Secret Armies and the Origins of the Cercle Complex Part III

Welcome to the long-delayed third installment in my examination of the origins of the shadowy transnational outfit variously known as Le Cercle, Pinay Cercle Violet Cercle, the Pesenti Group and a host of other titles over the years. I've already dealt with Le Cercle at length during a prior series, so I shall only provide the briefest outline here.

Le Cercle began as an offshoot of the infamous Bilderberg group in the 1952-1953 period. But unlike Bilderberg, which was dominated completely by the Anglo-American Establishment, Le Cercle grew out of rapprochements between German and French elites in the early postwar years. Pan-European and Atlantic oriented throughout the Cold War, Le Cercle was nonetheless dominated by particularly reactionary Catholic orders such as the Sovereign Military Order of Malta (SMOM) and Opus Dei throughout its early history. Various Western intelligence services had a strong presence from early on as well, particularly those from Germany and France. When the Anglo-American Establishment did make inroads beginning in the late 1960s, it was chiefly via "former" intelligence officers. In particular, veterans of the British Special Operations Executive (SOE) would come to dominate Le Cercle by the 1980s.

As the years wore on, the Cercle complex became increasingly disillusioned with the policies being pursued by the Bilderberg clique, especially that of detente. David Rockefeller and Henry Kissinger, some time Cercle affiliates, had formally broken with the group by 1980. By this time the Cercle complex was firmly committed to rollback, a much more militant approach towards the Soviet Union. To this end they became a crucial support network for the elections of Ronald Reagan and especially Margaret Thatcher.

the Iron Lady shares a laugh with Ronnie Raygun

As far as this series is concerned, I would like to explore the potential origins the Cercle complex has in what is commonly referred to as Operation Gladio. Gladio was only the name of the Italian component, however, as different names were used in other NATO or NATO-aligned countries featuring such networks (in Greece, "Red-Sheepskin" was used; in Turkey, "Counter-Guerrilla;" etc). In effect these networks consisted of secret armies that, in the event of a Soviet invasion, would be activated to form a resistance against the invaders.

That was the theory, at least. In actuality, ample evidence has emerged over the years that these networks were frequently employed in acts of terrorism to ensure submission to the United States (this topic was dealt with in regards to Italy here, and with Belgium here).

As was noted in part one of this series, the Gladio networks were largely based upon similar networks established by the above-mentioned SOE, the American Office of Strategic Services (OSS), and Amt VI-S of Nazi Germany's Reich Main Security Office (RHSA) during the Second World War. With the second installment, I considered how the assets of the Amt VI (the Ausland-SD, effectively Nazi Germany's CIA) were transferred to a Spanish-German conglomerate known as SOFINDUS during the final years of the war and were used to establish what are commonly referred to as the "Ratlines." Elements of the Amt VI-S, including its head, Otto Skorzeny, ended up working for SOFINDUS after the war. Meanwhile, SOFINDUS itself had been taken over by a curious entity.

the Origins of the WCC

The World Commerce Corporation (WCC) is one of the most enigmatic entities to emerge in the immediate aftermath of the Second World War. It is closely linked to William "Wild Bill" Donovan, the legendary founder and director of the Office of Strategic Services (OSS), the WWII-era predecessor to the CIA. The great Peter Dale Scott described it as thus:

"... An early transnational commercial intelligence firm formed in 1946 by Donovan's wartime British counterpart, Sir William Stephenson, with a number of old OSS and British Special Operations Executive hands. According to Stephenson's longtime friend and biographer, William Stevenson, the firm was 'designed to continue Anglo-American intelligence cooperation.' Donovan's law firm handled legal business for WCC from the onset, and Donovan became a director in 1947. The firm was backed by an impressive list of capitalists from the British, American, and Canadian overworld, including Nelson Rockefeller, John J. McCloy, Russell Forgan, Lester Armour, Sydney Weinberg (of Goldman Sachs), Richard Mellon, Rex Benson, and Sir Victor Sassoon."

(American War Machine, Peter Dale Scott, pg. 55)

Nelson Rockefeller also had links to the Cercle complex and even allowed the group to use his New York residence to conduct there US meetings at

The WCC had its origins in a company known as the British-American-Canadian Corporation (BACC). The chief figure behind the BACC in turn appears to be the above-mentioned William Stephenson, the legendary British-Canadian spymaster. During the Second World War, Stephenson headed the New York-based British Security Coordination (BSC). The BSC (whose NYC headquarters were housed at Rockefeller Center) in turn played a crucial role in helping establish the OSS. Reportedly it was Stephenson who recommended his close friend William "Wild Bill" Donovan to FDR as a potential head of American intelligence efforts. Stephenson also worked closely with the SOE during the war.

