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2025 RELEASE UNDER THE PRESIDENT JOHN F. KENNEDY ASSASSINATION RECORDS ACT OF 1992

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CIA Internal Use Only

Access Controlled by DDO

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HISTORICAL STAFF

CENTRAL INTELLIGENCE AGENCY

WESTERN HEMISPHERE DIVISION

1946 - 1965

DDO HP 324

David R. McLean

Approved:

David A. Phillips

Chief, Western Hemisphere Division

Directorate of Operations

December 1973

VOLUME I

Copy No. 1:

copy No.

2:

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Latin American officers in Panama, and also supplied

material for the US Army Intelligence School to use

in training foreign students on Communism. Nine CIA

officers lectured at a Fort Holabird course for senior

Latin American officers in 1961, capping their presenta-

tion by producing a Soviet defector who spoke on the

267/

Soviet intelligence service.

CIA maintained a station in Havana throughout

1960 but faced increasing operational difficulties--

some of CIA's own making. Probably the outstanding

flap was the capture of three TSD technicians, caught

in the act of planting a microphone in the New China

News Agency office. An analysis of this operation,

made when the technicians were released 18 months later,

showed that they had ignored many of the basic rules

tradecraft. On the other hand, the Cubans had given

them only perfunctory interrogations.

In 1960 the Havana Station consisted of James

A. Noel, chief of station; Arthur Avignon, deputy;

about six case officers and as many secretaries.

Life

was unpleasant; Castro agents shadowed American Em-

bassy personnel, monitored their telephone conversa-

tions, and tried to pump their children about what

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daddy was doing. As relations between the United

States and Cuba deteriorated the station concentrated

on support for the Cuban invasion then being planned,

and on developing stay-behind assets. Frank Belsito

and later Ralph Seehafer were designated as "stay-

behind officers" and regularly reported on a dozen

ox so agents and nets, a few of which survived the

station's closing.*

The break in diplomatic relations with Cuba

was predictable, and during the fall of 1960 Embassy

dependents were moving themselves and their house-

hold effects back to the United States. Avignon

made a special trip on the Havana-Key West ferry

to take out his personal car, silverware, and a

$1,500 violin. Station files not absolutely essen-

tial were crated and shipped back to Headquarters.

Case officers were working 15-hour days, seven-day

weeks.

When the break came, the Embassy had three

days' notice that it would close on 4 January 1961.

The CIA station had just installed a new incinerator

* One stay-behind agent

• AMFOX-1, was still report-

ing in 1973 but WH Division believed he had been

doubled.

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and managed to burn what files it could not ship to

Key West on the attache aircraft. When they were

not burning papers or smashing technical equipment,

case officers were caching radios or making advance

payments to agents left behind.

On 4 January station personnel met at the

Embassy, rode in convoy to the ferry, and sailed to

the States. A few, like William J. Murray, had main-

tained houses until the end and lost everything in

269/

them.*

This was the period when Fidel Castro, as yet

unrestrained by his more cautious and practical Soviet

advisors, was busily stirring up trouble in the

Western Hemisphere and popularizing the phrase

"exporting the revolution." A typical target was'

Honduras, the poorest and most primitive country in

Central America. CIA's reaction was also typical

of the "nation-building" and "institution-building"

approach to countering subversion.

When Castro began his propaganda campaign in

* Two years later Congress authorized the Department

of State to reimburse its employees the depreciated

value of furnishings left in Cuba. Payments fell

far short of replacement

costs.

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of assets commencing with a close per-

sonal relationship

between the

station

chief and the President of Mexico, high-

sets and a broad scale of covert action

capabilities.

Within a week of the inspector's visit

Frederick W. Cole was relieved as chief of station

in La Paz, partly because of comments made by Ambas-

sador Ben Stephansky, a former labor attache who had

not worked closely with CIA. Lyle T. Shannon, COS,

Panama City, left WH Division (perhaps coincidentally)

a few months after the Inspector General had described

him thus:

The chief of station is a GS-18 who

has served

in many different posts in

the Agency. He has been in Panama for

about five years.

