Francesco/who-killed-jfk huggingface dataset:
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for cover reasons, cannot be refused. Over the past few years, this has involved badging operations for private companies, i.e. airlines, schools, etc. The company has never made a true profit. To maintain its image among its competitors, however, its books reflect a small profit on which Federal and state taxes are paid. The office presently employes four staff agents, five contract agents and fourteen proprietary employees. During Fiscal Year 1974, the project expended 2.9% of the OS budget ($551,000 vs. $19,026,530).MHBOUND, as noted, has provided support to the Office of Security and Agency operators on sensitive covert operations and investigative matters, CI/CE support for components of the Agency, custodial support, courier support on truly covert activity, guard support, special non-government and sensitive inquiries (CI/CE probes through STPROBE), technical and physical support in surveillances and Agency proprietary support. Its commercial capabilities have included: confidential consultants, internal security management, security surveys, counter-audio measures and inspections, development, installation and maintenance of security protective equipment and devices, classified material storage equipment, secure destruction of classified waste, incinerator equipment sales, polygraph examination, investigations (personnel), and industrial undercover activities.A unique example of its Agency security function was project STPROBE, which utilized both security probes and security pene-
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- 94-1 -trations. A security probe is a testing of the current effec-tiveness of all or part of a security system within an Agencyor Agency contractor's installation. A security penetration isan internal covert investigation and search targeted at possi-ble subversive elements within a facility who may be engaged inforeign intelligence or acts of sabotage or who by lack of securitydiscipline or gross malfeasance may be weakening the securitystructure of the project or facility. It is, in essence, counter-intelligence against a domestic installation. Eastman Kodak, forexample, was the target of a probe. An agent was sent under thenatural* cover of a union construction man to Eastman to gainemployment as a pipefitter. He succeeded in gaining access tothe target, and developed information on the installation andits personnel in surrounding areas of the union hall, bars, cafes,and in other appropriate places around the target area. Similarprobes were conducted against Pratt and Whitney in West Palm Beach,Florida, Lockheed Aircraft Corporation in Burbank, California, andother targets in New York, Nevada, and Arizona.These entities serve a useful function within the scheme ofnecessary security required by sensitive Agency operations. Theirutility, however, as in the case of nearly all proprietaries isrelative to policy and "flap" demands. As one Agency commentatorphrased it when Newsweek revealed the relationship of L. LeeBean and Paul Hellmuth of the Boston law firm of Hale and Dorr* He was in fact a legitimate tradesman.
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- 94-2 -with the CIA in setting up proprietaries:Proprietaries have been and will continue to be an important tool to achieve selected operational objectives. Their use, however, has been drastically cut back, more because of changes in the international scene and in operational priorities than as a result of embarrassing exposures.Of course, as has been the case with nearly all other proprietaries, not everyone within the Agency has been satisfied with the mechanism.Indeed, there has been constant review, criticism and internal restraint due to a certain fear and suspicion of entities such as Anderson which are "out there" and not readily accessible to the leash. For example, in June of 1964, the Chief of the Operation Support Division wrote to the Deputy Director of Security (Investigations and Operational Support) concerning MHBOUND's policy and procedures. In terms of operational objectives he noted that they had "created an operational support entity of dubious capability and with ill-defined objectives or purpose." He suggested that they "look this ugly duckling in the face" and see if it could be terminated gracefully or "see if we can nurture it into a productive and responsive bird of acceptable countenance."*He "received the definite impression that there may be some grey area with regard to the internal channels of command and administrative direction." He noted that there was confusion resulting* In many cases these concerns dealt with the inability of the entity to provide adequate cover for itself in order to more adequately fulfill its role. In one instance, the physical backstopping of MHBOUND was inadequate. After this was rectified, one official noted:It is felt that this step has strengthened the Anderson Enterprises' cover, both in Boston and Washington so that now the company could withstand any inquiries, except that of an official government investigation.
