August 14, 2001

HOSTAGES: A Multi-Part FTW Special Investigation

• Medellin Cartel Cofounder, Carlos Lehder: A Free Man in Gov't. Charade?, -- "Wife" of Drug Lord Speaks
• American International Group, Arkansas, ADFA, Contras, Goldman Sachs, Carlos Lehder and Coral Reinsurance
• Exposing CIA Covert Operations

A.I.G.

[Part Two of a Multi-Part Series]

by

Michael C. Ruppert

[© Copyright 2001, Michael C. Ruppert and From the Wilderness Publications. All Rights Reserved. May not be reprinted or redistributed without the express permission of the author ]

[EDITORIAL NOTE - From The Wilderness is a sole proprietorship and dba. It is written and edited by one person; Me. I do almost all of the research. Therefore, in the following story, for both legal reasons and for better reading I have decided to use the personal pronouns "I" and "me" instead of standard editorial references in the third person.]

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This series is dedicated to Mark Swaney of the Ozark Gazette for his intellectual courage and tenacity; to John McGlaughlin, the straightest and toughest man who ever honestly carried a badge; to Celerino Castillo III, with a heart bigger than his beloved Texas; to all the young men and women, mostly minorities, who are serving up to life in prison for crimes that don't remotely compare to those of Carlos Lehder; and to all the innocents in Colombia who stand at the brink of the next Vietnam War.

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There are mounting holes in the story of a woman, Coral Talavera Baca (henceforth referred to by her maiden name Talavera), who has claimed to be the wife of Medellin Cartel co-founder, Carlos Lehder, deepening the mystery about relationships between her, Lehder himself, the insurance giant American International Group (AIG), and the Central Intelligence Agency. These new discrepancies, including her prior confirmation of the authenticity of documents now suspected of being forged, have raised the possibility that the U.S. Government, in partnership with AIG, has been deliberately planting false information in the press to support the woman's claims about Lehder's reported freedom and activities. Talavera has been simultaneously described as either Staff Counsel for AIG's in house San Francisco law firm or as its office manager.

In Part I of this series we reported that other journalists, who have asked not to be identified, had received the same documents we continue to examine here. Some of those documents purport to be official reports from the U.S. Treasury and U.S. Attorney's offices. As FTW moves deeper into its multi-part investigation - inspired by revelations of possible 1987-92 drug money laundering involving AIG, Goldman Sachs and the Arkansas Development Financial Authority (ADFA) - attention now focuses on Talavera's employer, AIG. These events increased my interest in the 1987 founding of Coral Reinsurance (Coral Re) by AIG, Goldman Sachs (whose then Vice Chairman Robert Rubin served as Treasury Secretary in the Clinton Administration) and ADFA. Lehder, arrested in 1987, was allowed to keep almost $3 billion in assets in a move severely criticized by Merkle. Where did that money go? Was it hidden it in a major insurance company with cash flows large enough to conceal it? This question, more than any other, except establishing Lehder's current status, prompted me to begin this investigation.

What is known about the firm which employs Talavera, who is not a lawyer, and permits her to represent herself as "Staff Counsel" for its San Francisco legal office while simultaneously representing herself as the wife of a one-time cocaine cartel head? On June 22, just two days after I had lunch with her and confirmed that I was writing a story, a receptionist at Brown and Boland, AIG's San Francisco in-house counsel, told me and others that Talavera had fled her employment and gone to Cuba. Yet the firm, located in the AIG building and using AIG e-mail addresses, is currently announcing in new, dated voice mail messages, that she is still the office manager.

FTW has also conducted an extensive investigation into AIG and its predecessors, including the C. V. Starr Insurance Companies, revealing deep connections to US intelligence dating back to the Office of Strategic Services (OSS) in World War II. These connections include documented CIA operatives connected to drug smuggling from Southeast Asia and a current board member, Frank Wisner, Jr., whose father was a key figure in the creation of the CIA. History, as well as AIG's current operations, suggest that these relationships continue unabated today.

These connections may go a long way toward explaining the behavior of Talavera, a woman whose education, work experience and history apparently do not qualify her to manage a legal office which, according to AIG spokesman Michael Murphy, specializes in the international operations of a company operating in 130 countries and with year 2000 revenues of $46 billion.

While the mystery deepens about the woman claiming to be his wife, the key question as to whether or not Lehder is free remains unanswered.

In Part I of this series I reported that through a number of vehicles including correspondence, e-mails, a telephone listing in the name of Carlos Lehder, tape recorded conversations and in-person statements Coral Talavera had represented to a number of people, including a retired DEA agent, me and others that she was the wife of Medellin Cartel co-founder Carlos Lehder. In an on-the-record interview and a legally tape recorded conversation she has also vouched for the authenticity of documents that have either been shown to be forged or are now seriously suspected of being forged. She additionally made it clear that Lehder was out of prison, working for the United States government and directly connected to the CIA and the U.S. Treasury. This scenario was circumstantially, but well supported by statements from a number of credible sources, including reporters, Congresswoman Maxine Waters and Lehder's prosecutor (former U.S. Attorney Robert Merkle). Their independent statements gave credibility to many of Talavera's assertions. And suspicion or belief has been widespread that Lehder is, in fact, free -- regardless of Talavera's actions. All this is in spite of the fact that Lehder has been officially serving 55 non-parolable years in prison after giving testimony of questionable value in the 1990 trial of former Panamanian dictator Manuel Noriega. Noriega's prosecutor, Robert Mueller, who put Lehder on the stand, has just recently been confirmed to head the FBI.

