK: He burned down all the records so there'd be nothing... Thompson, "China White"...
KELLEY: ...that. But he wouldn't say that. I'm sure someone asked...
SKOLNICK: He pleaded "guilty" to torching the building...
KELLEY: I know.
SKOLNICK: ...to arranging the torching of the building.
KELLEY: Right. To... You also say that he did that "to protect his friends."

MARK SATO:
From assassination...

SKOLNICK: Nobody asked him to explain!
KELLEY: Nobody asked him to explain...
SATO: ...from assassination by the Triads.
SKOLNICK: O.K. So here's what happened. I became...
SATO: The Triads would be willing to assassinate them and everybody else in the whole place, if Mr. Tezak started talking.
SKOLNICK: ...one of the money laundries (and time is running out on our show; we really need another show) -- But one of the money laundries that they suspected is Governor's State University Foundation, which has got these same people as directors! They've got a representative on the board of...
SATO: You're talking about University Park, or Park Forest South(?), which is in Will County.
SKOLNICK: Yeah! On the board there is -- some of the same people that are connected with all this.
SATO: Anthony Scariano.
SKOLNICK: Yeah! Scariano's law firm is there, and so on. We can go on to the whole thing. But let me come to the point!

So. On October 6th, '94, I demanded a meeting with the highest federal official in this part of the country. Because I knew about this from all these records. And I demanded... So they produced two people for me to have a meeting with. And I came, and an associate of mine. And I met with Mark Prosperi, O.K.? I didn't find out 'til later who he also is. But he was introduced to me as the chief of the organized crime/drug enforcement "task force"! Then sitting on the other side of the table was the secretary to the current U.S. Attorney, Jim Burns.

And I detailed this for 35 minutes. And after 35 minutes -- I mean, I'm still detailing a summary, like I'm doing on this program! And suddenly, he picks himself up and, in so many words, says, "I'm not interested." And as he walks out the door, in so many words, he says, "Skolnick. Why don't ya mind your own business." [expresses astonishment] Here I am reporting a major series of crimes all the way from here to the Bush White House, from here to the Clinton White House, and he says, "Skolnick. Mind your own business."

KELLEY: Who said that? Prosperi?
SKOLNICK: Yeah. So then I later started investigating him, naturally, and I asked friends of mine that have covered the White House. They says, "Oh! Mark Prosperi is one of Bush's... one of the aides in the Bush White House. And he's close with Bush." I says, "Oh... That explains why he told me he's not interested." He told me to mind my own business.

So the top officials of the U.S. Attorney's office, the DEA, the Justice Department -- they know what this is about. During the 35 minutes, at no time did he say this wasn't true. He says, "Well! The matter's closed. Tezak's got 12 years, and I don't know why you're bothering with this, Skolnick."

KELLEY: All right. Give our viewers, Sherman, a capsulation of what all this means.
SKOLNICK: What it means...
KELLEY: Where'd the money go? Who got the money?
SKOLNICK: The money's being "washed" in a series of Heritage Banks, purportedly through this Foundation... University, through the three training institutes, through a complicated monkey-business with the bankruptcy court with Judge Ginsburg and Judge Schwartz, and other...
KELLEY: Who are the principals?
SKOLNICK: Oh, the principals are former governor Jim Thompson... And by the way, how did he go about covering this up? Bush appointed him as the director of the Foreign Intelligence Advisory Board, that supervises CIA covert operations! So Bush put in Thompson to be in charge of investigating "China White"! So, I mean... uh, Thompson, Anton R. Valukas, Dan K. Webb, a long time attorney for Tezak, John Bays, and an assortment of state and federal judges. And the Treasury [Department] unit believed that Chief Judge Masters is involved with this! He was involved with arranging the Chinese technicians!
KELLEY: Now what is going on now? You're saying that the present administration is continuing to go along with the...
SKOLNICK: Oh, yeah!
KELLEY: ...is this operation still going...
SKOLNICK: Yeah! Today! Right now...
KELLEY: ...coming through Joliet.
SKOLNICK: Yeah. But here's the problem: one of the records to be released -- and if it were not for the obstruction of the federal grand jury, in December of '87 [i.e., when Tezak burned the building down and destroyed the records that would have been covered by the imminent subpoena], (thanks to Valukas and his corruption) [i.e., Valukas allegedly warned Tezak about the subpoena ahead of time], here's what would have happened: two congressmen, one former congressman, would have gone to jail. Illinois state senator...
KELLEY: Could we have an idea who they are?
SKOLNICK: Former congressman Jack Davis from Illinois. Illinois state senator Aldo DeAngelis(sp?) (and I can go into a long discussion of his involvement). Will County Chief Judge Edward F. Masters, who was the attorney for the Private Industry Council and later the States Attorney of Cook County, now the Chief Judge. Former U.S. Attorneys Dan K. Webb and Anton R. Valukas -- who I think you and others have never accused of being honest, right? Former U.S. Attorney and later Illinois governor, Thompson himself, would have to be... And by the way, Thompson is the senior managing partner of Winston & Stromm(?); and some claim that they "fix" state and federal cases through bribery.