William Stephenson

The SOE itself was shuttered in early 1946 and the formation of the BACC shortly beforehand may have been designed to preserve the assets of the SOE.

"Suddenly, in May 1945, Stephenson and a small cir of associates moved on the formation of a highly enigmatic private corporation called British-American-Canadian-Corporation, S.A. (BACC). The New York-based company was formed with a Panamanian registry. It operated in New York in the same building that served as the headquarters for Stephenson's BSC. Nearly all of its corporate officers and almost all of its rank-and-file were former intelligence officers. Two of Stephenson's top partners in the corporation were senior-level British intelligence officer Sir Charles Hambro and Colonel Rex L. Benson. In civilian life Benson was merchant banker and put up most of the money for the new corporation. Hambro was also a powerful merchant banker and highly decorated World War I Veteran. At the beginning of World War II, he joined the Ministry of Economic Warfare to oversee several departments of the SOE including the French, Belgian, German and Dutch sections, also for five months beginning in November 1941, he was SOE deputy. He was involved in the earliest coordination with William Donovan over the start-up of an American organization for covert action."

(The Skorzeny Papers, Ralph P. Ganis, pg. 21)

The presence of Sir Charles Hambro in the BACC is most significant for our purposes here. At least two crucial Cercle figures and SOE veterans had links to either Hambros or his bank. Sir Peter Tennant, a future Cercle chairman, was one of the earliest members of the SOE, having been personally recruited by Hambro himself. And then there was Henry Sporborg, a Deputy Head of the Special Operations Executive who went to work for Hambros Bank in the postwar years. But back to the matter at hand.

The WCC was actually founded in 1945 by an OSS officer known as Frank Ryan. Ryan had also provided a lot of capital for the foundation of the BACC, linking the two corporations from early on. It was not until 1947, however, that they were formally merged.

Illicit Funding

But in addition to the funds provided by American, British and Canadian capitalists, there were rumblings that capital for these two entities was also provided by other sources. The great Peter Dale Scott noted that "Nazi money, laundered by Allen Dulles and Sir William Stephenson through the WCC" (American War Machine, pg. 71), was also available. This charge is most plausible. In The Skorzeny Papers, Ralph P. Ganis compellingly argues that that both the BACC and the WCC were involved in Operation Safehaven, a joint US-UK project launched in 1944 to recover hidden Nazi assets. And as was noted in the prior installment, SOFINDUS had been the recipient of billions of dollars worth of Nazi gold during the final years of the war. According to Ganis, the SOFINDUS network was rolled into the BACC-WCC sometime around 1946-1947. As such, it is highly probable that the WCC had access to recovered Nazi gold.

It is also likely that the WCC and its operations would later be financed in part by drug money as well. In the aftermath of the Chinese Revolution, Wild Bill Donovan would become a crucial backer of the disposed Kuomintang (KMT) regime. These Nationalist Chinese would go on to take possession of Formosa, becoming the ruling political party there for decades and effectively turning it into an Apartheid country in the process. Hence, Formosa is now known as Taiwan.

the emblem of the KMT

Even before the Chinese Revolution, the KMT enjoyed enormous influence in the United States. Its supporters were dubbed the China Lobby and this network wielded the same kind of power in American politics throughout much of the Cold War that the similar (and closely aligned) Israeli Lobby now enjoys. In the case of the KMT, much of this influence was bought and paid for with drug money. Much more information on this topic can be found here.

In the immediate aftermath of the KMT's defeat on mainland China, the WCC came to its aide via a subsidiary known as the Commerce International China (CIC).

"...In addition, the WCC (along with sponsors in the U.S. overworld) develop links to the KMT in this period. Thus, in early 1950 a Panama-based company, Commerce International (China), or CI(C), was supplying military arms and training to Chang Kai-shek on Taiwan in a period when Secretary of State Acheson was not yet permitting official US support. Bruce Cumings suspects that CI (C) 'may well have been a CIA proprietary company'...."

(American War Machine, Peter Dale Scott, pg. 55)

The vice-president of the CIC at the time was an individual known as Satiris Fassoulis. Previously Fassoulis had been a pilot for General Claire Chennault during the war. Chennault was a key figure in the China Lobby and the founder of Civil Air Transport (CAT). CAT would later become the infamous Air America.

When relations between Taiwan and the United States were normalized, the CIC would once again be enlisted. The impetus for this alliance came from a "fact finding" mission launched in 1949 that formalized military relations between the two nations.

