posted on Nov. 11, 2003
Clark M. Clifford
Clark M. Clifford

Clifford was Secretary of Defense in the Johnson Administration from 1968 to 1969.

Clark Clifford has been called the consummate Washington insider [1]. An advisor to presidents Truman, Kennedy, and Johnson [2], Clifford was also consulted by Carter.

As Secretary of Defense, he served under Lyndon Johnson, from 1968 to 69, after Robert McNamara left office.

Clifford was Assistant to White House Naval Aide, 1945-46 and Special Counsel to the President, under Truman in 1946-50.[3]

In 1975 he testified before the Church Committee, speaking from first-hand knowledge about the authorization of covert CIA activities in 1947.[4]

On the topic of covert activities he had this to say to the Committee:

However, as the cold war continued and Communist aggression became the major problem of the day, our Government felt that it was necessary to increase our country's responsibilities in protecting freedom in various parts of the world. Its seems apparent now that we also greatly increased covert activities. I have read somewhere that as time progressed we had literally thousands of such operations going on simultaneously.

It seems clear that these operations have [now] gotten out of hand.[5]

Perhaps the most interesting thing about Clifford is the fact that although he is thought of primarily as an assistant to Democratic presidents, he was an insider in the group that created the Cold War - which included Forrestal and Lovett, before they became Secretaries of Defense. The special position that he held in this group turns out to have been the prototype for the job that would come to be known as 'National Security Advisor'. In an oral interview he speaks of those early days in the Truman Administration:

I was appointed Special Counsel. So, at the end of May, I got out of the Navy and became a civilian and became a Special Counsel to the President on June 1, 1946.

Then I had been busy before, but then I really got busy on all of the activities that the Special Counsel performs: speechwriting, messages to Congress, and veto messages. There was a lot of writing connected with the job. At the same time, the operation was still so new you could move into areas of your greatest interest. And I believe my greatest interest, even at that early stage, was in the field of national security and foreign policy.

And so, I began to develop a very close relationship with Forrestal who was at Navy, with Judge [Robert Porter] Patterson, who was then Secretary of War, as it was called then. I think maybe Dean Acheson was at State at the time in the Under Secretaryship, or Assistant Secretaryship of State. And I know later on I developed a very close relationship with Bob [Robert A.] Lovett, who was [George C.] Marshall's Under Secretary of State. And gradually there began to develop contact between me and State and War and Navy, and we began working informally with the President's knowledge and consent. That role was something of the forerunner of a National Security Assistant that was later institutionalized under President [John F.] Kennedy in the person of McGeorge Bundy, and then later under President [Lyndon B.] Johnson in the person of Walt Rostow, and under President [Richard M.] Nixon in the person of Henry Kissinger, although, it was not nearly so big a job. But I think it was possibly the genesis. Somebody is needed on the White House staff who serves as liaison with those departments. It was the area of my main interest, and I think grew up gradually and naturally. So, I was giving quite a lot of time to those subjects at that time.

And possibly, to some extent, that accounts for the assignment which President Truman gave to me in the spring of '46, to prepare that interesting memorandum which you and I discussed earlier, that had the title, "The Relationship Between the United States and the Soviet Union." [7]

About the memorandum preparation process:

That was the occasion when I talked with different individuals that we have mentioned. And with Elsey's help, we obtained a great mass of material, distilled it, synthesized it, and wrote the report. I might say, that as I began to get into these areas, I found that the enormous, attractive, and almost magnetic force that was pulling me on was in the area of national security and foreign policy. I obviously dealt some with domestic policy, but I found out after a while that foreign policy became my major interest. This happened in a rather interesting way.

When I had been in the Naval Aide's office, I developed a relationship with Jim Forrestal, who was then Secretary of Navy. I began to get involved in military matters. When he became Secretary of Defense, I was very much involved with him. I gradually grew into the position of liaison between White House and first the War Department and Navy Department and then the Defense Department.

These matters developed through my personal relationships, and the same development took place in the field of foreign policy. When I came in there, Dean Acheson was Under Secretary of State. I had met him here in Washington and we had developed an excellent relationship. When Jimmy Byrnes went out at State, and Dean Acheson went out, General George Marshall came in. I did not have much of a relationship with him, but the Under Secretary of State then was Robert Lovett and he and I were already friends. So that gradually during the time I was there, the Special Counsel's office became the liaison with the State Department, and with the Defense Department. That helped contribute to my interest in national security affairs and foreign policy affairs.