A wide gap in human

relations exists

between the chief of

station and his staff.

He is coldly

aloof and is reputed to brook no dif-

ference of opinion even on questions

of operational procedures.

He is a

hard-driving administrator. His tal-

ents along this line are granted even

by the Ambassador, who bluntly dis-

credits his ability as an intelligence

officer. 275/

Although the separate Task Force W (TFW) was

not officially established until 8 March 1962, the

planning and execution of the Bay of Pigs operation

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were for all practical purposes conducted indepen-

dently of WH Division and therefore are not covered

in this history. There

was an

informal but under-

stood shortcut in the chain of command; basic deci-

sions were made at the DDP, DCI, or Presidential

level. Although some of the key personnel were de-

tailed from WH Division, the Cuban Headquarters unit

was in another building and no one pretended that

J. C. King was running the show.

Jacob D. Esterline, a veteran WH Division

officer who later became deputy chief of the divi-

sion, was chief of the Cuban unit during the buildup

and invasion attempt, and took his orders from the

DDP. When the

Cuban unit was made officially autono-

mous

as TFW and later as the Special Affairs Staff

(SAS), it was headed first by William K. Harvey and

then by Desmond FitzGerald, Bruce B. Cheever and

John L. Hart, none of whom had previous service in

WH Division. It was not until 1965 that the Cuban

unit really lost its autonomy and again came firmly

under WH Division.

Actual expenditures in FY 1961 illustrate

the disparity between Cuban operations and the

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parent WH Division. In that year total obligations

for Cuban operations were §41,498,743%, or almost

four times the $11,003,991) spent in the rest of

Latin America. Except for Cuba 1961 was a repre-

sentative year, and these were the obligations for

regular stations throughout the hemisphere:

Brazil

Mexico

Venezuela

Argentina

Chile

Panama

Uruguay

Guatemala

Peru

Ecuador

Bolivia

$1,498,101

1;384,505

922,424

802,302

646,768

579,310

521,082

418,778

380,422

336,367

303,210

Colombia

Dominican Rep.

Costa Rica

El Salvador

Honduras

Nicaragua

Haiti

Paraguay

West Indies

Puerto Rico

$301,389

261,148

231,351

222,037

103,820

92,088

77,675

54,606

41,864

24,37,7

276/

Until the nearly 1,200 prisoners taken at the

Bay of Pigs could be ransomed with shipments of phar-

maceuticals, CIA regularly supported their dependents

in the United States. In the opinion of the General

Counsel, if a dependent had sued, courts would probably

have found that Cuban Brigade members were entitled to

the benefits of the Federal Employees' Compensation

Act. Thus by mid-1962 CIA was disbursing $311,500

per month to the dependents, plus bonuses and medical

care for invaders who managed to return. These ex-

penses, however, were paid from special funds outside

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the WH Division budget.

Probably Castro's attempt to export his revo-

lution reached its peak in 1962. The first Castro-

inspired guerrilla action in Latin America occurred

in March of that year, when Indians in the interior

of Peru attacked the towns of Huampani and Satipo.

A Lima Station penetration agent identified their

leader as Cuban-trained and reported that radios and

weapons had been smuggled in from Cuba to start the

278/

attack.

At year's end the US Government planned to

assemble for the Organization of American States a

white paper on Cuban subversion in Latin America,

and in February 1963 WH Division chiefs of station

met in Panama to discuss their contributions with.

the DCI. From this meeting came a picture of Castro's

campaign of subversion.

Argentina reported that left-wing Peronists

were an attractive target for Cuba; police had cap-

tured a group of terrorists organized and directed

by John William Cooke, an ex-Peronist then in Cuba.