"The plan to save Taiwan advanced on 7 November 1949, when privateer William S. Pawley received permission from Secretary of State Dean Acheson to lead a group of retired military officers, headed by Admiral Charles Cooke, to Taiwan to advise the KMT on security affairs. No stranger to political intrigues or the underworld, Pawley own sugar plantations, an airline and a bus system in Cuba, and was linked to Mafia leaders who had investments there too. He was well connected to the espionage Establishment as well: Bill Donovan met with Chiang Kai-shek's defense minister and secret police chief to grease the skids on Pawley's behalf, and William Bullitt in December began raising funds for the so-called Pawley-Cooke Advisory Mission – the lion's share of which was provided by a group of Texas oilman led by right-wing fanatic H. L. Hunt, a onetime professional gambler who, in his younger days, help finance his empire by running a private racing wire."

(The Strength of the Wolf, Douglas Valentine, pg. 78)

William D. Pawley and Admiral Charles Cooke would go on to become luminaries in the American Security Council (ASC), for years the black heart of the defense establishment in the United States. Nominally a think tank and a lobby group, the ASC was also a full blown private intelligence network. Its membership included numerous "former" high ranking military and intelligence officers. Much more in the ASC can be found here. The Texas oil magnet H.L. Hunt was a crucial figure in funding the modern conservative movement. He is also believed to have been a key figure in the Kennedy assassination, as was noted before here.

Pawley (top) and Admiral Cooke (bottom)

As such, the Pawley-Cooke expedition was a crucial alliance between the American national security establishment and the far right. This alliance would later have profound implication for these United States, as was noted before here and here.

There is also much evidence that the Pawley-Cooke expedition would play a crucial role in facilitating the import of KMT opium in the United States. Douglas Valentine would go on to note:

"... the Pawley-Cooke mission in Taiwan, which was funded by ultra Texas oilman like H. L. Hunt, in which, and which, in 1951, was facilitating the CIA-Kuomintang drug smuggling operation that entered the US by crossing the Mexican border at Laredo, Texas?

"There was certainly enough evidence for the Kefauver Committee to take a long look at the Lone Star State. In 1951, Lait and Mortimer had identified Hunt as a professional gambler who ran a private racing wire, which suggests Mafia ties. They had also claimed that the Mafia had 'taken over the age-old racket of running guns across the border,' under the aegis of Carlos Marcello."

(The Strength of the Wolf, Douglas Valentine, pg. 309)

H.L. Hunt

As far as the WCC is concerned, not only did Donovan himself personally intervene on behalf of the Pawley-Cooke mission, but the CIC (a subsidiary of the WCC) provided the mission with everything from gas masks to airplanes.

But in addition to providing military support to the KMT and helping bring the Nationalist Chinese into US Cold War strategy, the WCC also helped them procure a new supply of opium in the aftermath of the Chinese Revolution. Donovan himself was also deeply involved in these efforts, which began even before the end of the Chinese war.

"...With only token support from the Truman administration, the Nationalists' war with the Communist was faltering, and in Thailand a war had erupted between the police and army over the opium trade. Then a registered foreign agent of the Thai government, former OSS chief William Donovan traveled to Bangkok to unite the squabbling factions in a strategic alliance against the Communist. The Nationalist Chinese who served as middlemen in the production and transportation of narcotics from Thailand to Hong Kong, Macao, and other Asian markets, benefited greatly from Donovan's intervention."

(The Strength of the Wolf, Douglas Valentine, pg. 70)

Wild Bill

This intervention became crucial for the survival of the KMT in the aftermath of being completely driven from the Chinese mainland.

"...by 1956, the KMT had been driven from the Chinese mainland and that Chinese production of opium, even in remote mountainous Yunnan, had been virtually eliminated. The disruptions of a world war and revolution had created an opportunity to terminate the opium problem in the Far East. Instead, U.S. covert support for the Thai and KMT drug traffickers converted Southeast Asia, for more than two decades, into the world's major source of opium and heroin.

"The origins of the U.S. interface with these drug traffickers in Thailand and Burma are obscure. They appear, however, to have involved principally four men: William Donovan; his British ally Sir William Stephenson, the organizer with Donovan of the World Commerce Corporation (WCC); Paul Helliwell; and Willis Bird (both veterans of OSS China). After World War II, Sir William Stephenson's WCC 'became very active in Bangkok,' and Stephenson himself established a strong personal relationship with King Rama IX.

