Hollywood Whitewashes History into Action Adventure

The latest Tom Cruise movie, American Made, manages the incredible -- to sympathize with an amoral drug smuggler and government informer whose lies sparked a deadly, early example of fake news. The target of the disinformation was Nicaragua, the authors were the President and his men, and the Big Lie was that Sandinista leaders had struck a deal with the Medellin cartel to smuggle drugs into America. 

While director Doug Limon's thrill ride version of Barry Seal's story does acknowledge his questionable role in the Contra war, the film is really about an exuberant flyboy -- Maverick is back as an anti-hero -- who stumbles into high adventures and government conspiracies. The twist (spoiler) is that this time Cruise dies. 

Think Air America meets Mission Impossible and The Parallax View. We've seen this movie before, only this time it's a whitewash of some relevant history.

Bay of Pigs veterans Rene Corvo and Felipe Vidal were "lieutenants"
 for John Hull and provided a link between Contras and Cuban exiles.
From Iran-Contra Scandal Trading Cards by Salim Yaqub.

Let's begin with a televised speech by President Ronald Reagan on March 16, 1986. During this appearance Reagan displayed a photograph taken in Nicaragua, reportedly proving that top Nicaraguan officials were involved in cocaine trafficking. As it turned out, this was a lie. There was no real evidence, and the Drug Enforcement Agency (DEA) was later forced to issue a low-key "clarification." 

Still, the smear proved effective as a narrative changer. Like a series of Trump tweets, it distracted attention from an ongoing investigation of Contra involvement in the drug trade. And Barry Seal, apparently the only person who knew the truth about the grainy picture of men loading a plane near Managua, was already dead.

A DEA informant and pilot, Seal was murdered in Baton Rouge on February 19, 1986 -- a month before Reagan's fake news address -- reportedly on orders from the Columbian cocaine boss who had arranged the shipments in association with the Contra network. Although the assassins were captured and convicted, some believe that the CIA was also complicit in Seal's death. 

His activities, and their Contra-cocaine connections, were the subject of several in-depth investigations at the time. But Cruise sought the role because of his interest in Seal as a character. “I don’t agree with what he was doing, but you can’t help but be utterly fascinated by it,” he told People Magazine. “One of my favorite authors is Mark Twain, and Seal reminds me of one of his characters. It’s not every day you get to play a character who is a devoted husband and father and a drug runner, a CIA operative working for the DEA.”

That's one way to see it. Another appeared in a report by the International Center for Development Policy, which was directed by former UN Ambassador to El Salvador Robert White. For them, Seal was a dangerous pawn who knew too much. For example, he knew that Columbia's Medellin cartel was using a ranch owned by John Hull as a shipping point. Hull was a US citizen with CIA and National Security Council connections, and his ranch was also a Contra base for weapons shipments and recruits.

John Hull owned the ranch used by Contras and drug smugglers. 

More to the point, Seal knew that the famous photo shown on TV by Reagan was actually taken on US government orders. He had flown into a Nicaraguan airstrip with CIA cameras installed on his plane, snapping pictures that purportedly showed Pablo Escobar and other members of the Medellin cartel loading kilos of cocaine onto a plane. Seal claimed they were being assisted Sandinista soldiers. He even alleged that one of those present was a close associate of Tomas Borge, Nicaragua's Minister of the Interior. In short, he was circulating disinformation. 

Wall Street Journal reporter Jonathan Kwitny effectively debunked the accusations, establishing that there was no evidence tying any Nicaraguan officials to the drug shipment. But someone in the White House wasn't satisfied, and leaked a story about Sandinista links with the Medellin cartel, along with the photo, to The Washington Times.  Among other revelations, Edmond Jacoby's report discussed Seal’s role and appeared to out him as a government agent. As a result, noted Ambassador White, the Columbian cartel put a $2 million price on his head.

After Seal's death, Louisiana attorney general William Guste protested the government’s failure to protect their "extremely valuable witness and informant in the country’s fight against illegal drugs.” For him, Seal's murder warranted a serious inquiry, one that explained why "an important witness was not given protection whether he wanted it or not?”