Bolivia knew of 217 activists trained in Cuba within

nine months and was looking forward to debriefing

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Everyone breathed easier, and the Chief, WH

Division, described the operation as "one of the

most tightly held of our Cuban activities.". Two

years later the hold was not so tight, for on 26 March

1965 the New York Times front-paged a reasonably com-

plete and accurate account of the great sugar-sabotage

operation under the headline:

PRESIDENT KENNEDY BALKED

CIA PLOT ON RUSSIAN SUGAR

Press services picked up the story. United

Press International doffed its cap to "enterprising

U.S. agents," but added that "White House interven-

tion foiled the Central Intelligence Agency's Carib-

283/

bean melodrama." CIA, as usual, had no comment.

For across-the-board coverage of Cuba in

the early 1960's the Mexico City Station was tops.

Reporting on the Cuban Embassy, the COS said in Feb-

ruary 1963:

a any ote the claphone competely,

and within a few hours of the conversa-

tions have resumes of all. the phone calls.

We cover their trash, and this has been

found to be useful.

And included in the

usefulness was the

discovery of a man who

was doublecrossing us, who we thought was

a good penetration of the Embassy.

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CIA had seven different microphones in the

Cuban Embassy, one hidden in a leg of the coffee

table in the Ambassador's office. Like most audio

operations, this one produced a lot of chaff, but

it also yielded bits of operational information

showing connections between the Embassy and local

Communists and students. At the airport the station

was getting photographs of all travellers to Cuba,

plus about 300 photos per day of their passports

and documents.

24

Included in the take from the Cuban Embassy

were the serial numbers of weapons bought by Commu-

nists for smuggling into Guatemala, plus the names

and positions of the sellers. Complicating the ex-.

Ploitation of this information was the fact that the

weapons had been sold by Mexican officials, and while

the station wanted to stop the smuggling and appre-

hend the Communist smugglers it had no desire to

upset sensitive relations with the Mexican Government.

8 Iwo high-level officers of the Cuban Embassy,

one of them the cultural attache, were recruited CIA

penetrations. The station had sent three agents into

Cuba and was getting reports from them by secret

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writing. Meanwhile it was

servicing 17 accommoda-

tion addresses for Headquarters and Miami.

In spite of all this, there was little exploi-

table evidence that Cuba was using Mexico

as a base

for subversion in the rest of Latin America.

Mexico

was the only Latin American nation to maintain diplo-

matic relations. with Cuba in the face of an OAS reso-

lution intended to isolate the island. Anxious to

retain this bridge to the Western Hemisphere, Castro

had ordered his Embassy to do nothing which might be

284/

considered offensive by the Mexican Government.

No such restraint was applied to Venezuela,

where Castro-supported terrorism was rampant. On

2 November 1963, on a tip from a campesino, the

Servicio de Inteligencia de las Fuerzas Armadas

(SIFA) found a cache of more than three tons of

Cuban arms on a beach on the Paraguana Peninsula

in northwest Venezuela. CIA learned about it promptly

through liaison.

Jonathan G. Hanke, a Caracas case officer,

brought sample weapons to Washington, where CIA was

able to raise the serial numbers and Cuban Army in-

signia which had been ground off. Richard Helms,

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blocs in the country: Barrientos, supported by the

Campes'inos; General Alfredo Ovando Candia, supported

by the army; and the Communists and leftists, sup-

ported by tough mine and factory workers. To have

Barrientos elected, CIA first had to promote a

credible election by underwriting the campaigns of

both the selected winner and his token opposition

at the polls.

The real question was whether elections would

be held at all. In 18 months the La Paz Station

spent $585,000, first to persuade the armed forces

to clamp down on the leftists, then to persuade

Barrientos to run, then to convince Ovando he should

not interfere, and finally to promote enough politi-

cal opposition to make the election plausible. In

a genuine tour de force, COS Lawrence M. Sternfield

produced what OAS observers called a democratic and

honest election--and got the results from the elec-

toral tribunal four days before the election.

On 7 April 1964 President Lyndon B. Johnson

presided

at a White House meeting which laid down

general guidelines for CIA action against Cuba.

Others at the meeting included Secretary of State

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Dean Rusk, Secretary of Defense Robert S. McNamara,

General Maxwell Taylor of the Joint Chiefs of Staff,

Presidential Advisor McGeorge Bundy, DCI John A.