"Stephenson recruited James Thompson, the last OSS commander in Bangkok, to stay on in Bangkok as the local WCC representative. This led to the WCC's financing of Thompson's Thai Silk Company, a successful commercial enterprise that also covered Thompson's repeated trips to the northeastern Thai border with Laos, the so-called Isan, where communist insurrection was most feared and where future CIA operations would be concentrated..."

(American War Machine, Peter Dale Scott, pgs. 70-71)

James Thompson

Donovan himself would continue to maintain a strong presence in this region of the world well until the 1950s. In 1953, he appointed US ambassador to Thailand, where he appears to have continued to keep a watchful eye over the opium trade there.

Wetworks

It does not appear that Asia was the only region of the world where Donovan would collaborate with organized crime in anti-Communist activities either. By the late 1940s, the newly founded CIA had become deeply concerned over growing Communist influence in Italy. Specifically, there was an overriding fear that the Italian Communist party would come to power. By now it is well known that CIA provided considerable funds to influence Italian elections in 1948 to prevent this possibility, but there is evidence that even more extreme measures were resorted too.

"One covert and commercial use to which international drug traffickers were put was as a tool in the suppression of communists and labor organizers. In May 1947, for example, Mafioso Salvatore Giuliano and his gang killed eight people and wounded thirty-three in a Sicilian village that had voted for the Communist Party's candidates in elections held four days before. Frank Coppola, from his base in nearby Partinico, reportedly provided Giuliano with the bombs and guns, and was himself 'allegedly financed by former OSS chief William Donovan.'

" 'Coppola was the controller behind the scenes, the maker of Sicilian and Roman deputies,' author Gaia Servadio says in Mafioso, and 'the deus ex machina of the Salvatore Giuliano saga.'

"By 1948, the CIA was so influential in Italy that the leader of its Communist Party, Palmiro Togliatti, charged the US with subverting Italy's national elections. He also charged that reporter Michael Stern (who glorified Giuliano in a series of articles for Time Magazine in 1947) was a spy for William Donovan and China lobby Senator Carl Mundt..."

(The Strength of the Wolf, Douglas Valentine, pg. 76)

Frank Coppola

Earlier, Valentine had indicated that Donovan's work in Italy during the late 1940s was also linked to the WCC, a good possibility given that he had no other known intelligence connections at the time. And while this is all highly speculative, there can be little question that Donovan had had dealings with the Mafia going back to the time of Operation Underworld.

Now, let us step back for a moment. Clearly with its ties to SOFINDUS (and by default, Nazi gold) and the Southeast Asian opium trade, the WCC was clearly well capitalized by the early 1950s via a host of off-the-book sources. This provided a vast, clandestine source of funding for a host of equally clandestine operations. If Donovan's involvement with Coppola in Italy during the late 1940s is any indication, these operations likely included "wetworks."

This is what makes Otto Skorzeny's alliance with the WCC network during the early 1950s even more ominous. While this was no doubt partly related to Skorzeny's access to Nazi gold, there's no question that Skorzeny also had quite the stable of hardened killers at his disposal as well. Combine this with all the covert operations veterans from the OSS and SOE who ended up working with the WCC, and one is left with the specter of a well-funded, corporate version of Murder, Inc.

Otto "Scarface" Skorzeny

This is especially ominous in light of where Donovan was linked to political terror: Italy. Italy was of course one of the first European nations where a stay-behind network was erected. In Puppetmasters, the great Philip Willan alleges that this network was created immediately following the conclusion of the Second World War, well before NATO was established. The fashion and structure of this network shall be noted briefly in the next installment to illustrate the different levels of what is commonly referred to as Gladio in Italy. Hint: There appears to have been more than one Gladio network.

Another European nation that was an early recipient of this largess was France. In addition to a formal stay-behind network, there appears to have been a even more militantly pro-US secret army set up there in the years following the war. And recent evidence suggests that Donovan played a crucial role in these endeavors as well.

"The exact name of the covert group established by General Donovan authorized by U.S. authorities in 1947 is not known. The author has therefore created a name and special acronym unique to this book for ease of presentation and understanding. Henceforth, the author shall use 'Secret Paramilitary Group' or 'SPG' when discussing the hidden covert organization Donovan formed within the World Commerce Corporation. 

"The new anti-Communist operations of which the SPG would eventually be involved went under the code name Rose des Vents (Compass Rose)..."

(The Skorzeny Papers, Ralph P. Ganis, pg. 69)

The possibility of such a network will be explored in much further in the next installment, along with the postwar intrigues that rocked France during the late 1940s. It is likely these events set the stage of the rise of Cercle complex by 1953. And with that I shall sign off for now. Stay tuned dear readers until the next episode.