The 1948 memo regarding loyalty investigations that George Elsey sent to Clifford is at: [6]

In his final years, Clifford is embroiled in scandal and faces charges of fraud:

With a gentle drawl and an insider's run of the halls of power, Clifford was consulted as well by Presidents John F. Kennedy and Jimmy Carter, bridging the nation's postwar political era until he ran into legal troubles in high-finance brokering.

For all the roles he played in presidential history, Clifford faced a rigorous ordeal in his final years, insisting on his innocence to the end as he faced charges of fraud, conspiracy and taking bribes in the biggest banking scandal in history, the collapse of the Bank of Credit and Commerce International [BCCI].

BCCI It was only earlier this year [1998] that Clifford and his law partner, Robert A. Altman, reached a $5 million settlement with the Federal Reserve Board, after federal prosecutors had whittled down the case against them. Altman had been acquitted in 1993 in New York state court of charges of bank fraud; indictments against Clifford had been set aside because of his failing health.

"Clifford liked to think of himself as a bridge between business and government." [8]

[The following was added in 2006:] From an article in the Nation [8/31/93] by Murray Waas, entitled "Clifford's Partner Warned BCCI":

A senior official of the Bank of Credit and Commerce (BCCI) told an undercover federal agent in 1988 that Robert Altman, the Washington law partner of Clark Clifford, had told the banker he should leave the country to evade a Senate subpoena, according to federal law enforcement documents obtained by the VOICE. A subcommittee of the Senate Foreign Relations Committee had been investigating links between BCCI and Panamanian dictator Manuel Noriega.

During that period of time, Altman and Clifford were representing BCCI in their roles as attorneys ... Altman and Clifford were also president and chairman, respectively, of the First American bank, which federal regulators now charge was secretly owned by BCCI...

Largely on the word of Clifford, the Federal Reserve Board allowed a group of investors - who were actually front men for the BCCI - to purchase First American. Clifford told the Federal Reserve Board in 1981 that BCCI was to have no role whatsoever in the ownership of the bank.

Since the revelations of BCCI's secret control of the bank appeared in the press, both Clifford and Warnke have portrayed themselves as victims of BCCI, claiming they were misled by Arab investors who assured the two Americans that they were putting up their own funds inteas of fronting for BCCI.

... In 1968, investigators for the U.S. Customs Service had begun an undercover sting investigation, code-named 'Operation Sea Chase,' to follow the money laundering of Colombian cocaine cartel funds through BCCI.

As part of that investigation, U.S. Customs agent Robert Mazur pretended to be a money launderer and worked with Colombian drug traffickers. In that guise, Mazur met several times with Amjad Awan, then chief of BCCI's Latin American division, who agreed to assist Mazur with his money laundering needs. Awan also happened to be dictator Manuel Noriega's personal banker, laundering millions of dollars through BCCI's branches around the world for the Panamanian strongman.

The BCCI scandal was described in a VILLAGE VOICE article ('BCCI: It's Showtime - the Bank of Crooks and Criminals Trial Opens in New York, March 16, 1993):

Facing serious jail time for his role in the BCCI affair - in which depositors were swindled out of almost $10 billion by the Bank of Credit and Commerce International, ... - [petro-millionaire Sheik Kamal 'The Turk'] Adham agreed to plead guilty to one New York banking violation, a misdemeanor. He also promised to pay the largest reparation ever for a misdemeanor - $105 million.

... Forty hours later, [District Attorney] Morgenthau and the U.S. Justice Department in Washington announced indictments of Clifford and Altman. ...Clifford and Altman are accused of illegally greasing the regulatory wheels for their unsavory client. A bank with blood on its legers, the BCCI home office not only bilked millions of customers, but developed mechanisms to move cash for drug and weapons deals (including nuclear arms). Headed by the brilliant (if evil) Pakistani Agha Hassan Abedi and financed by Middle East oil money, the bank had a globally consistent strategy - get close to heavy political hitters. President Carter's former budget director Bert Lance introduced Abedi to Clifford, who also served as a roving ambassador. Clifford and Altman soon became BCCI's principal American attorneys.

Prosecutors say the duo lied to U.S. banking regulators so that BCCI could secretly acquire the First American Bank, with its $11 billion in assets and subsidiaries in six states.

... How and why did the Manhattan D.A. [Morgenthau] become the center of the BCCI universe, a million, a multi-continent network of criminals with potent Washington contacts? Morganthau, in effect, was handed a scandal no one else wanted to touch. It came from Jack Blum, a Senate investigator who was one fo the first to find evidence of BCCI lawlessness. During Senate hearings about Panama president Manuel Noriega's drug running, Blum kept hearing the name BCCI mentioned. He met with some of the bank's officers and began compiling a dossier. Blum suspected a fix was in when George Bush's Justice Department yawned in 1989 after he brought damning evidence about BCCI.