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- 94-2-a -from lack of a clear-cut distinction "at just what level policymatters may be decided . ." Management procedures for theproject were such that "under the current status everyone may takecredit but no one could be blamed." As far as operational capa-bility was concerned he remarked:Quite candidly, I am somewhat concerned about theoperational capability of Project MHBOUND. It seems,as a result of its Topsy-like growth, to be orientedtoward the military and the building trades. Quitecandidly, it is felt that the base must be broadened.Further, I am far from convinced that we have yetdeveloped anywhere near the professional status neces-sary to "sell" this Project as one having unique opera-tional capabilities sufficient to justify its existence.In other words, I am not impressed with the capabilityas it now exists nor am I sure that we can sell thisproduct and then be assured that it can perform in asatisfactory manner.His comments concerning the attitude of Agency personnel were notunique to this proprietary, but they are set out here as illustra-tive of the singular problems these entities pose. His remarksalso show the dangers inherent in some areas of this activity.It would seem that this Agency, particularly operatingcomponents, are insistent upon pursuing an "ostrichpolicy" when it comes to their operational securityprocedures. I have personally witnessed almost hyster-ical reactions to criticisms as well as total rejectionsof practical suggestions with regard to operationalsecurity procedures. Now it seems to me that we aregoing about this in a very awkward and embarrassingmanner. WE ARE, IN EFFECT, ALLOWING THE WRITERS OFSENSATIONAL BOOKS SUCH AS THE "INVISIBLE GOVERNMENT"TO PROVIDE THE NECESSARY INFORMATION AND PRESSURE ONTOP AGENCY MANAGEMENT TO CORRECT GLARING AND STUPIDCOURSES OF ACTION BEING PURSUED AT THE WORKING LEVEL.I have been the object of considerable personal ridiculedue to my stand in opposition to the unrealistic coverand operational security procedures as they relate tocertain aspects of (CIA Operational Base) for example.
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- 94-2-b -IF we had the authority and capability to have made an objective probe of this sensitive activity we may have been able to have surfaced these obviously ridiculous procedures in such a manner that corrective action would have been taken. Now is the time to present the case in light of the abiding fear of publicity currently permeating the Agency. I recommend that we go after the authority to make independent (uni-lateral) probes and/or probes requested and known only at the very highest levels of the Agency with the results discreetly channeled where they will do the most good. There necessarily follows the unpleasant subject of money. As distasteful as it may be, it is no good to have the authority without a sufficiently large confidential fund set aside and earmarked for independently iniated activities.He emphasized that if the Agency did not take the above kind of action to monitor its "image" at the operational level, "we will continue to be plagued with the unsolicited and uncontrolled critique through the newspapers, periodicals and books." He critically concluded:Further, I challenge anyone to deny that such exposes to date are largely true and usually the result of our own "ostrich policy" and refusal to face the fact that we have operated in some relatively amateurish manners over the years.
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- 94-3 -Such concerns have extended beyond these operational levels to general issues of propriety and legality. For example, as noted earlier (*supra*, p. 90) the so-called "Anti-Pinkerton Act" prohibits a company engaged in investigative work from contracting with the Federal government. Butthe Agency and its predecessor organizations began contracting as early as November 1942 with certain commercial, investigating companies to perform investigations and to provide commercial credentials to, and cover backstopping for, Agency investigators.As of March 1975, the Office of Security had a relationship with three such companies which issue their credentials to Agency investigators and backstop the cover of same. Two of the three have previously "conducted limited personnel investigations" on behalf of the Agency. During that same period the Director of Security asked the General Counsel of the CIA whether the "Anti-Pinkerton Act" prohibited the Office's continued contractual relationship with these three private companies or their employees for purposes of conducting investigations or providing cover, or both. The General Counsel responded as follows:I am aware that in fulfilling the responsibilities placed upon your office in support of the Agency's mission, many investigations must be conducted without revealing Agency interest and in some, without even revealing Government interest. Absent the relationships you question, you could not discharge your responsibilities. It is this inability to accomplish your tasks which causes recourse to the Agency's rather broad statutory authority to expend funds as contained in Section 8 of the CIA Act of 1949, as amended. This authority providesNW 50955 DocId:32423532 Page 123