McCone, DDP Richard Helms and FitzGerald. There was

no question about charging CIA with the following

types of activity:

1. Collection of intelligence.

2. Covert propaganda to encourage

low-risk forms of active and passive

resistance.

3. Cooperation with other agencies

in economic denial.

4. Attempts to identify and estab

lish contact with potential dissident

elements inside Cuba.

5. Indirect economic sabotage.

There was sharp disagreement, however, over

whether CIA should continue infiltrating sabotage

agents into Cuba. McNamara, Taylor and McCone favored

more sabotage raids, but Rusk and Bundy feared that

-

CIA raids might undermine the US "clean hands" pos-

ture in the OAS or give the Soviets an excuse for

delaying turnover of their surface-to-air missile

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(SAM) sites to the Cubans.

Finally Rusk recommended that CIA's raiding

assets be kept in being but not actually used--at

least until the OAS and SAM sites problems could be

clarified. The President accepted this recommenda-

tion. Although CIA did try to keep its sabotage

agents ready, the White House decision spelled the

end of the Agency's sabotage (though not support and

306/

intelligence-collecting) infiltrations of Cuba.

Agency-sponsored radio propaganda aimed at

Cuba reached its peak in early 1965 with an actual

expenditure of about $1,500,000 and expansion still

planned. The semi-notional Cuban Freedom Committee

served as cover for Radio Free Cuba, which broad-

cast a total of 77 hours weekly from transmitters

in Miami, Key West, and New. Orleans.

Started in 1961, the Cuban Freedom Committee

retained a public relations firm and spent $7,000

annually to establish its cover by soliciting bona

fide public contributions. In its first year these

totalled $5,000, but by 1965 public support had dwin-

died to $200. One of the difficulties was that any

widespread US appeal for funds for Radio Free Cuba

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would perforce have to attack Castro, and might there-

fore be considered domestic propaganda exceeding CIA's

charter.

Outside the committee, CIA operated a trans-

mitter calling itself Radio Americas and broad-

casting from Swan Island, and bought time for anti-

Cuban broadcasts from three commercial stations.

Programming on these four stations totalled 119

hours weekly in addition to the 77 on Radio Free

307/

Cuba.

Swan Island, roughly a mile and a half long

and three-quarters of a mile wide, lies in the Carib-

bean 125 miles north of the Honduran coast. Both the

United States and Honduras claimed sovereignty over the

island in the 1960's. The US Weather Bureau had manned

a weather station there since 1949, and CIA first set

up a covert transmitter in 1954 to support its propa-

ganda against the Arbenz regime in Guatemala.*

Apart from the question of its real impact in

Cuba and the psychological problems of a staff living

* Under a 1971 agreement the US relinquished its claim

to sovereignty but retained the right to operate

weather station.

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in almost total isolation, the Swan Island transmitter

raised a nightmare of cover complications. Operating

as Radio Americas, it was supposedly under cover of

the Vanguard Service Corporation, an Agency proprie-

tary which offered no services, and the Gibraltar

Steamship Corporation, another proprietary which

operated no steamships. A Boston millionaire who

claimed to own the island collected rent from the

Vanguard Corporation, which could not afford to argue,

but not from the Weather Bureau, which disputed his

claim. Vanguard contracted with Coastal Air of

Miami for one light-aircraft supply flight a week

and with the Logistics Service Corporation of Phila-

delphia, a Philco subsidiary, to maintain the island

facilities and transmitting equipment. All of this

enabled CIA to play tapes and broadcast the commen-

taries of the three Cuban annöuncers stationed on

the island, but it did not prevent Radio Habana

from pinpointing the transmitter and calling it a

308/

CIA propaganda mechanism.

Nevertheless in early 1965 Congressman Roman.

C. Pucinski (D-Il1.), a member of the Cuban Freedom

Committee executive board, was pressing CIA to saturate

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the Cuban airwaves and smuggle or airdrop transistor

radios into Cuba to expand the audience. Inside the

Agency FitzGerald politely rejected the congressional

advice but pointed out that WH Division already was

planning the University of the Air, * which would

broadcast college-level courses to divide the loyalty

309/

of Cuban students.