"I laid out the bank's insolvency and its secret and illegal penetration of the American banking system to the FBI and several U.S. attorneys," Blum told the VOICE. "I waited for the call, but the call never came." Blum then studied a roster of First American Bank branched. He was pleased to spot Manhattan addresses, because he had met Morgenthau a few months earlier. "I needed to speak with someone with a reputation for integrity, someone who could claim jurisdiction, someone with the balls to get to the bottom of this mess.:

... BCCI was the world's only totally offshore bank, operating without a central regulator and issuing false reports when authorities came around. A brilliant criminal enterprise, it was a bank that robbed other banks.

...Morgenthau's staff admits that at most we've learned only half of the scandal's details. A dispirited Jack Blum moans, "The cover-up is so deep that we'll never get to the bottom." .... As it is, Morgenthau hasn't heard BCCI mentioned by the White House's new occupants.

A reason for this silence might be because one of Clinton's major financial supporters, Jackson Stephens of Little Rock, helped bring BCCI into America in the late 1970s. Stephens, who runs one of the nation's largest borkerage houses, managed the public offerings in which BCCI took control of the National Bank of Georgia. Stephens also worked with Bert Lance in an unsuccessful attempt by BCCI to buy an American banking chain. Stephens, among others, was sued by the Securities and Exchange Commission for the latter effort. Hillary Rodham Clinton did legal work for a Stephens subsidiary also named in the 1978 SEC complaint.

A recent (October 23, 2006) article on COUNTERPUNCH characterizes James Baker as "Bush's Clark Clifford": [9]

Like Henry Kissinger, Baker is played up in the mainstream media as a wise man, whose voice of reason is always welcome. Of course, reason and wisdom, like beauty, is often in the eye of the beholder.

Clark Clifford was also such a man. Never far from the men who made the decisions during his adult life and always available for advice on how to keep the empire intact, Mr. Clifford was called into service as an advisor to Lyndon Baines Johnson (LBJ) in spring of 1968, not long after the humiliating political defeat of US desires in Vietnam during Tet 1968. Rather coincidentally, it seems, the events of Tet 1968 have been brought up recently by none other than George Bush himself in regards to the war in Iraq....

...In the spring of 1968, LBJ met with generals, advisors other than Clifford, and Clifford himself. The topic was what to do about Vietnam? There were those at the table who were convinced that another large increase in US troop numbers and bombing raids could win the war. ... It was this group who wanted a total victory and believed such an oucome was still possible, the US public be damned.

Clark Clifford represented the other group of advisors. This group still believed in the rightness of the US mission in Vietnam, but felt that the cost to the United States was too high to increase the military assault. ... The answer to this situation from those advisors represented by Clifford was to change tactics.

  - from "Bush's Clark Clifford: James Baker Wants a Kinder, Gentler War"

James Baker resembles Clark Clifford in yet another way: both were involved in large financial scandals. From a 1992 article linking George W. Bush to Saudi money [10]:

Feds Investigate Entrepreneur Allegedly Tied To Saudis
The Houston Chronicle A; Pg. 21
June 4, 1992, Thursday, 2 STAR Edition

Federal authorities are investigating the activities of a Houston businessman -- a past investor in companies controlled by a son of President Bush [George W. Bush] -- who has been accused of illegally representing Saudi interests in the United States.

Excerpt from a 1997 article identifying James Baker as having financial interests in Central Asian oil:

Caspian Oil Draws Crowd Of Ex-Washington Heavyweights
David B. Ottaway, Dan Morgan
Austin American-Statesman; Insight; Pg. J6
July 13, 1997

The last great oil rush of the 20th century -- targeted at a potential $4 trillion patch in Central Asia's Caspian Sea region -- has lured a prestigious group of U.S. prospectors: former high-ranking government officials bent on winning a stake in the bonanza for themselves or their companies.

These men are working together for policy changes that they say are needed to put U.S. companies on an equal footing with foreign competitors in Azerbaijan, a small nation that is at the center of a vast untapped oil basin.

Involved in the effort are two former national security advisers, Brent Scowcroft and Zbigniew Brzezinski; former White House chief of staff John Sununu; Defense Secretary Richard Cheney and Secretary of State James Baker from the Bush administration; and Lloyd Bentsen, a former Texas senator who also served as treasury secretary under President Clinton.

