Jump to content
The Education Forum

Guillermo Hernández Cartaya


John Simkin
 Share

Recommended Posts

Has anyone got anything on Guillermo Hernández Cartaya?

I know he was born in Cuba in 1932. He became a banker who supported the government of Fulgencio Batista. An opponent of Fidel Castro he fled to the United States and took part in the Bay of Pigs operation in 1961. He remained in prison for three years and according to one source the CIA paid $50,000 to get him out of Cuba.

In 1971 Cartaya established the World Finance Corporation. In 1976 a group of anti-Castro Cubans that included Frank Castro, Luis Posada, Orlando Bosch, Armando Lopez Estrada and Guillermo Novo helped to establish Coordination of United Revolutionary Organizations (CORU). CORU was partly financed by Cartaya.

One Miami police veteran told the authors of Assassination on Embassy Row (1980): "The Cubans held the CORU meeting at the request of the CIA. The Cuban groups... were running amok in the mid-1970s, and the United States had lost control of them. So the United States backed the meeting to get them all going in the same direction again, under United States control." It has been pointed out that George H. W. Bush was director of the CIA when this meeting took place.

Frank Castro told the Miami Herald why he had helped establish CORU: "I believe that the United States has betrayed freedom fighters around the world. They trained us to fight, brainwashed us how to fight and now they put Cuban exiles in jail for what they had been taught to do in the early years."

In October, 1976, Cubana Flight 455 exploded in midair, killing all 73 people aboard. This included all 24 young athletes on Cuba's gold-medal fencing team. Police in Trinidad arrested two Venezuelans, Herman Ricardo and Freddy Lugo. Ricardo worked for Posada's security agency in Venezuela and admitted that he and Lugo had planted two bombs on the plane. Ricardo claimed the bombing had been organized by Luis Posada and Orlando Bosch. When Posada was arrested he was found with a map of Washington showing the daily route of to work of Orlando Letelier, the former Chilean Foreign Minister, who had been assassinated on 21st September, 1976. Ricardo Morales Navarrete later admitted that he was part of this bomb plot.

CORU took credit for fifty bombings in Miami, New York, Venezuela, Panama, Mexico and Argentina in the first ten months after it was established. In a CBS interview on 10th June, 1977, Armando Lopez Estrada, a member of CORU, claimed: "We use the tactics that we learned from the CIA... We were trained to set off a bomb, we were trained to kill."

In 1977 the World Finance Corporation collapsed. He was later charged with money laundering, drugs & arms trafficking and embezzlement. The federal prosecutor told Pete Brewton that he had been approached by a CIA officer who explained that "Cartaya had done a bunch of things that the government was indebted to him for, and he asked me to drop the charges against him." As a result Cartaya was only convicted of tax evasion. After serving one year in prison, Cartya was released on 6th June, 1987.

Link to comment
Share on other sites

You can find what I have on Guillermo Hernández Cartaya here:

http://www.spartacus.schoolnet.co.uk/JFKcartaya.htm

Here are a couple of interesting passages on Cartaya:

(1) Pete Brewton, The Mafia, CIA and George Bush (1992)

Before the so-called "deregulation" of the savings and loan industry was even a gleam in Ronald Reagan's eye, there was another savings and loan in Texas besides Surety that was giving regulators and prosecutors problems in the late 1970s. This institution was Jefferson Savings and Loan in McAllen, way down south in the Rio Grande Valley of Texas, the land of political machines, political bosses, political patronage and the patron.

Jefferson S&L was chartered in 1956 with six directors, including future U.S. senator Lloyd M. Bentsen, Jr., his brother, Donald, and his father, Lloyd M. Bentsen Sr., el patron. Another director was Vannie Cook, who would one day be a business partner of reputed mob associate and Surety S&L looter Raymond Novelli. Lloyd Jr. stepped down as a director the next year, but continued as a large stockholder with 15.5 percent of the shares. Donald also held 15.5 percent of the shares, while Lloyd Sr. was the biggest shareholder, with 18 percent of the stock.

By 1974, two new names had appeared on Jefferson's board of directors. They were Guillermo Hernandez-Cartaya and his father, Marcelo Hernandez. Hernandez-Cartaya is a Cuban exile who fought in the abortive CIA-backed Bay of Pigs invasion, was captured and then was ransomed by the U.S. government. He went to work for Citizens & Southern Bank in Atlanta and then in 1970 formed World Finance Corporation in Miami.

By 1977, Hernandez-Cartaya and World Finance were the focus of intense and extensive state and federal investigations into drug smuggling, money laundering, gun running, political corruption and terrorist activities. But the case fizzled out in 1978 and only resulted in one income-tax indictment of Hernandez-Cartaya, in 1981. The CIA was partly, if not totally, responsible for pulling the plug on the investigation.