American Made, which is slated for US release in late September, doesn't settle this question. But there is an obvious answer: Seal was a loose end and his shipments were just a small part of a much larger, ongoing operation to transport cocaine in exchange for funds to purchase arms. Hull and anti-Castro Cubans had begun to work together in 1983, providing refueling and packaging services on his Costa Rican ranch in exchange for up to $25,000 per shipment from the Columbians.

According to Dan Sheehan, whose interfaith law and policy center dug deeply into the private network that fueled the Contras, the same team continued to smuggle a ton of cocaine into the US each week for several more years. Its street value was $25 million per shipment. Sheehan also claimed that some of the profits were deposited in Miami and Central American banks, then later withdrawn to purchase weapons.

Similar charges were leveled in a civil complaint filed by journalists Tony Avirgan and Martha Honey. They charged that the network was responsible for a bombing in Costa Rica in which Contra leader Eden Pastora and several others were injured or killed. 

Honey and Avirgan discovered that a deal was struck between Hull, the Cuban-Americans and Contra leaders to get rid of Pastora, who had refused to merge his operations with other anti-Sandinista forces. From their Costa Rica base on Hull's ranch drugs flowed to several distribution points in the US. The profits paid for weapons from Florida, Israel and South Korea, according to the White report. When Pastora declined to cooperate, the network hired a professional assassin to eliminate him. Avirgan was one of those injured in the attack.

Now that would make a great political action thriller, one in which the heroes are independent journalists on the trail of an international conspiracy rather than a smuggler/snitch who facilitated it and got himself killed. 

On January 20, 1987, the New York Times revealed that the DEA had known for months that US flight crews transporting arms to the Contras were also smuggling cocaine on their return trips to the US. When told about the investigation, however, one crew member reportedly warned a reporter that he was under the protection of a White House official, Lt. Col. Oliver North.

Predictably, the State Department denied all knowledge of Contra involvement in cocaine deals. And the US Customs Service claimed to know nothing about any arms shipments leaving Florida without official clearance. Nevertheless, both the weapons and drugs reached their destinations, and the same network -- in which Barry Seal was one cog -- conducted both operations.

Oliver North defended the "enterprise" in Congressional Testimony. 

Over time, various elements of this covert network, which became known as the Secret Team, were exposed. For example, we learned -- and subsequently overlooked -- that as Vice President George H.W. Bush and his national security advisers had close ties with the covert air supply operation. Elliott Abrams, then in the State Department and still a foreign policy player, was directly involved in coordinating Contra activities, bringing together State, the NSC and CIA. The Department of Defense organized air drops over Nicaragua and helped to build the Contra infrastructure. The entire inter-agency program was initially under the control of CIA Director William Casey.

The private network that emerged from all these connections used the money obtained from Iran arms sales and other sources to buy weapons and ship them to Central America, South Africa, and Angola. They also worked with operations in both El Salvador and Costa Rica, moving drugs and guns back and forth. But this bigger picture doesn't feature in Limon's Catch Me If You Can take on covert war in Central America. 

After elements of the Contra-cocaine conspiracy were exposed, Seal was not the only key witness to die under mysterious circumstances. Still others were threatened, while groups attempting to bring those responsible to justice were burglarized and harassed. It sounded like high-pitched rhetoric at the time, but Christic Institute lawyer Dan Sheehan charged that ultra-right elements were responsible for a pattern of intimidation. In its Central American embassies, he claimed, the US had embedded "a series of fascist and Hitlerite cells." It's not as hard to believe thirty years later.

Of course, not everything can be tracked back to the White House, or even to the Intelligence community. But covert operations like those chronicled in American Made did become almost standard operation procedure during the 1980s. And although they were sometimes clearly illegal, they were also widely rationalized as acceptable "initiatives" in defense of democracy. 

