“UNLEED STATES DEPA RPMENT OF JUSVICE FEDERAL BUREAU OF INVESTIGATION 0 In Reply, Please Refer to WASHINGTON 25, D.C. + Vile No. : a ‘ey OTPNL - ' Mle No | VeRO Scone) May 22, 1961 ARTHUR JAnEs BAL LETT I, et al. ‘ On May 3, 1961, Colonel Sheftiold Edwards, / Director of Socurity, Central Intelligence Agency (CIA) furnished the frollovaing information. . Colonel sdwards advised that in connection with CIA's operation against Castro he personally contacted Robert Maheu during the Wall of 1960 for the purpose of using Naheu as a MNcut-out'" in contacts wath Say Giencana, a known hoodlum jn the Chicego aren. Colonel Mdwards said that since the undervorld controlied gambling activities in Cubn under the Batista government, it was assumed that this element would . svccs and contacts in Cuba which StLLi Cuome AGS LU nav G SOGLCOS ann oye oe er ae ; perhaps could be utilized succesSiuLiy in connection witli 4 : 2 Cifits clandestine efforts against the Castro government. “Ps a result, HUaheu's services were solicited as a "cut-out poss { t 4 4-05 because, of his Ole entree into uncerwerld circles. Haheu obtained Sam Giancana’ s eesistance in this rogard and according to Zdwards , Giancena gave every indication or cooperating tarougn saneu An attempting to accomplish several clandestine efxorts in Cuba. Edwards added that none or Giancana's ciforts. nave materialized to date and that several of the plens.still are working ard may eventually "pay orf." Colonel Edwards related that he had no direct ke | contact with Gianenna; that Ci iancanals activitics were aed completely “oack stopped” by Mahou and that Mancu would frequentiy report Gianeans's ection and information to Edwards. No details or methods used by Maheu or Giancana in accomplishing their missions were over reported tec Edwards. Colonel Mdwards said thet since this is “dirty . business'' he couid not afford to nave knowLedee of the actions — of Meheu and Giancane in pursuit of any mission for CIA. - , Colonel Edwards added that he has neither given Mahcu any , instruction to use technical installations o# any type nor has : the subject of technical installations ever come Up betwecn : Edwards and tYiaheu in connection with Giancana's activity. _ , \ | 22 ee — _ ' | | HW 54653 Docld:324273557 Page 24 an)
DR A eG laal hetee 9 ANN RO ate Batter et ET Nee * awh of HW 54653 Ca rn ' ; ~ . 7 o - . oa PeNT ee 5 ve rp me - ' OY am . - gy Boats ] . rrereye) board Lu rans as Colonel Edwards. related that Mahcu did core we concerning the arrest in Las Veras of Bailotti for Vwar HMaheu cautioned Edwards that the Balletti arvest couliad some embarrassment since Salletti was in Las Vegas att’ ‘obtain coverage on Some "Hollywood people” in conncct:: Giancenana's efforts for Cre. Sdwards said that he did the facts of the Ballett nse and Maheu claims Mabie too far’ in nis ortonts to obtain ingormavion. savor that he was ubayare of any reason for this activity of n las Yeras. and that Giancane 's activity or Giancana ¢ the anti-Castro activity was left compl: furtherance Haheu'ts hands. OmnD Colonel Edwards advised that only Mr. Bissell. Director of Flans, CIA) and tvo others in CIA were te Giancana ~- Maheu activity in pehalf of CIA's program « Allen Dulles was completely unaware of Edwards! contac Weheu in this connection, He added that Mr. Bissell, his recent briefings of General Tavior and the Aéttorn. fee torre PES witth thoir Ananiries into CYA relating we wane Se ee ee dines Cuban situation, toid the Attorney General that some = associnted planning included the use of Giancana and’ underworld against Castre. . Pa vu: “Property of FBI is a 1 pets ind its Contents are ned to you by the FBI, and neither jt ‘Foul nor its con: ai uts are distri} buted outside the to which logne rd” moeeney Docld:324273557 Page 25
ere i ¥ i CENTE i etic NCE AGENCY _ WASHINGTON 25, D.C, 14 May 1962 MEMORANDUM FOR THE RECORD: ; SUBJECT: Arthur James Balletti ct al - Unauthorized Publication or Use of Communications ~ l. This memorandum for the record is prepared at the request of the Attorney General of the United States following a complete oral briefing of him relative to a sensitive CIA operation ‘conducted during the period approximately August 1960 to May 1961. In August 1960 the undersigned was approached by Mr. Richard Bissell then Deputy Director for Plans of CIA to explore the possibility of rnounting this sensitive operation against Fidel astro. It was thought that certain ganmibling Interests which had |! formerly been active in Cuba might be willing