Another congressional critic was Senator

Eugene McCarthy (D-Minn.), perennial sponsor of bills

to create a CIA Watchdog Committee and author of a

January 1964 Saturday Evening Post article entitled

"The CIA Is Getting Out Of Hand." In April 1965

FitzGerald and Seymour Bolten of WH Division met

with the Senator to discuss the Christian Democratic

social and political programs of the Catholic Church

in Latin America. After this meeting McCarthy, a

devout Catholic, considerably tempered his assess-

310/

ment of the Agency.

US relations with Cuba entered a new phase

after the Cuban missile crisis of 1962 when Agency

* This project was abandoned following press expo-

sure of CIA's relations with American universities

and student groups.

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facilities provided the Kennedy administration with

positive information on the buildup of Soviet mis-

sile capability on the island. This episode is docu-

mented elsewhere and is outside the scope of this

present paper.

One of FitzGerald's major successes against

Cuba was in the field of economic warfare--called

the MHVIPER program in CIA. After a hurricane

ripped through the island in 1964, Castro's econo-

mists and publicists began a campaign to persuade

free-world sugar brokers that the Cuban sugar crop

had been badly damaged and

exports would be low.

The object, of course, was to drive up sugar prices

on the world market, on which Castro depended for

hard currency to finance imports.

At first the campaign worked and sugar prices

did skyrocket. But FitzGerald was not convinced,

and sent 'Ñatalie Scott' to London to study economic

reports from the British Embassy in Havana. Partly

on the basis of her research, the US. Government's

sugar-crop forecasters concluded that despite the

hurricane Cuba would harvest more sugar than ever.

FitzGerald arranged to have a Department of

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State official leak this general conclusion to the

New York Times. Sugar prices dipped, but rallied

when Castro indignantly denied the Times story.

The Department then officially announced the US Govern-

ment estimate that there would be no shortage of

Cuban sugar. As it turned out, the US estimate was

right.

After the official announcement world sugar

prices dropped several cents per pound, and this

time they stayed down. At a time when fluctuations

of one cent a pound meant millions of dollars to

the Cuban economy, publication of the essentially

correct estimate upset Castro's attempts to manipu-

311/

late the market.

Late in the summer of 1964. the DDI told Fitz-

Gerald that the Department of State was inquiring

informally about the possibility of setting up a

CIA channel for plausibly deniable clandestine con-

tacts with Cuba. FitzGerald replied:

It seems to me that the establishment

of a continuous two-way conversation with

Fidel Castro at a time when we have noth-

ing to convey to him would be a serious

mistake..

It may be that Secretary Rusk

feels that the present establishment of

conversations with Fidel Castro should

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be considered in order to make sure that

we will have the ability to speak to him

when or if the time

comes. On this score

I do not feel there is any reason for worry.

There are a number of ways in which we can

communicate to Fidel Castro virtually at a

moment's notice. 312/

Part of CIA's economic warfare against Cuba

involved an elaborate scheme to supply tampered pet-

roleum additives through an Agency mechanism in An-

twerp. This was planned as subtle sabotage; after

being mixed with Soviet petroleum the additives would

surely but imperceptibly incapacitate Cuban machinery.

Unfortunately, the doctored additives proved anything

but subtle and the Cubans promptly discovered they

313/

were unusable.

Also a failure was an attempt by Francis S.

Sherry and William C. Boner, Jr., of the Cuban Oper-

ations Group (WH/COG) to persuade Detroit automobile

executives to produce spare parts deliberately de-

signed to break down. Sherry and Boner went to De-

- troit in early March 1965 and explained to manufac-

turing vice presidents that the defective parts

could be sent to Cuba through third country suppliers.

But the automobile executives refused to cooperate;

they feared that their companies' reputations would

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Do ruined it the doctosed parts eccidarally or in-ll !'

to the wrong channels.