At least 12 World Finance employees had past associations with the CIA. When Assistant U.S. Attorney R. Jerome Sanford, who resigned in frustration and disgust over the failed investigation, tried to obtain from the FBI its CIA files on World Finance, he was denied access on the grounds of national security. But the CIA did acknowledge that it had 24 documents relating to World Finance that were generated in 1976 and 1977.

One of the six founding directors and stockholders of World Finance, along with Hernandez-Cartaya, was Washington lawyer Walter Sterling Surrey, described by journalist John Cummings as "a charter member of the old boy network of U.S. intelligence." Surrey had served in the OSS (the CIA's predecessor) in World War II, and after the war went to work for the State Department as head of the Division of Economic Security Controls. He resigned his position with World Finance in 1976 and has denied any knowledge of intelligence or illegal activities at the company.

(2) Peter Dale Scott & Jonathan Marshall, Cocaine Politics (1991)

Frank Castro and Ricardo Morales were linked by terrorism as well as drugs; their violent records stretched back into the 1960s. But their anticommunist efforts reached a climax in 1976, when Frank Castro joined several other Cuban exile leaders in founding CORU, an umbrella organization for terrorism against Cuban installations and against the persons and property of countries deemed overly sympathetic to Fidel Castro's regime. Morales gave sanctuary to some CORU agents in Venezuela, where he had become a high-ranking officer in the intelligence service, DISIP.

"The story of CORU is true," one of its leading organizers told an interviewer in 1977. "There was a meeting in the Bonao mountains [of the Dominican Republic] of 20 men representing all different activist organizations. It was a meeting of all the military and political directors with revolutionary implications. It was a great meeting. Everything was planned there. I told them that we couldn't just keep bombing an embassy here and a police station there. We had to start taking more serious actions ." The organization took credit for the October 1976 explosion of a Cuban passenger jet and fifty other bombings in Miami, New York, Venezuela, Panama, Mexico, and Argentina in the first ten months of its existence. In a CBS News interview, one member explained, "We use the tactics that we learned from the CIA because we-we were trained to do everything. We are trained to set off a bomb, we were trained to kill ... we were trained to do everything." Five of CORU's founders, including Frank Castro, later joined the Contras.

Financing for CORU operations allegedly came from WFC, a Florida based financial conglomerate and drug-trafficking front closely associated with the Restoy-Escandar-Trafficante organization exposed in Operation Eagle. An unpublished congressional staff study of the company found that it encompassed "a large body of criminal activity, including aspects of political corruption, gun running, as well as narcotics trafficking on an international level." The WFC empire was led by CIA-trained Bay of Pigs veteran Guillermo Hernandez Cartaya, whom federal authorities suspected of working with the Contra backer and former CIA officer Gustavo Villoldo. The head of the Dade County investigation of WFC later said he found that one company subsidiary was "nothing but a CIA front."

Link to comment
Share on other sites

Robert Parry, Lost History (1999)

One of those exiles - who would play a part in Molina's life story - was Guillermo Hernandez Cartaya. Along with hundreds of other Cubans, Cartaya traveled to Central America for training in Brigade 2506, the core assault force for the invasion.

On April 14, 1961, under CIA direction, the 1,400-man brigade landed at the Bay of Pigs. Quickly, however, the Cuban army pinned down the invaders and captured 1,189 of them, including Cartaya. Months later, the U.S. government ransomed Cartaya and the others with $53 million in medicine, tractors and other equipment.

But the Bay of Pigs soldiers did not simply fade away. Many stayed with the CIA and carried the anti-communist crusade to far flung corners of the globe. Some fought with special counterinsurgency teams in Vietnam. Others signed up with intelligence agencies throughout South America.

By the 1970s, Cartaya was hitting it big in politics and banking, too. According to Jonathan Kwitny's Endless Enemies, Cartaya parlayed his anti-Castro credentials into powerful relationships, even joining Nelson Rockefeller on hunting and fishing trips. Then, in the mid-1970s, Cartaya launched his most ambitious endeavor, an international financial holding company called the World Finance Corp., later renamed WFC Corp. The firm's maze of banks reached to the United Arab Emirates, Switzerland, London, the Caribbean, Miami, Colombia and Panama.

To head the crucial Panama bank, known as UniBank, Cartaya recruited another Cuban exile whom Cartaya had met during travels to Atlanta. That Cuban exile was John Molina. Taking up Cartaya on his job offer, Molina moved to Panama City to run UniBank. With Molina at the helm, UniBank began steering Cartaya's money from all over the world into untraceable accounts. Molina also oversaw Cartaya's extensive financial dealings in Colombia and other South American countries. Millions of dollars were going in and out of major Colombian agricultural projects.