On terrorist banks, money-laundering, and how "The Bushs and Bin Ladens Share [The] Same Financial Networks" see: [11]

In "James Baker's Double Life," Naomi Klein discusses "Baker's extensive business dealings in the Middle East," his involvement with the Carlyle Group, "where Baker is senior counselor and an equity partner with an estimated $180 million stake," and the role that he played in what has been described as "one of the greatest cons of all time": [12]

According to Kathleen Clark, a law professor at Washington University and a leading expert on government ethics and regulations, this means that Baker is in a "classic conflict of interest. Baker is on two sides of this transaction: He is supposed to be representing the interests of the United States, but he is also a senior counselor at Carlyle, and Carlyle wants to get paid to help Kuwait recover its debts from Iraq." After examining the documents, Clark called them "extraordinary." She said, "Carlyle and the other companies are exploiting Baker's current position to try to land a deal with Kuwait that would undermine the interests of the US government."

"There's a lot that Americans haven't been told about George Bush and the savings-and-loan catastrophe--mainly that Bush's friends, his son Neil, and their social circle caused a major portion of the damage, and that the president, by his continued loyalty to these people, bears some responsibility himself," reports a Village Voice article ("The Real S&L Scandal: How Bush's Pals Broke the Banks," by Jonathan Kwitny, October 20, 1992, pp. 24 ff).

"Hundreds of U.S. Savings and Loans failed during the 1980s, costing U.S. taxpayers an estimated $500 billion" - find out more about the involvement of the Bush family, and Baker, a close friend of George HW Bush: [13]

NEIL BUSH. In 1990, federal regulators filed a $200-million lawsuit against Neil Bush and other officers of the Silverado Banking, accusing them of "gross negligence" contributing to its $1 billion collapse. "Our conclusion is that Silverado was the victim of sophisticated schemes and abuses by insiders and of gross negligence by its directors and outside professionals," FDIC Senior Deputy General Counsel Douglas H. Jones said in a statement. More

GEORGE W. BUSH. In 1992, US News and World Report concluded that in one important respect, "George W. Bush has less in common with his father than with his younger brother Neil," having "also benefited from some questionable but less well-known business associations." More

JEB BUSH. In 1987, Miguel Recarey, a longstanding business associate of Tampa Mafia boss Santos Trafficante, fled the U.S. under three indictments for labor racketeering, illegal wiretapping, and Medicare fraud. ...

...Jeb Bush came to the rescue... More

PRESCOTT BUSH. In 1989, when Japanese organized crime elements were seeking to extend their financial interests into the U.S., Prescott Bush arranged investments by a Japanese Mob front company in two U.S. businesses and a large piece of U.S. land. More

An article in the Village Voice ("Neil Bush: Yuppie Scum" - July 7, 1992) begins like this:
When most people think of the savings and loan scandal, they think of Neil Bush, who, more than any other individual, epitomizes Hunter S. Thompson's characterization of the children of the 1980s as the "Generation of Swine."

Neil's self-righteous televised defense of the outrageous business practices at defunct Siverado Banking, Savings and Loan - which failed at a cost to taxpayers of up to $3 billion, including interest - elevated Neil, who was really only a bit player in the $1 trillion S&L debacle, to the ranks of the rich and infamous...

Confronted with a mountain of evidence showing mammoth conflict of interest in his own personal business dealings as a director of Silverado, Neil pouted, stormed, and denied any wrongdoing. Buried in an avalanche of paperwork showing that Silverado insiders and their friends had conducted a seminar in how to loot an S&L while federal regulators - who worked for Neil's dad's boss, Ronald Reagan - looked the other way, Neil arrogantly described the billions of dollars in taxpayer losses incurred at Silverado as 'inconsequential'. ...

Silverado was part of a daisy chain of fraud riddled S&Ls that had business links to organized crime figures and CIA operatives. After all, George [HW Bush]'s own father had made a business out of dealing with the Nazis, and George himself has a personal affinity for dictators, spooks, and speculators.

Another article - "Party Favors: for Jeb Bush, Politics and Business are Inseparable" by Curtis Lang (Village Voice, Aug 23, 1992) begins like this:
When, on a fishing trip to Maine, Jeb Bush accidentally hooked his father, President George Bush, in the right earlobe like a common trout, diligent Bush-watchers detected a defining moment in the checkered Bush family history, which features three generations of scandals involving spooks, speculators, and con men - and nearly $3 billion in taxpayer bailouts for the Bush family and associates. (See the VOICE, May 19, chart detailing more than $2.72 billion in taxpayer bailouts to the Bush family.)

... Jeb's faux pas epitomized his relationship with his father, whom he has unintentionally embroiled in a series of embarrassing miniscandals over the years. Jeb's business and political associates in Miami have included a Cuban exile spook, a convicted Colombian con man, a big-time drug smuggler, and a fugitive from justice charged with perpetrating the largest Medicare fraud in American history. Jeb personally intervened with federal authorities on behalf of at least one of these characters. In other episodes, Jeb managed to profit from a nonperforming load at a failed S&L - at taxpayer expense - and managed to create a potentially damaging paper trail linking his father to Iran-contra kingpin Oliver North...