During a lunch meeting with Talavera on June 20 of this year, she went on the record with me stating that she had worked for AIG since 1994 and that she also owned a currently existing company named Capital Investment Group, Ltd. (CIG) in the Bahamas. She had earlier written me, speaking for Lehder, stating that neither she nor Lehder had any connection to Coral Re. In a 1999 tape recorded conversation she had discussed her marriage to Lehder and e-mail notifications allegedly sent by him introducing her as his wife. My investigation since that time has proven all of these assertions, and many others allegedly made to colleagues or social contacts, are lies at worst, or seriously suspect, at best.

One of the critical documents discussed in Part I of this series was a U.S. Treasury "Report of Investigation," the authenticity of which I had been unable to ascertain despite repeated contacts with Treasury. Since publication of Part I have received communication from "Kincaid," a confidential legal source, who has obtained an evaluation of that document from Lehder's current legal team, that the document is not authentic. This was the same document that, at the June 20 lunch meeting, Talavera went on the record to evaluate, line by line, and state was a real document that had been filed in a court case that she would not disclose to me.

The purpose of this portion of the on the record interview was to clarify Talavera's relationship with a Bahamian investment company known as Capital Investment Group, Ltd.

Although Bahamian law provides great secrecy for corporations, I was able to learn in late July that CIG in the Bahamas was "not listed" on government records. Through a confidential source with Caribbean banking connections, I was told that a banking official offered four possible explanations for CIG's "lack of registry." They include: the company was never formed; the company failed to pay dues; the file was lost; and, the file was lost intentionally at the request of the Prime Minister or the Attorney General. Coincidentally, the largest single shareholder in AIG, the Starr International Company (SICO), owning 13.62% of AIG stock, is also headquartered in the Bahamas.

Information, developed while looking further into Talavera's background now casts suspicion on the 1999 reported birth of a son, allegedly fathered by Lehder, as well as her employment history, education and qualifications to manage a legal office. So, with the exception of the statement that neither she nor Carlos Lehder had anything to do with the founding of Coral Re, almost all of Talavera's statements regarding her history have been shown to be false. This now calls the Coral Re denial into question as well.

All of this begs the question as to why AIG would protect and employ a woman engaged in these and other behaviors and with a history that could only damage the company's reputation. The one fact of Coral Talavera's life that has not been called into question by any of the sources I have contacted is that Coral knew and had a relationship with Carlos Lehder in the 1980s. The suspicions of many that Lehder is free have not yet been allayed. So these disturbing developments also drive home the importance of a question that the US government still has not answered. Where is Carlos Lehder and what motive could the government -- or AIG -- have for wanting some people to believe, or know, that he is free? If I am so patently wrong in what I have reported in this investigation, including the publication of the tape- recorded conversation wherein Talavera openly talks about Lehder's freedom and says that she is his wife, why doesn't the government just deny it, produce Lehder, discredit Talavera and state that the rest is pure bunk? Is there a legend -- a cover story -- that the CIA and AIG are trying to protect for the benefit of unknown third parties in other parts of the world?

Why would AIG spokesman Michael Murphy have stated, after speaking with me and learning of Talavera's representations regarding Lehder, that he mentioned them briefly to her but did not pursue them because he, "didn't want to pry"?

Deconstructing Coral

Coral Talavera's life has improved dramatically since 1995, the year that she provided San Jose Mercury News reporter Gary Webb with documents including federal grand jury transcripts that started an investigation which subsequently established, through government records and a CIA Inspector General report, that the CIA was a hands-on player in the drug trade during the Contra war years of 1982-88. According to records filed in a protracted and contentious 1994 divorce case involving a previous husband -- which I obtained from the court -- Talavera was working as a legal secretary for the Oakland law firm of Hanna, Brophy et al. Her salary was approximately $26,000 per year and, according to a spokesperson for the firm which I also visited recently, she was employed there for two years until February, 1994. Hanna, Brophy specializes in Workman's Compensation defense of insurance companies in California.

Confidential sources familiar with Talavera led me to another law firm, Schmit, Morris, Bitner and Schmit where she reportedly worked throughout 1995 and into 1996, also as a secretary. Representatives of that firm refused to disclose any information unless I presented written authorization from Talavera for them to do so. Schmit, Morris is also a law firm exclusively devoted to Workman's Compensation defense. It may be a single-client firm representing AIG which may explain Talavera's "promotion" to the in-house firm but I have been unable to confirm this.