But these three bankruptcy judges are involved. We checked the records on all these fake cases. Robert E. Ginsburg and his wife. The SBA. Chief Judge Schwartz that sent Ginsburg to Joliet to cover up these cases.

A long... And of course, two officials of the DEA.

So it's a tremendous thing. And the "China White" is getting to be the great scourge of the United States.

KELLEY: That's correct.
SKOLNICK: And it's coming in, it's coming in right south of Chicago, through Joliet. By various means. And the highest officials in this country know about it, from here to the White House: from here to the Bush White House; from here to the Clinton White House...
REIS: Don't forget the bankers.
SKOLNICK: The... A number of banks!
KELLEY: Jim. Can you give us a comment?
REIS: It comes back to the bankers. Because the bankers have always wanted the drug trade to keep the money flowing with these Third World countries to whom they lent all...
SKOLNICK: O.K. But let me add one more thing!
REIS: ...and the drug trade is necessary.
KELLEY: Mark?
SATO: Also, this would involve the tobacco companies. Because "China White" can be smoked. What is happening now, we believe, is that the tobacco companies, in order to further addict people to cigarettes, they soak them in heroin like "China White" and they cause people to become more addicted to cigarettes!
KELLEY: Yeah. Which is [unclear] congressional subcommittee.
SKOLNICK: Let me... This one little thing: Household International is involved in this, according to the Treasury [Department unit]. The successor to the CIA-linked Nugan-Hand Bank of Australia. So Household International is not a stranger to CIA...
KELLEY: We'll be talkin' more about this another time.

I want to thank you, Sherman. You've done a lot of good work!

Mark, always a pleasure.

Jim Reis, thanks for joining us. We'll have you back.

I'm Cliff Kelley. This is "Broadside". Thanks for watching us, and we'll see you next time.

---------------------------<< Notes >>--------------------------- {1} Sports is the opiate of the masses.

{2} "austerity bankers" -- like, for example, the above-mentioned David Paul. The "austere" Mr. Paul, chief executive of the failed CenTrust Savings Bank of Miami (estimated cost to U.S. taxpayers, $2 billion) "...wasted depositor money on excesses that included $29 million for fine art, $1.4 million a year for a corporate jet, and $43,000 for limousines. (Paul paid himself $16 million a year in salary and bonuses, according to suits filed by federal thrift regulators. Among other things, he used CenTrust's insured deposits for a $7 million yacht, on which he installed gold nails and so much marble that some doubted it could stay afloat.) CenTrust was a major junk bond buyer, tied heavily to deals with Drexel Burnham Lambert." {S&L Hell by Kathleen Day. New York: W. W. Norton and Company, 1993}.

{3} Actually, Lasater did go to jail on cocaine charges (under federal law), but Clinton, a state governor at the time, granted Lasater a complete pardon after he was released.

{4} Besides Wal-Mart, another outfit I was suspicious of was the Phar-Mor chain. A friend and I used to wonder during the '80s how it was that Phar-Mor could make money: their prices were so low! Besides the low prices, we could also make use of "creative couponing" to even further lower what we had to pay. We kept wondering at the time, "How can they make money?" We joked that Phar-Mor must be subsidized by the government. Was Phar-Mor subsidized by narco-dollars? Food for thought.

{5} "...Uno fortune." Remember the popular card game called "Uno"? Tezak apparently owned that via his International Games, Incorporated.

{6} Reis has jumped ahead of Skolnick. The soybean processing plant was apparently just a cover story for the real purpose behind the Tezak-Thompson trip to China in 1986. One wonders if the facility was ever actually built here.

Brian Francis Redman bigxc@prairienet.org "The Big C"

Coming to you from Illinois -- "The Land of Skolnick"