One powerful excuse, made by President Reagan himself, was that any laws restricting military intervention did not apply to him or his national security staff. It was a bold assertion of unilateral executive power. He and his aides even claimed that, by extension, any attempts to "protect the initiative" -- and that included covering it up -- are part of the authority flowing from the sovereign president. We may soon hear the same argument again, as more damaging details emerge about Russia, Trump and today's Secret Team.

Greg Guma is the Vermont-based author of “Dons of Time,” “Uneasy Empire,” “Spirits of Desire,” "Big Lies," and “The People’s Republic: Vermont and the Sanders Revolution.” His latest book is “Green Mountain Politics: Restless Spirits, Popular Movements.” 

The Paranoid Style: From Reagan to Trump

For many years Robert Welch warned his readers about the conspiracy (italics his) that was plotting to merge the United States and Soviet Russia. His big idea was that repeated exposure could ultimately stop the "socialist nightmare with its perpetual shortages of everything and with its regimentation of individual human lives like that of barnyard animals."

As editor of The John Birch Society Bulletin, Welch was a resilient advocate for racism and sexism decades before Donald Trump's Reality TV reboot. Welch opened each issue with his personal "reflections on the news" -- usually an essay on how US leaders and people like Ralph Nader were destroying the family and civilization. The rest of the small, austere publication was devoted to reports like "United Nations - Get US Out," priorities like a windfall profits tax and stopping the Equal Rights Amendment, and turgid notes from Birch Society meetings.  

Welch couldn't decide who he disliked more, anti-nuclear activists or Rockefeller Trilateralists. As a result, he cast them as partners in a massive plot. It was a highly paranoid theory, but by no means the only one that polluted the political bloodstream in the run up to Ronald Reagan's election.

In fact, by 1980 the claims of Birchers were less sensational than those of other groups. Take the New Christian Crusade Church, which promoted unbridled racism in a tabloid newspaper, Christian Vanguard, or the US Labor Party, which served up doomsday scenarios about "controlled disintegration," orchestrated by agents of the Rockefellers and the Rothschilds.

And let's not forget the Moral Majority, a compulsive user and critic of mass media, which saw the forces of evil everywhere, but masked its extremism by bemoaning the decline of the family and shouting incessantly about its right to free speech. Anti-abortion, anti-ERA and pro-tax cut hallelujahs were artfully inserted into Moral Majority news releases that read like compasssion-free sermons.

All this might be a topic of mere historical curiosity had these groups and others like them not basically succeeded, their ideas and agendas largely incorporated into the Reagan platform. Moral Majority Report did everything it could short of outright endorsement. "If turning back the clock means the restoration of some of the freedoms that Americans traditionally enjoyed," announced a typical writer, "I'm all for it." He was referring to the Republican platform.

Like Donald Trump, the Rev. Jerry Falwell and his Christian fundamentalist movement had an intense love/hate relationship with the media. After all, it had all begun on TV with Falwell's Old Time Gospel Hour. By 1980, the movement's tabloid paper was turning Falwell's radio and TV pronouncements into syndicated columns, while its reporters gloated about the growing attention. At the same time, however, they also despised the "immoral" television networks.

For these pioneers of political fundamentalism, the real "insiders" were purveyors of "smut" and degenerate lifestyles, a vast group that included most "non-Christian" media and members of the press. Their basic message, which read like a newsy catechism, was that the "moral" can clean up the media by exerting control over it. That meant boycotting specific outlets or supporting only Christian media.

Through insistent propaganda, the Moral Majority turned ignorance into strength and sexism into a virtue. Sound familiar?

Still, the electronic fundamentalism of Falwell's empire sounded almost moderate in contrast with the outright aryan arrogance of Christian Vanguard. "Specifically compiled for the Elect," this religious house organ was obsessed with one enemy, the Jews. This was a bullish racism, punctuated with articles like "Sadistic Jewish Slaughter of Animals." 

Pretending to intellectual rigor, one article attempted to prove that the enemy was plagued by a "devastating sense of inferiority." In another report, covering an Aryan Nations Movement conference, the publisher of a sister publication, Zion's Watchman, came out strong against humanism, marxism and "the seed of the serpent." Guess who he meant. 