Briefs and petitions filed in Talavera's divorce also indicate that she was the mother of one female child whose paternity was ultimately questioned and later verified as being of Talavera's then husband. In a dispute over the property settlement it was alleged that she had stolen the seal of a notary public and forged a deed giving her sole title to a piece of real estate that was later judged to be community property. This fact lends credibility to allegations made by a number of people, who asked not to be identified, that she was the likely source of the forged documents. Those include forged newspaper stories and magazine articles, alleged memoranda from an unspecified U.S. Attorney's Office, a faked custom printed invitation to a birthday party allegedly sent by Lehder, photographic surveillance reports (including one purporting to be of her newborn son, Carlo), and the Treasury report which was described as "consistent with similar reports" by a source familiar with Lehder's case. [Some of these documents are posted on the FTW web site at www.copvcia.com. ]

It was also alleged in the divorce settlement that Talavera had deliberately placed the name of someone other than the real father, her then husband, on the birth certificate of her daughter. Even though she told me, during a 1998 unsolicited phone call, initiated by her, that she was going to have a child by Lehder, people who knew her during the period state that she was never pregnant. As Talavera's story fell apart I checked birth records in two Bay Area counties and found no recorded births listing Talavera as the mother aside from the 1992 birth of her one known daughter. Yet, in the 1999 taped conversation with Castillo, Talavera specifically referred to a purported news story entitled Beauty and the Beast which described a society function which Talavera and Lehder allegedly attended in 1999, "just three days after the birth of her son." During the conversation with Castillo, Talavera did not dispute this reporting about the birth. Instead she went to lengths to castigate the mean-spirited people who had written the story for calling Lehder, her husband, a beast. Asked by Castillo what paper had written the story Talavera stated on the tape, "Aw, who the hell knows?"

One document that seems beyond Talavera's ken, however, is a completely rewritten and re-typeset article from the August, 2000 issue of Architectural Digest, in which the 1,000 word story about the Ixtapa, Mexico home of a Levi Strauss executive was completely rewritten with copy about the new home of Mr. and Mrs. Carlos Lehder. In numerous conversations and in written correspondence I found Talavera to be a good communicator, at times very good, but her writing did not reach the style and skill of the professional journalist who had to rewrite the story and make the copy fit exactly into the same photograph-filled layout before faxing it to me. Indeed, there is nothing in Talavera's educational or employment background, that I have found, to indicate such skill. In fact, her statements to colleagues about her education also reveal more glaring holes in her story.

Acting again on information from confidential sources who have worked with Talavera, I learned that she had allegedly told people that she had BA and MBA degrees from St. Mary's college in the Bay Area. Lacking the ability to quote these sources by name I cannot confirm whether she made the representations or not. However, a check with the registrar at St. Mary's has revealed that she earned a BA in Liberal Arts in 1988 but has subsequently earned no advanced degrees of any kind. The registrar's office also stated that Talavera was currently enrolled in a graduate program but that it is not an MBA program.

All of these revelations prompted me to recontact Coral's "former" employer on August 3 to see what I could learn about her employment at AIG. It was then that I heard the voice messages informing me that she was still there. These messages, recorded within the last three weeks by senior attorneys Robert Brown and Larry Kloenhamer, both specifically refer callers to Office Manager Coral Talavera if the caller needs immediate assistance. A switchboard operator also confirmed Talavera's current status with AIG. Another interesting fact is that, on his current resume with the California State Bar Association, Robert Brown states that he is a Vietnam-era veteran of U.S. Army Special Forces. There is abundant evidence linking Special Forces to covert CIA operations and drug smuggling during the Vietnam War.

Credible sources with longstanding legal and business experience are perplexed to explain Talavera's apparent meteoric professional rise between 1992 and 1996. Asked about the transition from legal secretary at a Workman's Comp defense firm to office manager for the firm handling some of AIG's international operations, a legal expert with more than 20 years of experience in a variety of law offices summed up general reactions to Talavera's rise saying, "It's unprecedented."

The question as to what AIG knew and when it knew it gets stickier with the fact that, in no less than ten e-mail messages to me, Talavera had a signature block reading, "Coral Talavera, AIG Staff Counsel, 121 Spear Street, Suite 410, San Francisco, CA 94105. [An example of this can be viewed on my web site at www.copvcia.com]. The legal expert told me that this practice would be illegal in the state of Florida. A spokeswoman for the California State Bar Association told me on August 5 that the use of the term was, at best, misleading. She referred me to the San Francisco County District Attorney's office which subsequently stated that the action could be a violation of California's Business and Professions Code. Although Talavera was quick to point out in a number of conversations that she was not an attorney, the use of the term in official correspondence, might give AIG's overseas clients a different impression.

I have left three messages at AIG's law offices in San Francisco seeking clarification. At press time no calls have been returned. The current voice mail messages refer to Talavera as the "office manager."

So what is known then about the firm which employs Talavera and permits her to represent herself as Staff Counsel for its San Francisco legal office while simultaneously representing herself as the wife of a one-time cocaine cartel head?