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- 94-4 -(a) Notwithstanding any other provision of law, sums made available to the Agency by appropriation or otherwise may be expended for purposes necessary to carry out its functions, including --(1) personal services, including personal services without regard to limitations on types of persons to be employed, .* * * *(b) The sums made available to the Agency may be expended without regard to the provisions of law and regulations relating to the expenditure of Government funds; and for objects of a confidential, extraordinary, or emergency nature, such expenditures to be accounted for solely on the certificate of the Director and every such certificate shall be deemed a sufficient voucher for the amount therein certified.It is my opinion that this authority permits the Agency to continue the two practices as set out above without fear of violation of the Anti-Pinkerton Statute.He closed, however, with the following admonitions:There are, of course, other dimensions to the question you raise. As a matter of policy I believe the practices should be reviewed at the highest levels within the Agency and, perhaps, cleared with the Agency's oversight committees. In addition, if one of these relationships became public, it must be recognized that there will be allegations that the law has been violated. On balance, it is my view that these considerations are not so significant as to warrant a termination of the two practices with the three companies. It is suggested, however, that any subsequent, projected association with a detective company or private investigative company beyond the three present companies be reviewed with this Office prior to its initiation.NW 50955 DocId:32423532 Page 124
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95# VII. BEYOND "DOING BUSINESS": PEAK NON-GOVERNMENT SECURITY INVESTMENTS BY PROPRIETARIES ACTIVE AS OF DECEMBER 31, 1974As described *infra*, MHMUTUAL (the insurance and pension complex) has invested heavily in both domestic and foreign securities markets. Its portfolio runs the gamut of notes, bonds, debentures, etc. But other proprietaries have also used this investment route as a method of increasing capital and insuring adequate cover.For example, KMJAGGERY is a Delaware corporation located in Washington, D.C., which purchases general merchandise in a manner which cannot be traced to the United States Government. It provides covert procurement for the Office of Logistics (CIA). Its total purchases from January to September 1974 were $437,500. It has no outside commercial business and has five employees. Yet, as of December 31, 1974, that entity had invested $149,000 in time deposits.Another covert procurement mechanism under this same Office is SPECIAL STOCK ACCOUNT #3. This is also a Delaware corporation with an address in Baltimore which purchases arms, ammunition, and police related equipment in a manner which cannot be traced to the United States Government. The company has no employees and is managed by Headquarters officials in alias. As of December 31, 1974, that entity had invested $37,500 in a certificate of deposit.LPJACK was a travel service which was sold recently to an Agency employee at the time of his reitrement, who had ostensibly owned the firm before but in fact only managed it for the Agency. As of December 31, 1974, that entity had invested $35,000 in a certificate
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- 96 -of deposit.*LPDICTUM/LPSPICE was an investment company which was dissolved. As of March 31, 1973, it had invested $100,080 in Petrolcos Mexicanos, S.A. Mexico.HBSANDSTRAP is a Delaware corporation located at Washington National Airport which has provided secure air support for Agency employees and classified pouches between Headquarters and other Agency facilities in the United States. The company has accepted commercial charter flights from non-Agency customers for income and cover purposes. As of December 31, 1974, it had invested $144,000 in a certificate of deposit.QRTROW was a former proprietary and is now an institute located in Europe which "seeks to influence and encourage moderate and pro- democratic youth leaders and government officials concerned with youth and higher education." According to the AgencyThe Agency withdrew its support from the institute in 1974 and turned over all assets to the management of the organization. In addition, the Agency provided surge funding in the amount necessary to enable the entity to exist in reduced form for about one year during which time the management would attempt to arrange private support.As of March 31, 1972, that proprietary had invested $50,000 in time deposits.LPMANTLE is part of the WUTACTIC complex managed by the Cover and Commercial Staff to provide operational support mechanisms for DDO foreign operations. It is a Delaware corporation which is used* The Agency today uses this firm for the purchase of airline tickets for travel in support of sensitive projects. It is estimated by the Agency that CIA business represents about 30% of the gross airline ticket sales of the entity on an annual basis.
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97to collect the proceeds from the sale of Agency proprietary entitiesand to refund such proceeds to the Agency. At December 31, 1973, itstotal assets were $650,220 and its total liabilities were $633,897.Total stockholders equity was $16,323. It has no employees. Asof December 31, 1974, it had invested $400,000 in a convertible subor-dinated debenture from the sale of a company and $45,440 in notesreceivable. Another company in this TACTIC complex is LPGLITTER.It is a Panamanian company which was used as an investment vehiclefor funds reserved for new commercial operations requiring Agencyinvestments. The investment project was terminated and all funds werereturned to the Agency. The company has no employees. As of December31, 1973, it had invested $246,757 in a Security Note of PepsicoCorporation, N.V.IUQUEST was part of the air support complex of the Agency proprie-taries. Substantial assets of it were sold and the entity dissolved.As of December 31, 1974, it had invested $215,000 in a certificate ofdeposit.LPPANDA/LPMET is part of the management and accounting complex.As of December 31, 1974, it had $470,000 invested in time deposits.