But Cartaya's banking empire encountered troubles in South Florida. Responding to a routine call, Dade County police found large quantities of marijuana residue in a Miami dumpster. Along with the marijuana residue, police discovered business records of corporations connected to WFC. As the investigation developed, authorities uncovered other corporate links between WFC and Aerocondor, a South American airline that had been caught smuggling drugs. Police also discovered that WFC agents had contacts with the Mafia drug syndicate of Santo Trafficante, Jr., whose lucrative narcotics operations had dominated Cuba prior to Castro's revolution.

Other leads went off in surprising directions. The anti-Castro Cartaya, it seemed, had worked with a suspected Cuban government spy. Even more perplexing, WFC had received a$2 million loan from the Narodny Bank, a KGB-connected Soviet financial institution that was responsible for scrounging up hard currency for Moscow. Police came to suspect that WFC was an intelligence front. Federal investigators found that about a dozen WFC officials had past associations with the CIA.

"It was drugs, it was money laundering, it was everything," South Florida detective James Rider told me. "I know the CIA was in there somewhere."

The investigators also came to know the name of John Molina. He was not regarded as a powerful player though. He was just one of Cartaya's financial lieutenants carrying out orders. But the authorities recognized that UniBank was an important cog in Cartaya's money-laundering machine.

I wonder if this is the same Molina that appeared in this CIA document.

CIA, Secret Intelligence Report, Activities of Cuban Exile Leader Orlando Bosch During his Stay in Venezuela (14th October, 1976)

TO: Lt. M. BROMLEY, Supervisor

FROM: Detective A. TARABOCHIA

DATE: January 11, 1962

SUBJECT: Assist other Agency - Alleged plot to assassinate the President of the United States

At approximately 6:30 P.M., January 10, 1962, Detective A. L. TARABOCHIA was contacted at his residence by Secret Service Agent ERNEST ARAGON in reference to alleged plot to assassinate the President of the United States.

Agent ARAGON revealed that, according to the information received by his agency, RAFAEL ANSELMO RODRIGUEZ MOLINS, a naturalized U.S. citizen of Dominican ancestry, was en route to Miami from Chicago to attempt to assassinate President KENNEDY next time he arrives in West Palm Beach. The subject also known as RAFAEL MOLINA is a W/M, RODRIGUEZ is known to disguise himself as a priest and carries a weapon concealed in a camera case. Since the subject has a badly infected foot, there is a possibility that he walks with a limp. Agent ARAGON added that the subject was to contact a Cuban male living in the Miami area before proceeding to West Palm Beach. The Cuban, ARMANDO PABLO LOPEZ ESTRADA QUINTANA, was a member of the forces that attempted the invasion of Cuba on April 17, 1961. LOPEZ is a W/M, DOB 3/15/39, 6ft, 200 lbs., last known address New York City, NY. LOPEZ is married and his wife's name is MERCEDES LOPEZ.

On January 11, 1962, the writer contacted a number of Cubans in position to furnish information concerning the suspects. As soon as this information is obtained it will be forwarded in a report to follow.

The investigation is continuing.

Link to comment
Share on other sites

On a related note, the following comes from:

http://cannonfire.blogspot.com/2006/09/tal...and-spooks.html

A tale of drugs and spooks

I had intended to annoy you with more AA77 skepticism today, but a reader has directed my attention toward a more pressing mystery -- the story of a man who didn't board a jet.

John "Sparky" McLaughlin tried to take his family on vacation last July, only to discover that that an unknown agency had placed him on the terrorist "no-fly" list. This came as quite a surprise to McLaughlin: He's a cop. In fact, he once headed an effective anti-narcotics unit in Philadelphia.

Too effective. His 90s-era investigations of a drug ring run by citizens of the Dominican Republic brought him into conflict with no less a body than the CIA. His work was disparaged, smeared, and shut down. He fought for years to counter the allegations, eventually winning his day in court, along with a $1.5 million dollar judgment (now on appeal). Although his name was cleared, its appearance on a "no-fly" list suggests that "anti-terrorist" measures are being used to persecute a whistleblower.

All the evidence indicates that McLaughlin is a good cop who has made some powerful enemies. To get the full story, check out the lengthy investigations by the Philadelphia City Paper, here and here, as well as the terrific follow-up piece by Bill Conroy over at NarcoNews. I suggest printing out every page and savoring the details over lunch. You won't find a more fascinating or frustrating true crime tale.

The gist:

A decade ago, McLaughlin and three other agents of the Philadelphia Bureau of Narcotics Investigations and Drug Control (BNI) had targeted a coke and heroin ring run out of the Dominican Republic -- a ring which used a fleet of tricked-out Oldsmobile to run "supplies" into Philadelphia, Boston and New York. The four agents -- later dubbed "the Bastard Squad" -- arrested a crack dealer whose brother was the chief stateside fund-raiser for to Revolutionary Dominican Party (PRD), then poised to gain power in the home country. Connections to this party turned up with unnerving regularity.