Is it possible that AIG's CEO Hank Greenberg, a legendary stickler for detail and hands-on manager, would permit such activity, including the representation about owning an offshore investment company that might compete with AIG? In a June interview, AIG spokesman Michael Murphy, head of AIG operations in the Bahamas and reported to be Greenberg's right-hand man said, "Whenever there's the slightest hint of anything improper or of misuse of funds, [AIG CEO Hank] Greenberg is the first guy to lead the posse and clean house." I placed one follow-up call to Murphy's office for further clarification but it was not returned.

I was able to locate two sources in the insurance industry who were familiar with AIG and ask them if Talavera could be doing all this without Greenberg's knowledge. One response was short and direct, "The possibility that this is going on without Greenberg knowing is less than zero."

The second source was a bit more diplomatic. "M.R. Greenberg is a legendary leader. All current and former AIG employees know he is not only a visionary but a detail oriented person on all aspects of the firm's business activities worldwide. The General Counsel of AIG, Ernest Patrikis, was the senior legal officer of the Federal Reserve Bank of New York, and given the scrutiny AIG is subject to, it would surprise me if Mr. Greenberg was not aware. Sometimes, however, in a big company things slip by, but when he becomes aware, the situation is addressed quickly."

Deconstructing AIG

The seemingly mundane insurance business is, in fact, one of the primary weapons of intelligence gathering around the world. And the founder of AIG, Cornelius Starr, was an architect of its use in World War II. Consider these

quotes from a September 22, 2000 story by Los Angeles Times reporter Mark Fritz entitled, "The Secret (Insurance) Agent Men."

"COLLEGE PARK, Md.ÑThey knew which factories to burn, which bridges to blow up, which cargo ships could be sunk in good conscience. They had pothole counts for roads used for invasion and head counts for city blocks marked for incineration.

"They werenÕt just secret agents. They were secret insurance agents. These undercover underwriters gave their World War II spymasters access to a global industry that both bankrolled and, ultimately, helped bring down Adolf HitlerÕs Third Reich.

"Newly declassified U.S. intelligence files tell the remarkable story of the ultra-secret Insurance Intelligence Unit, a component of the Office of Strategic Services, a forerunner of the CIA, and its elite counterintelligence branch X-2.

"Though rarely numbering more than a half dozen agents, the unit gathered intelligence on the enemyÕs insurance industry, Nazi insurance titans and suspected collaborators in the insurance business. But, more significantly, the unit mined standard insurance records for blueprints of bomb plants, timetables of tide changes and thousands of other details about targets, from a brewery in Bangkok to a candy company in Bergedorf. 'They used insurance information as a weapon of war,' said Greg Bradsher, a historian and National Archives expert on the declassified records. That insurance information was critical to Allied strategists, who were seeking to cripple the enemyÕs industrial base and batter morale by burning citiesÉ

"Germany had 45% of the worldwide wholesale insurance industry before the war began and managed to actually expand its business as it conquered continental Europe. As wholesalers, or 'reinsurers,' these companies covered other insurers against a catastrophic loss that could wipe out a single company. In the process, the wholesaler learned everything about the lives and property they were reinsuring [emphasis, mine]É

"The men behind the insurance unit were OSS head William "Wild Bill" Donovan and California-born insurance magnate Cornelius V. Starr. Starr had started out selling insurance to Chinese in Shanghai in 1919 and, over the next 50 years, would build what is now American International Group, one of the biggest insurance companies in the world. He was forced to move his operation to New York in 1939, when Japan invaded China. In the early years of the war, the German insurance industry expanded its business as it conquered continental Europe. Nazi insurance brokers who traveled with combat troops during invasions also scoured local insurance files for strategic dataÉ"

On the special value of reinsurance as a vehicle for intelligence gathering Fritz wrote:

"Such convoluted business dealings were traced largely through the work of Ernest Stiefel, a member of the intelligence unit who diagrammed the way insurance companies pooled their risks, invested in and insured each other and, as a result, willfully or witlessly shared data about nations at war. 'Stiefel mapped the entire system, said [Timothy] Naftali, a historian at the University of VirginiaÕs Miller Center of Public Affairs. "Each time I take a piece of your risk, youÕve got to give me information. I am not going to reinsure your company unless you give me all the documents. ThatÕs great intelligence informationÉ"

Later in the story Fritz confirmed the value of reinsurance as a vehicle for money laundering:

"With the Axis defeat imminent, U.S. intelligence officials focused greater attention on ways the Nazis would try to use insurance to hide and launder their assets so they could be used to rebuild the war machine..."

And how did Starr benefit from his service? Fritz writes:

"Starr sent insurance agents into Asia and Europe even before the bombs stopped falling and built what eventually became AIG, which today has its world headquarters in the same downtown New York building where the tiny OSS unit toiled in the deepest secrecy.

Starr died in 1968, but his empire endures. AIG is the biggest foreign insurance company in Japan. More than a third of its $40 billion in revenue last year came from the Far East theater that Starr helped carpet bomb and liberate.

"In The Shadow Warriors: OSS and the Origins of the CIA (Basic Books, 1983) author Bradley F. Smith shed more light on Cornelius Starr and the OSS.