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- 98 -# SCHEDULE IPEAK NON-GOVERNMENT SECURITY INVESTMENTS BY PROPRIETARIESACTIVE AS OF 31 DECEMBER 1974| PROJECT/ENTITY                      | TYPE INVESTMENT                                         | DATE     | AMOUNT   || ----------------------------------- | ------------------------------------------------------- | -------- | -------- || MHMUTUAL                            | See Portfolio                                           |          |          || LPPANDA/LPMET                       | Time Deposits                                           | 12/31/74 | $470,000 || IUQUEST                             | Certificate of Deposit                                  | 12/31/74 | 215,000  || LPTACTIC/LPGLITTER                  | Security Note - Pepsico Corp. N.V.                      | 12/31/73 | 246,757  || LPTACTIC/LPMANTLE                   | Convertible Subordinated Debenture from Sale of Company | 12/31/74 | 400,000  ||                                     | Notes Receivable                                        | 12/31/74 | 45,440   || QRTROW                              | Time Deposits                                           | 3/31/72  | 50,000   || ABDERRICK/HBSANDTRAP                | Certificate of Deposit                                  | 12/31/74 | 144,000  || LPDICTUM/LPSPICE                    | Petrolcos Mexicanos, S.A. Mexico                        | 3/31/73  | 100,080  || LPJACK                              | Certificate of Deposit                                  | 12/31/74 | 35,000   || KMJAGUARO/KMJAGGERY                 | Time Deposit                                            | 12/31/74 | 149,000  || KMJAGUARO/SPECIAL<br>STOCK ACCT. #3 | Certificate of Deposit                                  | 12/31/74 | 37,500   |
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- 99 -VIII: MHMUTUAL: THE INSURANCE-INVESTMENT COMPLEXa) A BRIEF HISTORYMHMUTUAL is a complex of insurance companies, most of whichare located abroad, operated by the Agency to provide the followingservices:a) reinsurance of aircraft damage or liability risksostensibly insured under commercially issued policies(for cover);b) extending term life insurance, annuities, trusts andworkmen's compensation for independent contractorsand agents working for the Agency who are not entitledto U.S. Government benefits;c) handling escrow accounts* for agents;d) limited operational support activities, i.e., holdingreal estate formerly used in Agency operations abroad; **ande) investing in domestic and foreign markets to obtainearnings to fund the above.MHMUTUAL was created in 1962 to provide death and disability bene-fits to agents and beneficiaries when security considerations pre-clude attribution to the U.S. Government. The losses during theBay of Pigs prompted its establishment. From sixty-seven (67) toseventy-three (73) companies operated originally under the DomesticOperations Division and later a board of directors controlled by theOffice of General Counsel. This internal board of the project madeinvestment decisions.* Escrow accounts are established when an agent cannot receive his  full payment from the CIA without attracting suspicion. The funds  not paid to the agent go into escrow accounts and are invested under  MHMUTUAL.** The CIA's domestic real property holdings appear as Appendix E.
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- 100 -Lawrence Houston, retired General Counsel of the Agency, testified that his office instigated the establishment of MHMUTUAL. This was because his staff would be the repository of all problems related to the death or disability of a person during the course of his Agency work. These problems were all handled in what Houston called a very "sketchy way" and this was simply undesirable from all points of view. Moreover, when the Agency went into air proprietaries on a large scale there were certain risks which simply could not be underwritten commercially.So somewhere in the late 1950s or around 1960, I think I was the one that posed that we might organize our own insurance entities. I had a couple of lawyer friends deep in the insurance business, and I suggest I talk to one of them, and he promptly said, well, it so happens that I have a couple of offshore insurance entities that I can make available to you. And we took a look at them. It looked like they were organized properly for the purpose. They cost practically nothing. They were just shells. But they could be filled out. So if my recollection is correct, we acquired these two as the first step in what became the MUTUAL project.Simultaneously, the decision was made that if the Agency was going to maintain such a capability, they had to have enough body and backstopping so that if a suspicious foreign intelligence outfit tried to investigate, they would stand up under investigation as would any normal insurance outfit. In other words, they had to appear to have financial stability, they had to have names that could stand up and answer questions, and in other words appear to be in the normal business of writing the type of annuities (and) insurance, death and disability.This concept was totally organized originally then under the Domestic Operations Division. DOD eventually recommended that the complex
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- 101 -be transferred to the Office of General Counsel. This occurred,and it remained there until Director Colby decided in conjunctionwith Mr. Houston to transfer for operational reasons to the Coverand Commercial Staff. This was done because CSS had the expertiseand manpower. Moreover, Mr. Colby took exception to the Boardconcept because he felt that it diluted the line responsibility bywhich all other projects were administered.As the number of insurance companies grew to cover increasingdemands placed upon the Agency by more agents, the general fundwhich was retained to backstop all the needs of these companiesgrew, and "the question was what to do with your money." HoustonexplainedNow, insurance companies are normally in the businessof investing their funds, and so this being the normalthing, it appeared to us necessary to preserve the nor-mal appearance of these insurance companies to carryon investment programs for the funds involved, andthere were a variety of investments to be considered.You could go into U.S. Treasury Bonds, notes and bills,but actually, from the point of view of insurance bus-iness practice, this was very unusual. It would bevery, very unusual in the insurance field. Usuallysome of them would have some investment in bills, notesor bonds, but it was a very small part of their portfolio,and to put it in nothing that that we thought would bea dead giveaway. So we first went in the direction ofhaving a general portfolio somewhat similar to the nor-mal insurance company's investment practices, and Ioriginally recommended that we have the board of direc-tors so that we could have available and demonstrate thatwe had available the best competence the Agency had in-ternally to pass judgment on what to do with their money.Because of shifts in the stock market which made it not look aspromising as it had been during the 1960s, MHMUTUAL went intocertificates of deposit, the Eurodollar market and the bond market.