An informant revealed that the PRD hoped to use drug money to fund the campaign of PRD presidential candidate Jose Pena Gomez. The party intended to buy votes -- literally purchase them outright -- from members of the massive expatriate community living in the United States. This scenario was confirmed when a "wired" informant met with PRD officials.

The Bastard Squad ran this data by their intelligence advisor, a former CIA man named Wilson Prichett. Although some might want to place quotation markes around the word "former," Prichett seems to have acted in good faith. (The writers of the original City Paper article received remarkable access to CIA agent names and confidential memos.)

Prichett fed the Squad's findings to CIA, who passed the data to station chief in Santo Domingo. In the Dominican Republic, rumors connecting Pena Gomez to the drug trade played a quiet role in the election. Even so, the Agency clearly favored Jose Pena Gomez in the upcoming elections.

(As an intelligence-gathering agency, CIA is not supposed to favor anyone -- in theory. Actual practice is another story, as any good CIA history will confirm.)

The CIA made a suspiously vigorous effort to discover the identities of the Squad's informants. McLaughlin infuriated the powers-that-be when he refused to dilvulge the information.

The Drug Enforcement Agency, acting in conjunction with McLaughlin's crew, planned to move against Pena Gomez during a fundraising trip the United States. But the DEA changed its mind at the last minute, allowing the candidate to go home with $500,000 in drug profits. (Eventually, he lost a close election, and died not long thereafter.)

That's when the bomb dropped on the Bastard Squad.

The U.S. Attorney's Office announced that they would no longer accept any cases originating from McLaghlin and his associates.

Soon therafter, State District Attorney Tom Corbett made the same announcement.

These decisions effectively shut down the unit. All of their ongoing investigations had to cease. Perpetrators walked -- even some who had pled guilty.

Rumor linked the "Bastard Squad" to various corrupt practices, such as fabricating evidence and conducting searches without probable cause. One of Corbett's top men investigated these rumors and found them baseless; Corbett squelched the exonerative report and continued to treat McLaughlin as a pariah.

The squad members became convinced that their problems stemmed from their refusal to expose the brave informants who had fingered the PRD in the heroin and coke trade.

The pariah treatment was unprecedented. When undercover cops are suspected of going bad, the usual practice is to keep them under surveillance in order to catch them red-handed.

Members of the squad went to court to clear their names. From a 2003 AP account:

The agents filed a civil rights lawsuit in 1997, saying they had "become the targets of vicious unfounded attacks on their credibility and careers by the federal government," with the "marionetted support" of the Philadelphia DA's office and [the Pennsylvania Attorney General’s Office].

The lawsuit also claimed that Pena Gomez's Dominican Revolutionary Party "was, and is, protected and sanctioned, unlawfully, by agencies of the United States government, to include the CIA and the State Department, enabling the Dominicans to distribute illegal drugs at will to the black and Hispanic populations of the Eastern Seaboard."

The 1997 lawsuit was dismissed, but a subsequent suit resulted in a $1.5 million judgment in favor of McLaughlin and his men.

I should mention here that the PRD is considered moderately left-of-center. (So was Mexico's PRI, despite its long and close association with the American power establishment.) The party's color is white, which cynics might interpret as a fitting tribute to the product flooding American streets.

The questions that comes to my mind are these: Is McLaughlin correct in his claim that a faction at CIA protected the Dominican drug trade? If so, who was in that faction?

No outsider can answer that question with any authority. But perhaps we can gather a few hints if we attempt to trace some of the relevant history -- beginning with CIA head Porter Goss:

Rep. Porter J. Goss has disclosed precious few details of his CIA employment from roughly 1960 to 1971,” reported a profile in the Associated Press. Reuters called him a “mystery man,” and said he had been “close-mouthed about his past.”

“He worked in Haiti, the Dominican Republic and Mexico -- tumultuous countries during that decade of the Cold War,” Reuters reported.

During a 2002 interview with The Washington Post, Goss joked that he performed photo interpretation and "small-boat handling," which led to "some very interesting moments in the Florida Straits."

One should never forget Goss' mysterious promotion of Kyle "Dusty" Foggo, who had a background in that part of the world. Foggo was, in turn, a long-time friend to the notorious Brent Wilkes, the prime mover in the Cunningham corruption scandal.

In a previous piece on Wilkes, I presented evidence suggesting that he has long had a relationship with the CIA. Wilkes had worked for the World Finance Corporation, a predecessor to BCCI. WFC, founded by anti-Castro Cuban Guillermo Hernandez-Cartaya, was, in the 1960s and 70s, the financial institution most favored by narcotics traffickers with CIA connections.

I hope the reader will forgive a lapse into self-quotation:

If, as I suspect, Wilkes joined forces with WFC in the mid-1970s, he may have played a role in the creation of a spin-off called the Dominican Mortgage Corporation, which shared the same address as WFC's Coral Gables HQ. This group heavily invested in Vegas -- casinos, real estate development, even a detective agency.