Yet the Aryans remained hopeful, according to another contributor, because "the various right wing movements will come together, and unite as never before once we understand the importance of rallying under the Law of God, making what we call Germany's WWII 'Nazism' seem tiny in comparison." Scary stuff.

Like many movement publications of the era, Christian Vanguard had a clearinghouse for books, with listings under headings like "secret societies," "the money question," and "the Jewish world conspiracy." Another heading covered "self defense and survival," and included books on explosives, combat and surveillance. It was an early sign of the survivalism to come. Clearly, the "Elect" were prepping for action. Reading their paper also offered solid proof that Nazism was alive in Louisiana and other southern states in the Reagan era.

Decades later, many far right groups continue to believe in some sort of conspiracy aimed at destroying their "way of life." Specifically, they remain united by a fanatical fortress mentality and the belief that their rights as individuals are under attack. Before Reagan's election, the U.S. Labor Party, led by perennial presidential candidate Lyndon LaRouche, was already predicting that economic "disintegration" was just around the corner. Meanwhile, Christian Vanguard warned about "race mixing" and the Moral Majority emphasized a war on family values. Taken together, these threads provided a template for the Tea Party and Trump-ism.

Each of these groups had its own crusade and main enemy. Their modern equivalents are much the same. What most of them lack, however, is any vision of a better future. Instead, the paranoid right seems to draw its strength from alienation, using prejudices and frustrations as catalysts for unity.

Shortly before Reagan's election, this was exemplified in a pamphlet from Americans for Nuclear Energy, a so-called "citizens group." Their pitch, in the main text and a fundraising appeal, concentrated on the enemy. In this case, it was "coercive utopians," led by easy targets like Jane Fonda and Tom Hayden, a power couple exploited and demonized much like Bill and Hillary. Their goal, warned the group, is raw power "to control each of our lives." 

Each day, "the coercive utopians march closer to their repressive goals. The battle is for freedom in America." And what was freedom? In this version, abundant energy through nuclear power. Without it, America faced a "second stone age."

Obviously, that didn't happen. But if the paranoid style ever prevails, we could end up in a stone age whether we use nukes or not.

- August 12, 2016

Merger Madness and the Reagan Revolution's Big Fail

"Over the last 30 years there has been a transfer of trillions of dollars from the middle class to the top one-tenth of one percent." 

- Bernie Sanders on Twitter, Dec. 26, 2015

The conservative economics of the Reagan era deeply affected the lives of millions. What George H.W. Bush once called "voodoo economics" -- before he forgot and signed on as vice president -- became the biggest redistribution of wealth since the New Deal. As Bernie Sanders has pointed out, the gap between the rich and poor widened dramatically during those years, big corporations got bigger, and politicians backed away from social welfare programs.

The central article of faith at the time was that money rerouted to the rich would produce a burst of productivity and industrial growth. Give to corporations and the already wealthy, advised "supply side" economists, and "job creators" will invest the money in new factories, research, technology and jobs. The country will be restored to greatness.

We've been hearing this gospel for years. And we're hearing it again today from Reagan impersonator Donald Trump. But did it work the first time?

Even before Saint Ronald took office, he let corporate interests know they could have virtually whatever they wanted. Once in the White House, he immediately began to undermine or suspend government regulations of business, adamant in the belief that when business was given freedom and cash it would invest in new productive capability.

It didn't work out that way. The nation's biggest businesses did not put their money into jobs, research or equipment. Instead, they went on the largest merger binge in history, buying up smaller companies in a trend that meant less competition, less productivity, and more control of the economy by fewer people.

Multi-million dollar war chests were assembled to finance takeovers of large oil and coal companies, communication giants, and financial institutions. In just the first half of 1981, mergers involving $35.7 billion were arranged, a 60 percent rise over the previous year. Yet this was just a prelude to the largest merger in US history. On July 6, 1981, DuPont, the country's top-ranked chemical company, offered $6.8 billion to acquire Conoco, a major oil company that owned the second-largest US coal company, Consolidated.