"It [a secret intelligence operation in China] was formed in April 1942, when [Bill] Donovan persuaded British insurance magnate C.V. Starr to let C.O.I. (Covert Operations Intelligence) use his commercial and insurance connections in occupied China and Formosa to create a deep cover intelligence network. Although the State Department was nervous about the operation, Donovan went ahead and, with the cooperation of the U.S. Army, bypassed the diplomats in operating the communications system. Starr's people handled their own internal communication, then turned over their intelligence findings to [General Richard] Stillwell's headquarters for dispatch to the U.S. Starr, who was residing in the U.S. at the time, provided these services to the Allied cause. Later Starr became disgusted with what he considered Donovan's inefficiency and transferred his services to the British S.I.S. But the Starr-Donovan connection worked in China at least until the winter of 1943-44.

"The establishment of the Starr intelligence network, an operation so secret that it even escaped the attention of Chiang's [Kai Shek] security police (and of historians heretofore), was a major accomplishment for an intelligence operation barely six months old" [p.133]

Drug Connections

The War Conspiracy (Bobbs-Merrill, 1972) by Peter Dale Scott, Ph.D. of UC Berkeley is a book few Americans have seen. The compelling and meticulously documented history of the creation of the Vietnam War was rushed from bookstores and shelves almost as soon as it was published. Scott, author of Deep Politics and the Assassination of JFK, The Iran-Contra Connection and Cocaine Politics is an expert on the interface between covert operations and the international drug trade. In Chapter Six of The War Conspiracy, entitled "Opium, the China Lobby, and the CIA," Scott traces the connections between drug trafficking in Southeast Asia and American intelligence operations. There are detailed references to C.V. Starr and connections with some figures, like CIA veteran Paul Helliwell, who have been irrevocably and blatantly tied to the drug trade. Those connections also lead directly into the so-called "China Lobby" and firms identified as either CIA proprietaries or "affiliates" such as Sea Supply, Inc. (run by Helliwell), Civil Air Transport (CAT), a CIA proprietary, Civil Air Transport Co., Ltd. (CATCL) -- a separate firm not owned by but affiliated with the CIA through CAT-- and Air America, an evolution of Civil Air Transport. In 1957 the Airdale Corporation which owned 100 per cent of Air America changed its name to Pacific Corp. In 1976 CIA General Counsel Lawrence Houston testified before the Senate's Church Committee looking into intelligence abuses about CIA Air operations. When asked what the one single holding company, above all others, was at the top of CIA proprietary and contract air operations, he identified Pacific Corporation. According to published reports, Houston also testified that the CIA also had interests in investment and insurance companies.

Pacific Corp -- which one source has told me is currently insured by AIG -- and the CIA have, in the 1990s, been connected with the "laundering" of some 28 C-130 military transport aircraft into the hands of private, forest fire, air tanker contractors in the U.S. Subsequently, many of those C-130s turned up all over the world. Some were directly involved in drug trafficking and one in particular, operated by Aero-Postale de Mexico, was seized with a billion dollars in cocaine aboard in Mexico City in 1996. [See FTW, Vol I, No 10 - Dec, 1998]

A key figure in the post-war operations was lawyer Tommy Corcoran, a legendary "fixer" in the Roosevelt Administration, who went on to represent Nationalist Chinese financial interests after the Communists took power in 1949. Corcoran and Helliwell worked closely together in Asia. One of the critical and well-documented U.S. responses to the Communist takeover was to fund remnants of the Chinese Nationalist army -- who had fled into Burma, Thailand and Laos -- with opium. Much of that money, along with the drugs, found its way into the U.S. As noted by writers like the late Jonathan Kwitny of The Wall Street Journal in The Crimes of Patriots (Penguin, 1987) and by Professor Alfred McCoy of the University of Wisconsin in The Politics of Heroin (1972, 1991, Lawrence Hill Books), Helliwell paid the troops using five-pound "sticky" bars of heroin. Helliwell later went on to head Castle Bank and Trust in Florida and the Bahamas and then was heavily involved with The Nugan Hand Bank in Australia and the U.S. Both banks have been heavily linked in official investigations to both drug trafficking and money laundering while also moving money for the CIA.

In The War Conspiracy Scott writes:

"For it is a striking fact that the law firm of Tommy Corcoran, the Washington lawyer for CATCL and [China Lobbyist] T.V. Soong, had its own links to the interlocking worlds of the China Lobby and of organized crime. His partner W.S. Youngman joined the board of U.S. Life and other insurance companies, controlled by C.V. Starr (OSS China) with the help of Philippine and other Asian capital. Youngman's fellow-directors of Starr's companies have included John S. Woodbridge of Pan Am, Francis F. Randolph of J. and W. Seligman, W. Palmer Dixon of Loeb Rhoades, Charles Edison of the postwar China Lobby, and Alfred B. Jones of the Nationalist Chinese government's registered agency, the Universal Trading Corporation. The [Senate] McClellan Committee heard that in 1950 U.S. Life [later part of AIG] (with Edison as a director) and a much smaller company (Union Casualty of New York) were allotted a major Teamsters insurance contract, after a lower bid from a larger and safer company had been rejected, [Jimmy] Hoffa was accused by a fellow trustee, testifying under oath before another committee, of intervening on behalf of US Life and Union Casualty, whose agents were Hoffa's close business associates Paul and Allen DorfmanÉ

"We find the same network linking CIA proprietaries, war lobbies, and organized crime, when we turn our attention from CAT to the other identified supporter of opium activities, Sea Supply, Inc. Sea Supply, Inc. was organized in Miami, Florida, where its counsel, Paul E. Helliwell, doubled after 1951 as the counsel for C.V. Starr insurance interests, and also as the Thai consul in Miami..."