... Recurring business scandals involving Bush's three sons, George Jr., Neil, and Jeb, paint a picture of rampant abuse of power and privilege at the expense of the American taxpayer.

In an extensive investigative article called 'All the President's Friends' by Jonathan Kwitny (based on the reporting of Pete Brewton), the following question is asked/answered: "Who benefitted from the S&L Ripoff? Would you believe George Bush's houston pals, his campaign manager, his comptroller of currency, and his landlord, not to mention the Republican Party, the Mafia, and the CIA? You should".

In a diagram (labeled 'The Real Trickle-Down Theory') that accompanies the article, the relationships between Bush and those who benefitted is mapped out. Jim Baker, his Chief of Staff at the time, appears next to Bush at the top of the chart, along with Fred Malek (campaign manager), and followed by various individuals who profited in the scandal, including Neil Bush (son), George W. Bush (son), Larry Mizel (Neil's homebuilder), Bill Walters (Neil's uncle), Richard Rossmiller, Herman Beebe, Joe Russo (Bush's Houston landlord), Jon Lindsay, Robert Clarke, Trine Stairns (who reportedly walked away with $500 million), Roberton Corson, Raymond Hill, Carlos Marcello, Jim Bath, John Riddle, and Mike Adkinson.

Something else intrigues Brewton about the story: the frequent interplay between the developing cast of S&L characters who were friends with Bush, and the CIA, which Bush once headed.

... What had become clear to Brewton is that a group of privileged insiders had looted the U.S. Treasury of many billions of dollars and that these people were George Bush's friends, or their friends.

Of the five biggest S&L defaulters ($200 million each) four have connections to George Bush's longtime friend Walter Misher (also a friend of Chief of Staff Jim Baker), or to Neil Bush's friend and mentor, Bill Walters.

...Trine Starnes could turn out to be the S&L champ, defrauding six institutions of as much as $500 million. Over $77 million of that was borrowed from Neil Bush's Silverado. But the Bush connections do not stop there. It was Walter Misher, a friend of George [HW] Bush and Jim Baker, who set Starnes up on his feet with a new grubstake.

... Brewton also learned that Raymond Hill, Mainland's chairman, had since boyhood been a friend of another Houston lawyer, James Baker, then secretary of the treasury, later secretary of state. and now White House chief of staff. Once Hill even represented Baker in a legal matter. In fact, the Baker and Hill families had been close for decades, at times sharing Christmas dinner. ...

Brewton learned that federal regulators had hired a local law firm to investigate Mainland, and that laywers from the firm wanted to file suit against Hill and others. They had actually drawn up legal papers alleging fraud. But sources at the firm told Brewton that its managing partners, consulting with federal regulators, overruled the lawyers on the case and the papers were never fileed. The firm was Andrews & Kurth - the law firm of which Hill's good friend James Baker had been managing partner, until he left for Washington.

... Brewton obtained a copy of the proposed lawsuit. It said that payments Mainland had made to Baker's friend Hill were 'unreasonable, grossly excessive and not commensurate with the performance of the duties he owed to Mainland." Brewton took the allegations to federal prosecutors. They seemed interested only in going after whoever leaked the papers to him.

The relationships between Bush, Baker, Misher, Beebe and Clarke are described in detail by the author of the aforementioned article. An excerpt:
What makes Clark's association with Beebe in the ownership of a national bank especially remarkable is that, in 1985, Misher's friend James Baker, then treasury secretary, appointed Clarke to be U.S. comptroller of the currency, in charge of monitoring the nation's national banks. When Misher's friend George [HW] Bush became president, Clarke - an investor with Beebe in the First National Bank of Jefferson Parish - was reappointed to another term.

Clarke quit the comptroller's job this February under fire from Congress over conflicts of interest that he denies. But Congress didn't know the half of it.

Brewton found out that as a lawyer, Clarke had also helped organize the West Belt National Bank of Houston, which was owned in part by two of the country's biggest S&L loan defaluters (more than $200 million each, effectively from the taxpayers). West Belt was used to send borrowed S&L millions to an overseas trust whose principals controlled a similar trust that was used by drug dealers and people with CIA connections. Clarke says he doesn't remember the two big defaulters - or the names of any of his clients who wanted the bank organized - and he denies knowing about any shady trusts. Either way, however, it doesn't speak well of his ability to police the nation's banks.

The Rest of the Iceberg