DuPont was playing what merger watchers called the "white knight," so named because its offer was invited by Conoco's board to stave off yet another bid by Seagram, a Canadian corporation and the world's largest whiskey business. Within two weeks Mobil, then the second-ranked US oil company, weighed in with an "unfriendly" attempt to outbid both DuPont and Seagram. It hoped to gain Conoco's large oil and coal reserves, but was also testing Reagan's more lenient anti-trust policies by trying to buy a company in the same business.

The price reached $7.7 billion before DuPont won the bidding. By this time more than $16 billion in credit had been extended to the three competitors. Most of the money was still available afterward, plus another $20 billion in credit to other corporations either planning takeovers or trying to prevent them. Five major oil companies alone had $24 billion in credit lines; Texaco, Gulf, Marathon and Mobil were actively seeking mergers with "second tier" companies.

It wasn't a Left-wing think tank that labeled this phenomenon "merger madness." The name was coined by The Wall Street Journal. At first corporate leaders tried to sell it as simply a competitive necessity. But the truth is that the merger wars of the 1980s actually undermined the "economic recovery" so often touted by Republicans. In agreeing to let corporations run free, Reagan's administration brought on the rapid, public failure of supply-side economics.

There were warnings, of course. The Independent Bankers Association, for example, predicted that financial industry mergers would limit the availability of credit to agriculture, small business and individuals in thousands of small communities. The effect will be like a "giant vacuum cleaner" sucking up money, their spokesman predicted. 

Merger mania also slowed economic growth. Investments in production of new capital equipment, research and exploration took a back seat to acquisitions that strengthened a corporation's competitive position. The trend even fouled up the Federal Reserve's "tight money" policy. Both raiders and white knights were able to get credit through infusions from the European market. Even if the Reagan administration had wanted to halt the spree, little could have been done quickly, except maybe to impose limits on credit allocation. But far from fearing the madness, most Reaganites considered mergers perfectly acceptable.

"The Government of Business"

Two days after DuPont announced its historic merger, Reagan's assistant attorney general for anti-trust previewed the new administration philosophy -- by dropping two antitrust lawsuits. One of these charged that Mack Truck and its distributor had conspired to fix pricing discounts of Mack Truck parts. The Carter administration's antitrust division considered such vertical deals anti-competitive. The other case involved a government attempt to block the acquisition of the Northeast's leading outdoor brick seller by a British company. The issue here was market concentration: the merged business would command about 20 percent of brick sales in 13 states.

On this and other matters, the Reagan team did little to make its stand on mergers clear. It did, however, also decide to drop a long-standing anti-trust suit against American Telephone and Telegraph. Filed in 1974, the lawsuit claimed that AT&T had tried to obstruct potential competitors by refusing to let them hook into the Bell system. The proposed remedy was to break up the company. But the Reagan administration suggested that new FCC regulations would be an appropriate substitute. Top officials claimed they were more concerned about international competition from the Germans and Japanese than domestic monopoly practices.

Overseeing the merger boom, the administration was quiet and often encouraging. As Treasury Secretary Donald Regan put it, "Our economy is growing, our nation is growing, and the world is growing. So why shouldn't companies grow?"

Yet this wave of consolidation was only one in a series of attempts by major corporations and financial institutions to reshape the US economy. They started more than a century ago, but the initial public response was weak and half-hearted. Before some limitations were placed on the emerging monopolies, the Standard Oil Trust already included 40 companies representing 90 percent of the oil refineries and pipelines in the country. Trusts -- groups of corporations entrusting their stocks to small boards of directors -- also controlled the sugar, beef, whiskey and several other industries. 

A big slogan of that era was pure laissez-faire: "The government of business is not part of the business of government."

Nevertheless, a populist campaign to halt monopolization and protect the public interest gained steam in the 1880s. It grew out of resentment by small business over strong-arm corporate tactics, consumer complaints about price-fixing, and attacks by muckraking writers and alternative political parties. By 1888, both major parties were attacking the trusts, at least rhetorically.