The historical connections to CIA covert or proprietary air operations are interesting in light of the fact that AIG proudly announces in its 2000 annual report that with 494 full-sized jets -- 89 of which it manages itself -- it owns "the world's most modern fleet of aircraft." AIG customers include major airlines and a number of air transport companies. AIG also reported that in 2000 it leased additional aircraft "to a number of established customers" in South America.

CIA proprietary ownership or interest in companies is very difficult to detect. But, it has been proven by writers like Scott and many other researchers who combed through the paperwork that surfaced during the Iran-Contra scandals of the 1980s, where Air America assets were laundered into companies like Southern Air Transport and Evergreen Air. The single largest stockholder in AIG, the Starr International Company (SICO), holds 13.62% of AIG stock. Aside from knowing that Maurice Greenberg owns 21.86% of SICO (source, SEC) we may never be able to find out who, or what, owns the rest.

They Even Put It In Writing

In September 1997 a group of business and labor executives* reviewed and made recommendations on the use of sanctions by the President of the United States to influence world events. One of those executives was Oackley Johnson of AIG. The group, called the Sanctions Working Group (SWG) of the Department of State's Advisory Committee on International Economic Policy, having completed its review of the way the White House has imposed sanctions on foreign governments, completed a detailed report which was sent to the State Department by the Committee head, Michael Gadbaw of General Electric. The advisory panel called for massive revisions in the way sanctions were selected and imposed in foreign affairs to punish or induce foreign governments to behave the way the U.S. wants.

Approval of the recommendations was unanimous from the business community and opposition was unanimous and acerbic from organized labor representatives who sent their dissent separately to the State Department. The report, they said, cared about nothing but the financial interests of major U.S. Corporations.

As an Appendix to the report, which was found at http://www.usaengage.org/studies.html, Footnote 4 following Tab 5 listed valid U.S. foreign policy objectives. It states: This report addresses sanctions undertaken pursuant to laws or regulations that authorize or mandate unilateral economic sanctions in order to achieve a foreign policy objective.

"The foreign policy objectives may include the transition to democracy, opposing terrorism or support of terrorist activities, sanctioning drug production and transit or trafficking, supporting human and worker rights and religious freedom, opposing proliferation of weapons of mass destruction, and protecting the environment."

The language "support of terrorist activities" is ambiguous. It could mean that the U.S. would punish those who support terrorist activities or that it might support terrorist activities itself. The drug trafficking language also catches the panel on the horns of a dilemma. As defined in the American Heritage dictionary, to sanction something means to "grant authoritative permission or approval." A secondary meaning means "to punish." In government documents and reports, especially those laying out or recommending policy, every word is reviewed dozens of times. Lawyers and decision makers sign off on every aspect. Drafts usually circulate for weeks before final approval. This language may mean exactly what it says. And if there is ambiguity then it must have been intended.

The whole purpose of From The Wilderness is to teach the world that it is a specific intent of Wall Street and the U.S. government to give authoritative permission and approval to the drug trade to ensure that drug profits -- the money -- comes back under the control of the people who sanctioned the trade to begin with. Is that what Coral Talavera is doing at AIG? I e-mailed Oackley Johnson at AIG and asked him to comment on the report. At press time he has not responded. I have also solicited (again) comment from AIG Corporate offices on the content of this story. Also no response. But I hope to have something from them for Part III in September.

AIG has also been connected, albeit indirectly, to a major money laundering case. As the insurance carrier for the Bank of New York (BoNY) they are defending BoNY in a suit filed this year by BoNY shareholders charging mismanagement of the bank. That suit arose from revelations (See FTW Vol II, No.7, 9/99) in the major media that BoNY had been involved in laundering between $7 and $10 billion in criminal money out of Russia during the 1990s under its Chairman, Thomas Renyi. A credible source has told me, but I have not been able to confirm it, that AIG also insures the U.S. Department of Justice which was charged with investigating BoNY and which decided not to file criminal charges in 1999.

Perhaps no one knows more about your life, not even your immediate family, than the various companies who insure you. Your health, finances, work history, medical records, driving habits and almost every other aspect of your life is recorded in insurance files and records. Is this necessarily something you want available to the CIA or any part of the government? Remember that the CIA doesn't operate under the law or respect privacy. What happens then when a giant like AIG winds up insuring parts of the government or major businesses that violate your rights or break the law?