In the wake of the ill-fated Bay of Pigs in-

vasion of 1961 and the active years of 1962-1964,

anti-Castro operations began to diminish in 1965.

Operations continued but at a slower pace. John L.

Hart had the title of Deputy Chief, WH Division, for

Cuba (DCWHD/C), and operated a large base in Miami

with virtual autonomy. A chain of safehouses,

training sites and boat-moorages stretched through

the Florida keys to Key West. From these CIA

launched maritime operations which regularly placed

and retrieved agents from the Cuban coast, but whose

intelligence product often did not justify the

effort.

Meanwhile CIA ran a dwindling number of

on-island intelligence agents, including some

handled in cooperation with the US Navy base at

Guantanamo, where hundreds of. Cubans still worked

by day and returned to Castroland at night. As

the Cuban General Directorate of Intelligence (DGI)

improved and expanded under Soviet tutelage, CIA

agent networks were rolled up and even singleton

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agents dropped out of contact. Typical was Radio

Habana's 12 May 1965 announcement that "31 counter-

revolutionaries, members of a CIA espionage network"

had been arrested. Of the 14 actually named in the

broadcast, WH Division identified six who had worked

with Juan Bautista Perez Luis (AMTAUP-10), chief

gardener at the naval base and principal agent for

CIA. Although he had been debriefed in Miami in Jan-.

uary, Perez' location and status were not known in

316/

May.

Probably the most successful political oper-

ation in WH Division's history was the Chilean elec-

tion of 4 September 1964 in which Eduardo Frei of

the Christian Democratic Party decisively defeated

Salvador Allende, Marxist leader of a Communist-

dominated coalition.* Drawing on covert mechanisms

established by Santiago Station years earlier, plus

new procedures and assets developed for the election,

the campaign to assure Frei's victory cost CIA about

$2,600,000. Its success kept Allende at bay until

1970, when no such intervention by CIA was authorized.

* For a full description, see "The Chilean Election

Operation of 1964, a Case History, 1961-1964."

CSHP-1.

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that FitzGerald had won the President's confidence

in several meetings. Freeman, who had been in Mexico

only a few months, apparently simmered down after his

318/

talk with the assistant secretary.

The Mexico City Station devoted a major part

of its time to running or supporting operations

against Cuba; 47 percent of its cable traffic con-

cerned Cuban operations. Mexico was the only Latin

American country maintaining diplomatic relations

with Castro and had the only direct air link to Ha-

vana. WH Division assigned top priority to recruit-

ing agents in place in Cuba, and Mexico City Station

not only ran its own operations but supported the

tentative plans of other stations.

The variety and volume of technical operations

created a heavy workload managing safehouses, listen-

ing posts, and vehicles. - For photography alone the

station had six base houses commanding the entrances

to target embassies, two mobile photosurveillance

trucks, and three agents trained in photosurveillance

on foot.. It was such projects that provided informa-

tion on the visits of Lee Harvey Oswald, President

Kennedy's assassin, to the Cuban and Soviet Embassies

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in Mexico.

CIA's clandestine information on Oswald, in-

cluding a photograph showing him in front of the

Soviet Embassy, was turned over to the FBI, which

promised to safeguard Agency sources and methods.

Instead, the Bureau showed the photograph to Oswald's

mother in Dallas and told her it was a CIA photo.

The mother gave the press a garbled story about the

photo, the FBI gave the press the correct story,

and eventually CIA's clandestine information became

part of the voluminous Warren Commission report on

the Kennedy assassination. In the process Mexico

City Station had to abandon its photosurveillance

320/

base houses, which had been thoroughly blown.

In the early 1960's WH Division built an ex-

tensive political polling mechanism around the Insti-

tute for the Comparative Study of Political Systems,

a proprietary whose project cryptonym was JMTUBA.

From 1962 to 1966 the institute conducted 20 polls

in nine Latin American countries. Their cost cannot

be computed because many of the expenses were charged

to other projects.

In FY 1965, for example, political polls in

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8

---