When the Sherman Antitrust Act passed in 1890, only one dissenting vote was cast in Congress. The law declared illegal "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce." It authorized prosecutions and lawsuits for damages. But enforcement was far from aggressive at first and the number of trusts grew from 18 to 157 over the next decade. 

As president Theodore Roosevelt did attempt to put some teeth into the law; his Department of Justice pressed lawsuits calling for dissolution of the Standard Oil and American Tobacco Company trusts. Roosevelt also urged more indictments for anti-competitive practices. Merger activity boomed anyway. Two subsequent booms occurred in the 1920s and 1950s.

Antitrust enforcement was highly selective from the start. Take sugar refining, which the US Supreme Court defined as a "manufacturing monopoly" in 1895 and therefore exempt from regulation. A year earlier the same Court ruled that the Sherman Act could be used against striking workers because they were in restraint of trade. Eventually the Court decided that the law barred only "unreasonable" combinations.

Even when a firm was convicted for monopoly practices, an effective remedy was hard to devise. Roosevelt successfully prosecuted DuPont for monopolizing the explosives business, but the Court was at a loss to design a solution. The eventual decision was to set up two new powder companies. But DuPont shaped the plan and picked the executives for both new firms.

During the Carter years, the spotlight shifted to what were then called "shared monopolies," industries in which a few large companies shared control of the market. After identifying 50 such industries, the plan was to file a lawsuit against IBM on the basis of its "overtly predatory" practices. But that didn't go far, since Reagan's team saw federal regulations as the real problem and looked away as competitors gobbled one another at an accelerating pace.

Laffer's Folly

According to conservative legend, the basic outline for the "Reagan revolution" was originally sketched freehand on a napkin. The draftsman, UCLA economist Arthur Laffer, portrayed with a simple curve his idea that the health of the economy depends on the level of taxation. Laffer also argued that the US was taxing too high on the curve to keep business strong.

Armed with this specious doctrine, conservative "supply-siders" promised that tax reduction, combined with reduction of the "regulatory burden," would increase profit rates. And with this windfall corporate America would make new investments to decrease unemployment and increase productivity. More jobs and income would mean increased revenues for the government, even with lower tax rates. Increased productivity would mean more goods and, some day, lower prices. That was the gospel.

Meanwhile, antitrust "restrictions" were targeted as too "burdensome." Trust-busting kept companies from growing enough to compete against foreign rivals, the supply-siders warned. In fact, some consolidation should be encouraged. "Mergers are an important part of a healthy economic system," advised US Attorney General William French Smith, while economic theorist Robert Heilbroner declared antitriust laws "old-fashioned."

The bottom line: US corporations needed more money, supposedly to invest in new technology and development in order to stay competitive. But the theory was flawed; as it turns out, there is only the most tenuous connection between today's profits and tomorrow's investments. 

Looking back at the $100 billion that was passed around in ownership shuffles between 1975 and 1980, Harold Williams, former chairman of the Securities and Exchange Commission, noted that the same money "could have been devoted to new production and employment opportunities." But when used for mergers, it didn't "flow back as new capacity, improvements in productivity, innovation, new products or jobs."

Oil companies scouting for merger targets in the 1980s certainly didn't show much sensitivity to calls for expansion and investment in new technology. Others on the merger bandwagon were bidding up the prices of old facilities rather than investing in new ones. Even when bribed to make capital improvements with tax breaks, many corporations chose mergers as the shortest, easiest road to profit. 

During the Reagan era, income, wealth and control over economic life shifted dramatically into fewer hands. The trend toward economic consolidation seriously undermined the spirit of independent entrepreneurship that had once been the heart of the American economic system. Interest rates remained high as funds were drained for acquisitions. By 1983 the unemployment rate was over 10 percent, one more obvious sign that the supply-side gospel was a fraud.

Greg Guma is the author of The People's Republic: Vermont and the Sanders Revolution and other books, and former Executive Director of the Pacific Radio network.