AIG Highlights

• AIG has the largest market capitalization (total value of all shares) of any insurance or financial services organization on the NYSE -- $198.4 billion in 2000. It has operations in 130 countries.
• Ranked #7 on Forbes Super 100 list of companies. After GE, Citigroup, BankAmerica, Exxon, IBM and Ford.
• The largest U.S. underwriter of commercial and industrial insurance.
• Operates AIG Financial Services Group, which sells investments, international asset management and "advisory" services.
• The largest seller of retirement annuities in the U.S. through its acquisitions of SunAmerica and American General in 1999 and 2001 respectively.
• AIG is licensed to operate banks in three countries, including the US (1999) and also issues credit cards.

History

• Originally formed as the Asia Life/C. V. Starr Companies in the 1930s by founder Cornelius Starr who served with the OSS during World War II. The Starr corporation shared the same office building as OSS headquarters in New York, and functioned as an intelligence conduit on shipping, manufacturing and industrial bombing targets in Asia and Germany throughout WW II. [The Los Angeles Times, Sept. 22, 2000]
• Early business centered primarily in China and Asia. Starr interests centered in Asia and Panama.
• 1951 - Changed name to American Life Insurance Company (ALICO).
• Acquired major U.S. insurance companies in the 1950s and 60s.
• 1967 - Incorporated as American International Group (AIG).
• 1969 - First public offering.
• First western insurance company to create joint ventures with Hungary, Poland and Romania in the 1960s.
• In 1980 established joint venture with the People's Insurance Company of China.
• First insurance company licensed to do business on its own in Japan (1952), Mainland China (1990), and Vietnam (2000).
• Member and staunch supporter of the World Trade Organization. During 1997 WTO negotiations, AIG collaborated directly with Treasury Secretary Robert Rubin to negotiate Asian financial, investment and trade agreements covering 102 countries, which one report described as bullying and marked by "messages back and forth from Geneva to Washington, andÉ reports, between the US Treasury and American International Group." [Third World Economics, No. 175, 16-31, 12/97].
• During the 1990s involved with U.S. investment in Russia (overseen by Goldman Sachs and The Harvard Endowment) through Brunswick Brokerage. Secured a $300 million OPIC (Overseas Private Investment Corporation) guarantee for a Russian investment fund. [Paul Likoudis, Editor, The Wanderer.]
• AIG has "joint venture" interests in Latin America through ZonaFinanciera with Citibank which in May 2001 purchased Mexico's Banamex and will be placing reported drug money launderer and trafficker Roberto Hernandez on its board of directors.
• AIG insures more than half of the major US airports.
• The world's "market leader" in leasing and remarketing of advanced technology commercial jet aircraft - "the most modern fleet of aircraft in the world. " With 2000 revenues of $2.44 billion AIG owns a fleet of 494 jets, 89 of which it "manages" itself. Clients include airlines in U.S., Canada, Europe, Asia, the Middle East and South America where, in 2000, it leased, "additional aircraft to a number of established customers."

Maurice "Hank" Greenberg, 75 -- Chairman and CEO of American International Group (AIG)

• WWII, Served with US Army Signal Corps and Army Rangers
• LL.B., New York Law School, 1950
• Korean War, Investigated reported massacres at POW camps run by UN/US personnel
• Elected AIG President in 1962, CEO in 1967 and Chairman in 1989.
• Former Chairman and Director of the New York Federal Reserve Bank.
• Forbes 111^th richest man in the world (More than $4 billion net worth)
• Vice Chairman, Council on Foreign Relations
• Vice Chairman, Center for Strategic and International Studies
• Member, Board of Directors, New York Stock Exchange
• Member, Trilateral Commission
• Member, The Bilderberger Group
• Chairman, The Nixon Center
• Chairman, U.S.-China Business Council
• Chairman, The Starr Foundation
• Accompanied President George Bush on his trade mission to China in 1992
• Major contributor to The Heritage Foundation
• Name floated by Senator Arlen Specter to become CIA director in 1995 (Reported in U.S. News and World Report - 2/20/95)