The "Dominican" part of the name now seems particularly resonant.

But why would the CIA take such a special interest in the PRD? The choice seems particularly bizarre when we recall that, back in the 1960s, the Johnson administration had damned PRD founder Juan Bosch as pro-communist -- even though Bosch had, in fact, banned communist movements in his nation.

In the 1980s, PRD leader Salvador Jorge Blanco proved to be spectacularly corrupt. Yet in this same period, the party seems to have forged strong links to American intelligence.

Another PRD leader, Hipólito Mejía, ran the Dominican Republic from 2000 to 2004. During his tenure, poverty increased and the massive Bainiter banking scandal (which tarred more than one party) was exposed.

Quirino Paulino, a former army captain in the Dominican Republic, has been accused of running much of the cocaine traffic between that nation and the United States. Paulino has made large contributions to all the major political parties in his country.

Note: "sparky178" -- presumably John McLaughlin -- has answered questions about his case in a dialogue preserved here.

Link to comment
Share on other sites

  • 3 years later...
Guest Tom Scully
http://news.google.com/archivesearch?q=%22...1&scoring=a

- New York Times - Dec 15, 1977

..Three American banks bought shares of about 8 percent each in Unibank, and two Latin American banks also became minority owners. The three American banks, are the Mercantile International Corporation,

http://news.google.com/archivesearch?q=*a+...&lnav=hist8

a subsidiary of the Mercantile Trust Company oP St. Louis, the First National Bank of Louisville,

http://news.google.com/newspapers?id=d7kmA...40291&hl=en

The Miami News Nov. 11, 1982

Coral Gables man charged in Texas

The former chairman of the defunct World Finance Corp. of Coral Gables, free on bond while his conviction in Miami last year on income tax evasion is being appealed, has run into more trouble in Texas. Guillermo Hernandez-Cartaya was indicted yesterday in Brownsville on charges of embezzling $500,000 from the McAllen-Jefferson Savings & Loan Association, an FBI spokesman said....Indicted along with Hernandez-Cartaya were his father, Marcelo Hernandez, another director, and Camilo Padreda, whose title was not given, said the FBI spokesman. The indictment accused the three of connspiring to embezzle the $500,000 with the intent to defraud the federally insured savings and loan...

http://motherjones.com/politics/1992/09/family-value

Family Value$ Tue Sep. 1, 1992

....Jeb and Armando Codina

Shortly after arriving in Miami, Jeb was hired by Cuban-American developer Armando Codina to work at his Miami development company as an agent leasing office space. A couple of years later, Jeb and Codina became business partners, and in 1985 they purchased an office building in a deal partly financed by a savings and loan that later failed.

The $4.56 million loan, from Broward Federal Savings in Sunrise, Florida, was granted in such a way that neither Codina's nor Bush's name appeared on the loan papers as the borrowers. A third man, J. Edward Houston, borrowed the $4.56 million from Broward and then re-lent it to the Bush partnership. When federal regulators closed Broward Savings in 1988, they found the loan, which had been secured by the Bush partnership, in default.

As Jeb's father was finishing his second term as vice-president and running for the presidency, federal regulators had two options: to get Jeb Bush and his partner to repay the loan, or to foreclose on their office building. But regulators came up with a third solution. After reappraising the building, regulators decided it wasn't worth as much as was owed for it. The regulators reduced the amount owed by Bush and his partner from $4.56 million to just $500,000. The pair paid that amount and were allowed to keep their office building. Taxpayers picked up the tab for the unpaid $4 million.

After the Broward Savings deal was revealed, Jeb described himself and his partner as "victims of circumstances."

Jeb and Camilo Padrera

By 1984, Jeb had been made chairman of the Dade County Republican party, and it was as Republican party chief that he nuzzled up to con man Camilo Padreda. Padreda was serving as Dade County GOP finance chairman and had raised money for the party from Miami's Cuban community. (He had also been a counterintelligence officer for deposed Cuban dictator Fulgencio Batista.) Padreda made his living as a developer who specialized in deals with the corrupt Department of Housing and Urban Development. In 1986, he hired Jeb as the leasing agent for a vacant commercial-office building, which Padreda had built with $1.4 million in federal loans—loans approved by HUD officials, oddly enough, even though they knew there was already a glut of vacant office space in Miami.

Like so many of those who would attach themselves to the Bush sons over the years, Padreda brought some hefty luggage with him. In 1982, four years before teaming up with Jeb, Padreda, along with another right-wing Cuban exile, Hernandez Cartaya, was indicted and accused of looting Jefferson Savings and Loan Association in McAllen, Texas. The federal indictment charged that the pair had embezzled over $500,000 from the thrift. (Cartaya was also charged with drug smuggling, money laundering, and gun running.) But the Jefferson Savings case would never go to trial.