and able to assist and further, might have both intelligence asscts in Cuba and commiunications between Miami, Florida and Cuba. Accordingly, Mr. Robert Maheu, a private investigator of the firm of hiaheu and King was approached by the undersigned and asked to establish . contact with a mermber or members of the gambling syndicate to _ explore their capabilities. Mr. Maheu was known to have accounts with several prominent business men and organizations in the United States. Mahcu was to make his approach to the syndicate as appearing to represent big business organizations which wished ‘to protect their interests in Cuba. Mr. Maheu accordingly met and established contact with one John Rossclli of Los Angeles. : Mr. Rosselli showed interest in the possibility and indicated he had some contacts in hilarni that he might use. Mahcu reported that John Rosselli said he was not interested in any renzuneration but would seek to establish capabilities in Cuba to perform the desired project. Towards the cnd of September Mr. Maheu and . Mr. Roseclli proceeded to hiiami where, as reported, Maheu Was > : Introduced to Sam Giancana of Chicago. Sam Giancana arranged for Maheu and Rosselli to meet with a "courier" who was going back Top CE: a, 03 pases a Liat Le HW 54653 Docld:32423557 Page 26 she woot ’ , . soe BEN ee ale Fn tA a IR ER RE
i ' A figure of one hundred fifty thousand dollars was set by the Agence: end forth to Havana. From information received back by the ‘ courier the proposed operation appeared to be feasible and it was decided to obtain an official Agency approval in this ecard, ERIeres eee {to be made cn compiction Of the Oneedtt ciendto be ald only ta the principal or principals who would conduct the operation in Cuba. Maheu reported that Rosselli and Giancana emphatically stated that they wiched no part of any payment. The sned then bricfed the proper senior officials of this Agency. roposal, Knowledge of this project during its life was kept to a total of six persons and never became a part of the project current at the time for the invasion of Cuba and there were no memoranda on the project nor were there other written documents or agreements. The project was duly orally approved by the said undersi Senior officials of the Agency. 2, Rosselli and Mahcu spent considerable time in Miami talking with the couricr. Sam Giancana was present during parts - of these meetings. Several menths after this period Mahcu told me- that Sam Giancana had asked him to put a listening device in the room of one Fhyllis McGuire, reported to be the mistress of Giancana,. At that time it was reported to me that Mahcu passcd the matter _ — over to one Edward Du Boise, another private invedtipator. It appears that Arthur James Balleiti was discovered in the act of installing the Mstening device and was arrested by the Sheriff in Las Vegas, Nevada. Maheu reported to me that he had referred the matter to Edward Du Boise on behalf of Sam Giancana. tthe . _time of the incident neither this Agency nor the undersipned knew _of the proposed technical installation. Mahou stated thet Onin Giencana thought that Phyllis ‘MeGuire might know of the proposed operation and might pass on the information to one Dan Rowan, another friend of McGuire's. At the time that Maheu reported this to the undersigned he reported he was under surveillance by agents of the Federal Bureau of Investigation, who, he thought, were exploring his association with John Rosselli and Sam Giancana incident to the project. I told Maheu that if he was formally ap-! proached by the FI, he could refer them to me to be briefed that he was engaged in an intelligence operation directed at Cuba. i . 3. During the period from September on through April efforts were continued by Rosselli and Maheu to proceed with the Operation, The first principal in Cuba withdrew and ancther principal HW 54653 Docld:32423557 Page 27 + po N IPC eX L ’