AIG Board's Board of Directors as Reported to the SEC

• M. BERNARD AIDINOFF -- SENIOR COUNSEL, SULLIVAN & CROMWELL (Attorneys). Director since 1984 -- Age 72. [NOTE: Sullivan and Cromwell is the legal firm that was home to Eisenhower Secretary of State John Foster Dulles and his brother Allen Dulles, who was a key OSS leader during WWII and who served as CIA Director under Presidents Eisenhower and Kennedy.]
• ELI BROAD -- CHAIRMAN, SUNAMERICA INC (a wholly-owned subsidiary of AIG). Director since 1999 -- Age 67.
• PEI-YUAN CHIA -- RETIRED VICE CHAIRMAN, CITICORP AND CITIBANK, N.A. Director since 1996 -- Age 62.
• MARSHALL A. COHEN -- COUNSEL, CASSELS BROCK & BLACKWELL (Barristers and Solicitors); FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE MOLSON COMPANIES LIMITED. Director since 1992 -- Age 66.
• BARBER B. CONABLE, JR. -- RETIRED; FORMER PRESIDENT, WORLD BANK, AND FORMER MEMBER, UNITED STATES HOUSE OF REPRESENTATIVES. Director since 1991 -- Age 78.
• MARTIN S. FELDSTEIN -- PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY; PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL BUREAU OF ECONOMIC RESEARCH (Nonprofit Economic Research Center), Director HCA and TRW. Director since 1987 -- Age 61.
• ELLEN V. FUTTER -- PRESIDENT, AMERICAN MUSEUM OF NATURAL HISTORY Director, Bristol-Myers Squibb Company Consolidated Edison, Inc. (also serves as Trustee of Consolidated Edison Company of New York, Inc.), J.P. Morgan Chase & Co. Director since 1999 -- Age 51.
• MAURICE R. GREENBERG -- CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AIG, Director, Transatlantic Holdings, Inc. ('Transatlantic'), which is owned 60.0 percent by AIG. Also serves as Chairman of Transatlantic, a director, President and Chief Executive Officer of C.V. Starr & Co., Inc. ('Starr'), and a director of Starr International Company, Inc. ('SICO') and International Lease Finance Corporation ('ILFC'); Starr and SICO are private holding companies (see 'Ownership of Certain Securities'); ILFC is a wholly-owned subsidiary of AIG. Director since 1967 -- Age 75.
• CARLA A. HILLS -- CHAIRMAN AND CHIEF EXECUTIVE OFFICER, HILLS & COMPANY; FORMER UNITED STATES TRADE REPRESENTATIVE. (Hills & Company provides international investment, trade and risk advisory services). Director, AOL Time Warner Inc., Chevron Corporation, Lucent Technologies Inc. Director since 1993 -- Age 67.
• FRANK J. HOENEMEYER -- FINANCIAL CONSULTANT; RETIRED VICE CHAIRMAN, PRUDENTIAL INSURANCE COMPANY OF AMERICA. Director, Carey Fiduciary Advisors, Inc. Cincinnati, Inc. Director since 1985 -- Age 81.
• RICHARD C. HOLBROOKE -- FORMER UNITED STATES AMBASSADOR TO THE UNITED NATIONS; FORMER VICE CHAIRMAN, CREDIT SUISSE, FIRST BOSTON. Elected February 7, 2001 -- Age 59.

• EDWARD E. MATTHEWS -- VICE CHAIRMAN -- INVESTMENTS AND FINANCIAL SERVICES, AIG. Director, Transatlantic. Also serves as a director of Starr, SICO and ILFC, -- Director since 1973 -- Age 69.
• HOWARD I. SMITH -- EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, AIG. Director, Transatlantic, 21st Century Insurance Group ('21^st Century'), which is owned 62.8 percent by AIG. Also serves as a director of Starr, SICO and ILFC -- Director since 1997 -- Age 56.
• THOMAS R. TIZZIO -- SENIOR VICE CHAIRMAN -- GENERAL INSURANCE, AIG. Director, Transatlantic. Also serves as a director of Starr and SICO. -- Director since 1986 -- Age 63.
• EDMUND S.W. TSE -- VICE CHAIRMAN -- LIFE INSURANCE, AIG. Also serves as a director of Starr and SICO. -- Director since 1996 -- Age 63.

• JAY S. WINTROB -- PRESIDENT AND CHIEF EXECUTIVE OFFICER, SUNAMERICA. Director, Anchor National Life Insurance Company and First SunAmerica Life Insurance Company, wholly-owned subsidiaries of AIG. Also serves as a director of Starr and SICO -- Director since 1999 -- Age 44.
• FRANK G. WISNER -- VICE CHAIRMAN -- EXTERNAL AFFAIRS, AIG. Director, EOG Resources, Inc. -- Director since 1997 -- Age 62. [NOTE: Wisner is the son of former CIA deputy Director, Frank Wisner, Sr. who was present at the creation of the CIA. As head of the Office of Policy Coordination, the forerunner of the CIA's Directorate of Operations. Wisner, Sr. once boasted, "I can play the media like a mighty Wurlitzer." In a 35 year career with the State department, Wisner, Jr. served as U.S. Ambassador to India, the Philippines, Egypt and Zambia.]
• FRANK G. ZARB -- CHAIRMAN, NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AND THE NASDAQ STOCK MARKET, INC. -- Elected February 7, 2001 -- Age 66
• AIG is a client of Henry Kissinger and Associates. Kissinger is the Chairman of AIG's International Advisory Board.

[© Copyright 2001, Michael C. Ruppert and From the Wilderness Publications. All Rights Reserved. May not be reprinted or redistributed without the express permission of the author ]

On or about August 16, 2001 FTW subscribers will be able to visit a secure are of our web site and download selected portions of the taped conversation between Coral Talavera and Celerino Castillo. Watch the FTW web site for exciting new features -- for paid subscribers only! If you are a subscriber, please make sure that we have your e-mail address to send you your passwords.

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