Soon after the indictment, FBI officials got a call from someone at the CIA warning the agents that Cartaya was one of their own—a veteran of the failed Bay of Pigs invasion—according to a prosecutor who worked on the case. In short order, the charges against Padreda were dropped and the charges against Cartaya were reduced to a single count of tax evasion. (Assistant U.S. Attorney Jerome Sanford was furious and filed a demand with the CIA, under the Freedom of Information Act, for all documents relating to the agency's interference in his case. The CIA, citing national-security reasons, denied Sanford's request.)

In 1989, Houston Post reporter Pete Brewton wrote about Jefferson Savings and Cartaya in a series of stories alleging that CIA operatives and contractors had systematically misused at least twenty-six savings and loans during the 1980s as part of a secret program to fund illegal "off-the-shelf" covert operations, particularly those aiding the Nicaraguan contras. (CIA officials denied the charge, but admitted to the House intelligence Committee in 1990 that former CIA operatives had been working at four of the S&Ls named in Brewton's article. A CIA spokesman claimed that agency operatives had done nothing illegal.)

The Jefferson Savings affair occurred four years before Jeb Bush met Padreda, and it is possible he missed earlier reports. But he could hardly have passed over the next batch of stories involving Padreda's questionable practices, because they were spread across the front pages of Miami's papers in 1985, just months before the two teamed up. These stories, in Jeb's hometown paper, alleged that Padreda had improperly influenced a local politician—the Dade County manager, to be precise, who'd been made a secret partner when Padreda ran into trouble getting a parcel of land rezoned. The property was promptly rezoned, and the county official made a quick $127,000 profit when Padreda, in turn, "sold" it to an offshore Padreda partnership. That partnership was controlled from Panama by a fugitive Miami attorney, who had already been indicted for laundering drug money. (The official resigned, but Padreda was not charged in the case.)

Yet the 1985 scandal did not seem to lessen Jeb's enthusiasm for Camilo Padreda. Jeb enthusiastically accepted the task of finding tenants for Padreda's empty HUD-financed office building. Padreda, the government officials involved, and Jeb all refused to answer questions about the scandal. But of allegations that Padreda engaged in illegal behavior, there remains no doubt. In 1989, he pleaded guilty to charges that he defrauded HUD of millions of dollars during the 1980s.

Jeb and Miguel Recarey

With Miami awash in empty office space in 1986, it was no small event when bagged International Medical Centers as a key tenant for Padreda's HUD-financed building. IMC, which leased nearly all the space in Padreda's vacant building, was at the time one of the nation's fastest-growing health-maintenance organizations (HMO) and had become the largest recipient of federal Medicare funds.

IMC was run by Cuban-American Miguel Recarey, a character with a host of idiosyncrasies. He carried a 9-mm Heckler & Koch semiautomatic pistol under his suit coat and kept a small arsenal of AR-15 and Uzi assault rifles at his Miami estate, where his bedroom was protected by bullet-proof windows and a steel door. It apparently wasn't his enemies Recarey feared so much as his friends. He had a long-standing relationship with Miami Mafia godfather Santo Trafficante, Jr., and had participated in the illfated, CIA-inspired mob assassination plot against Fidel Castro in the early 1960s. (Associates of Recarey add that Trafficante was the money behind Recarey's business ventures.)

Recarey's brother, Jorge, also had ties to the CIA. So it was no surprise that IMC crawled with former spooks. Employee résumés were studded with references to the CIA, the Defense Intelligence Agency, and the Cuban Intelligence agency; there was even a fellow who claimed to have been a KGB agent, An agent with the U.S. Office of Labor Racketeering in Miami would later describe IMC as a company in which "a criminal enterprise interfaced with intelligence operations."

Recarey also surrounded himself with those who could influence the political system. He hired Jeb Bush as IMC's "real-estate consultant." Though Jeb would never close a single real-estate deal, his contract called for him to earn up to $250,000 (he actually received $75,000). Jeb's real value to Recarey was not in real estate but in his help in facilitating the largest HMO Medicare fraud in U.S. history.

Jeb phoned top Health and Human Services officials in Washington in 1985 to lobby for a special exemption from HHS rules for IMC. This highly unusual waiver was critical to Recarey's scam. Without it, the company would have been limited to a Medicare patient load of 50 percent. The balance of IMC's patients would have had to be private—that is, paying—customers. Recarey preferred the steady flow of federal Medicare money to the thought of actually running a real HMO. Former HHS chief of staff McClain Haddow (who later became a paid consultant to IMC) testified in 1987 Jeb that directly phoned then-HHS secretary Margaret Heckler and that it was that call that swung the decision to approve IMCs waiver.