root a ers veel ‘ Ai ceve Le] | | _ was selected as has been bricfed to The Attorney General, Ten «* thousand dollars was passed for cxpenses to the second principal. He was further furnished with appr oxirmately one thousand dollars , ‘worth of communications equipment to establish communications - between his headquarters in Miami and assets in Cuba. No | monies were ever paid to Rosselli and Giancana. Maheu wag paid part of his expense moncy during the periods that he was in " Miami. After the failure of the invesion of Cuba word was sent through Maheu to Rosselli to call off the operation and Rosselli vas told to tell his principal that the propogal to pay one hundred - fifty thousand dollars for completion of the operation had been definitely withdrawn. ar Ss 4. Inall this period it has been Gefinitely established from .cther sources that.the Cuban principals involved never discovered or believed that there was cther than business and syndicate interest in the project. To the knowledge of the undersigned there were no "leaks" of any inforrnation concerning the project in the Cuban community in Miami or in Cuba. 5. Ihave no proof but it is my conclusion that Rosselli | and Giancana guesecd or assumed that CIA was bchind the project. I never rect either of them _ 6. Throughout the entire period of the project John Rosselli was the dominant figure in directing action to the Cuban principals. Reasonable monitoring of his activities indicated that he gave his best efforts to carrying out the project without requiring any com- mitments for himself, financial or otherwise. 7. In view of the extreme sensitivity of the information set forth above, only one additional copy of this memorandum has been mude and will be retained dby the Agency. Sheffield Edwards | HW 54653 Docld:32423557 Page 23
3 November 1960 oe 4 MEMORANDUM FOR THE RECORD SUBJECT: Minutes of Special Group Meeting, 3 November 1960 PRESENT: Mess My WA 1, Guba rs. Merchant, Douglas, Gray, Gen. Cabell, Gen. Lansdale — Mr. Gray inquired once more as tc the status of planning for problems which would arise post-Castro. Mr. Merchant said he would check into the progress of the State Department group whicn has been charged with developing recommendations on this matter. From this the Group launched into a far-ranging discussion of the entire concept of U.S. efforts against Castro. supported by Mr. Gray and Mr. Merchant, expounded the idea that perhaps things have now progressed to a point where covert activities | of the type originally envisaged for CIA to undertake wili not be effective. | Mr. Douglas referred to the extensive program of the militia, Mr. Gray | ‘cited the matter of arms from the Soviet bloc, and Mr. Merchant dwelt | on the increasing effectiveness of Castro's measures to control the I population in ways which the Communists have developed so well. Mr. Douglas, The latter said that he and others in the State Department had originally thought that a popular rebellion would develop within Cuba and that ; this could be augmented by the comparatively small-scale efforts of ,- Now the same people are beginning to feel exiles under CIA control. more and more that despite the numerous defections and the economic deprivations being experienced by the middle and upper classes, time is actually. working on Castro's side. Mr. Merchant said that he foresaw that there would occur a point in time beyond which covert intervention would not do the job. -PHOPERTY 10 THE WHITE HOUSE Gi ried f- HW 34653) Docld:32423557 Page 29 wom wae ty GC: 1 . woe wa? er a he er A it d -~ Mr. Gray expressed the opinion that we will never be able to "clean up" the situation without the use of overt U.S. military force. He suggested the possibility of using the ClA-backed exiles to mount a simulated attack on Guantanamo in order to offer an excuse for overt bo. a cum te? feb. , In Co MO. TLiECAL FAIL LO. 220 ——RO MAT eet Avi ~ So \
HW 54653 intervention. This led to an involved discussion, the general conclusion of which was that such action on our part would not be desirable, but that should Castro be foolish enough actually to attack Guantanamo this would almost certainly mean war. Mr. Gray said that he had had the subject of Cuba inscribed on the NSC. agenda for next Monday in order to be able to arrive at a top-level decision on this very point. - He thought it essential that the policy of the U.S. should. be completely understood by responsible officials, so that any overt Cuban act would be met with a previously-agreed-on response. Mr. Merchant stated that, apart from any attack on Guantanamo, he thought that some of the previous argumentation in today's mecting was faulty, in that we could not have it both ways. By this he meant: that it is not logical to conclude that an indigenous uprising is impossible and yet that it is feasible for the U.S. to go in overtly and "clean up the mess." He pointed out that if Castro's support were such that an uprising was out of the question then an open invasion by the U.S. would be met by a hostile population and we would be plunged into a situation _ like Algeria. ~ ‘ ‘Turning to the immediate