Jeb admits lobbying HHS for the waiver, but denies talking to Secretary Heckler—and denies as well the charge that his call won the HHS exemption. "I just asked that IMC get a fair hearing," said later. After the IMC scandal broke in 1987, Heckler left the country, having been appointed U.S. ambassador to Ireland, a post she held until 1989. (Heckler is now a private citizen living in Virginia. We left a detailed message with her secretary, outlining our questions, but she declined to respond.)

In any case, the highly unusual waiver by federal officials allowed IMCs Medicare patient load to swell—to 80 percent—and the money poured in. At its height in 1986, IMC was collecting over $30 million a month in Medicare payments; in all, the company would collect $1 billion from Medicare. (Jeb would not discuss the IMC affair with Mother Jones. But in an opinion piece he wrote for the Miami Herald last May, he insisted that he had worked hard for IMC, looking for real-estate deals, and had earned his $75,000 in commissions. While acknowledging making a telephone call to one of Heckler's assistants on IMC Is behalf, he claimed the waiver was not granted on his account. The allegation of a connection, Jeb wrote, "is unfair and untrue.")

Despite Jeb's involvement, trouble began brewing for IMC when a low-level HHS special agent in Miami, Leon Weinstein, discovered that Recarey was defrauding Medicare through overcharges, false invoicing, and outright embezzlement. Weinstein had been following Recarey's activities since 1977, and as early as 1983 he believed he had enough information to put together a case. However, he found his HHS superiors less than receptive; they took no action on Weinstein's information.

But Weinstein kept digging and in 1986 renewed his investigation of Recarey and IMC—and again his HHS superiors blocked the probe. "Washington just refused to pursue my evidence," Weinstein, now retired, told Mother Jones last spring. "And they made it perfectly clear that I was not to pursue IMC. When I did, they threatened me and threatened my job."

Weinstein dug in his heels. "I had them this time. I told my superiors I would fight this time because I had nothing to fear. I had just reached retirement age. They immediately backtracked," he says. Weinstein was allowed to continue his investigation—though HHS still took no formal action against Recarey. Eventually Weinstein turned to Congressmen Barney Frank (D-NY) and Pete Stark (D-CA) with his information, sparking congressional hearings into the scandal.

Had it been up to HHS, Recarey would still be running his Medicare racket. But by chance, the now-disbanded U.S. Miami Organized Crime Strike Force was also investigating Recarey. (Recarey was bribing union officials in order to get them to sign workers up as patients at IMC, apparently so that IMC could meet its reduced non-Medicare patient requirements of 20 percent.) "We didn't know anything about the HHS investigation," former Organized Crime Strike Force special attorney Joe DeMaria says. "Recarey was bribing union officials.... But HHS never contacted us or told us anything."

Before Recarey's trial on bribery charges began, DeMaria's investigators also caught Recarey using his former spooks to wiretap IMC employees in an effort to discover who was talking to federal agents. DeMaria had Recarey indicted a second time, for the illegal listening devices. During Recarey's trial on the bribery charge, a lawyer who handled the bribe money testified that the money IMC gave him was not bribe money but "commissions" he had earned while doing work for the company. "See, that commission thing was Recarey's MO. They didn't call them bribes, they called them commissions," DeMaria explains.

After he was convicted, Recarey resigned from IMC and was immediately replaced by John Ward. (Ward had been law partner to Reagan-Bush campaign manager John Sears. And Sears had also been a lobbyist for IMC.) But Recarey's Medicare scam would never get to a public courtroom airing. Before his trial on the wiretap charge, Recarey skipped the country. His getaway was remarkable: just in time for his flight, the normally tight-fisted IRS expedited a $2.2 million income-tax refund, which Recarey claimed he had coming.

The tax refund was a windfall for Recarey. "Yeah, that was his getaway money," says a former IRS investigator who worked in the Miami office at the time but asked not to be named. "Though there is a special IRS procedure to expedite tax refunds for companies in financial distress, I don't think you can overlook the possibility that there was influence from the administration."

Recarey's last act before becoming a fugitive was an attempt to wire $30,000 into the bank account of Washington consultant and lobbyist Nick Panuzio—whose partner was then managing George Bush's 1988 presidential campaign. (The wire transfer failed only because, in his haste, Recarey had gotten Panuzio's account number wrong.) It was only after Recarey was safely out of the country that the U.S. attorney in Miami—a political appointee—filed formal charges of Medicare fraud against him.

Whistle-blower Leon Weinstein retired in disgust from HHS and tried to get the IMC case before a judge by filing a Qui Tam suit. Such suits allow a private citizen to sue to recover money for the government in return for a share of any settlement. In his case, Weinstein named IMC and Recarey as defendants. But HHS continued to fight Weinstein, first challenging his right to bring such a suit and later accusing him of stealing HHS documents before leaving his job. When the courts supported Weinstein, HHS then stepped in, took over his lawsuit, and shouldered him out. The case remains in the courts and is still unresolved.