problem before the Group, Gen. Cabell outlined the general proposal to establish bases in the U.S., with the reasons for coming to this conclusion. He cited specifically the possibility of U.N. investigation in Guatemala and the increased scope of the program, which has been brought about by tHe increased strength of the Castro regime. All members of the Group expressed serious» doubts as to whether such activity could be kept at all secure. Mr. Merchant said at one point, that although this does not. representa final conclusion on his part, he is inclined to think that the proposal embodies the worst aspect of both worlds; that is, the choice should rest between continuing our operations entirely on foreign soil or preparing to make the best possible case for overt intervention. Mr. Gray suggested that the decision could be put up to his associates at the same time Tibet is discussed. Mr, Merchant agreed that this is where it should end up, but asserted that he is not prepared to move in that direction until a survey has been made of the possibilities of keeping operations in the U. S. unrevealed. In this connection Gen. Cabell mentioned the possibility of using a refugee organization - either an existing one or a contrived one - to backstop the operations. [Ao onaad crepey eee iy PROPERTY ( eed bad ike TRE WHITE HiuUci vic, Docld: 3274273557 Page 30
t ———e- HW 54653 Mr. Douglas said that in any case he would be prepared to have the Department of Defense investigate the availability of specific locations that would be suitable. Finally, Mr. Merchant asked whether any real planning has been done for taking direct positive action against Fidel, Raul and Che Guevara,” “Hie said that without these three the Cuban Government would be leaderless and probably brainless. He conceded that it would be necessary to act against all three simultaneously. Gen. Cabell pointed _ out that action of this kind is uncertain of results and highly dangerous in conception and execution, because the instruments must be Cubans. He felt that, particularly because of the necessity of simultaneous action, it would-have to be concluded that Mr. Merchant's suggestion ira hevand our canahilities. L ~ . f) Ore. (ot ee Nat Rees eed TOMET OPO EMA PROPERTY Coed 7 be ene) Cait THE WHITE HOUSE Urritt Docld: 3274273557 Page 31
HW 54653 \\ Docld:32423557 Page 32 iA, Supply Drops - Cuba Gen. Cabell explained that the Pinar de Rio supply mission had not taken place because of the absence of specified communication from the DZ, and the Escadmbray operation had been canceled because of weather. He said that these missions are still planned, and assumed. _that the Group had no objections. The members so signified. V5, U-2, Cuba Gen. Cabell said that the photographic coverage on the first flight had been only about 50%, because of cloud cover. He continued ‘that we are analyzing the exact results on a priority basis and that some time after the middle of next week we should be in a position to make recommendations for the missions réquired to extend the coverage. Mr. Gray commented somewhat wryly that this was all right with him since he "would certainly not be available to discuss anything of this kind before the middle of next week." The other members appeared to have the same reaction. V6. Policy Consideration Re Cuban Exiles Mr. Gray said that Assistant Attorney General Yeagley had spoken to him after his meeting with Col. King and Messrs. Esterline and Holman. He had said that the information, given to him by the CIA representatives, and the arrangements for future coordination if necessary, were entirely satisfactory to him. He had stated, however, that a problem remains with respect to action the FBI should take; that is, the FBI needs guidance in its handling of Cuban exile groups. other than those under the direction of CIA. The Group agreed that the best way to attack this problem would be to have Mr. Yeagley attend next week's Special Group meeting and discuss the matter at first hand.. Mr. Parrott was asked to make arrangements for this. J 7. Value of Cuba to the USSR as a Base Vis-a-vis Cape Canaveral Mr. Parrott gave Mr. Merchant the gist of the OSI memorandum a PROPERTY At THE WHITE HOUSE OF FIOL nel x suey ~ ooo Se.
WS ew hice BR bee 2 ton ay aid de on this subject, which had been discussed with the rest of the Group a on 20 October 1960. THOMAS A. PARROTT Oe o7 ns Ro le top kt . ° meres hae Ey ! . puikoh sos ba ie Por ATTA oe abe Bes ive f TBE Wii. bye" HW 54653 DocId:32423557 Page 33. ay Te wa Ree ee ne