HHS officials now pursuing the litigation claim that Recarey defrauded the Medicare system of at least $12 million. Leon Weinstein says the government is lowballing the loss and that Recarey's take from his IMC scam could easily be many times that figure.

Since skipping Miami in 1987, Recarey has been living comfortably in Caracas, Venezuela. Thomas Holladay, the consul general of the U.S. Embassy in Caracas, told Mother Jones that officials there were aware of Recarey's presence and had formally requested his extradition. "We made a formal request for his extradition," Consul General Holladay says. "But we can't do anything until the Venezuelans turn him over to us, and they have not done that." The conversation then ended abruptly. "You know, I'm really not supposed to be talking to you about this," Holladay says.

In May, following inquiries from Mother Jones, Congressman Pete Stark, who sits on the powerful House Ways and Means Committee, wrote to both the Department of Justice and the Venezuelan ambassador in Washington, demanding an explanation for six years of inaction on the Recarey case.

Jeb and the Contras

The fact that Recarey is living free in Caracas rather than in shackles at Fort Leavenworth could well be a result of the role IMC may have played in Oliver North's secret contra-supply network. Though members of the House Intelligence Committee claimed they found no reason to believe that Recarey was using IMC's Medicare facilities and funds to aid the contras, the evidence that IMC was involved remains compelling. In 1985, the same year that Jeb Bush was dialing for dollars to HHS officials for IMC, Jeb also hand-carried a letter from Guatemalan physician Dr. Mario Castejon to the White House—directly to his father's office in the Executive Office Building. Dr. Castejon's letter to Vice President Bush requested U.S. medical aid for the contras. George Bush penned a note back to the doctor, referring him to Lt. Col. Oliver North—whose pro-contra activities the president now claims he knew little about.

An entry in North's diary reads:

22-Jan-85

Medical Support System for wounded FDN in Miami—HMO in Miami has oked to help all WIA [wounded in action] ... Felix Rodriguez.

(Rodriguez was a former CIA official who advised Vice-President Bush's national-security adviser, Donald Gregg, currently U.S. ambassador to South Korea.)

Veteran CIA operative Jose Basulto told the Wall Street Journal in 1987 that he had personally attended meetings at IMC headquarters in Miami along with contra leader Adolfo Calero and Felix Rodriguez. Basulto also said that he had personally brought sick and wounded contras to IMC hospitals in Miami, where they received free medical treatment. Former HHS agent Leon Weinstein is not surprised that Recarey has not been returned to the United States. "My investigation," Weinstein says, "led me to conclude that there may have been a deliberate attempt to obstruct justice...because Recarey, his hospital, and his clinics were treating wounded contras from Nicaragua...and part of the $30 million a month he was given by the government to treat Medicare patients was used to set up field hospitals for the contras."

Link to comment
Share on other sites

One site names him as Guillermo Hernández-Cartaya, another Guillermo Cartaya Hernández, and another provices the nick ''Willy''

Link to comment
Share on other sites

  • 2 weeks later...
Guest Tom Scully

I am learning a lot from the pages of the long dormant blog of investigative reporter CD Stelzer, formerly of the St. Louis alternative weekly newspaper, THE RIVERFRONT TIMES.

I was drawn to this because of thie comment at this link, related to Charlie Dooley,:

http://www.stltoday.com/stltoday/business/...ewCommentAnchor

libertystlboy March 25, 2010 9:38AM CST

How much did Charlie Dooley get from the Molasky Group of Las Vegas?

http://mediamayhem.blogspot.com/2004_02_01...618693407515532

The Ghost of Hearnes: Scraping Muck from the Bootheel

For years, I thought former Democratic Gov. Warren Hearnes was dead. But there he was on stage at Forest Park Community College, my alma mater, standing right behind presidential candidate John Kerry.

Readers of Media Mayhem may recall that Floyd C. Warmann was Hearnes' right-hand man back in the late 60s and early 70s. Last week, the Republican-dominated St. Louis County Council approved the nomination of Warmann to a seat on the St. Louis County Police Board. Warmann was named to the position by St. Louis County Executive Charlie Dooley, a Democrat.

Readers may also recall that Media Mayhem recently revealed that the World Finance Corp. of Coral Gables Fla. owned a nine percent interest in Mercantile Bank of St. Louis in the 1970s. WFC -- a laundry for drug money -- was founded by Guillermo Hernandez Cartaya. Hernandez was a Cuban exile and Bay of Pigs veterans with ties to the CIA. Jefferson Savings & Loan of McAllen, Texas, which was owned by WFC, funneled dirty money to Mercantile, according to former Texas bank examiner Art Leiser. Hernandez, the founder of WFC, bought Jefferson Savings from the family of Democratic Senator Lloyd Bentsen.

Am I adding apples and oranges? Yeah, maybe, but they're both fruit. What's this got to do with Hearnes, you ask? Well, in the mid 70s St. Louis P ost-Dispatch reporter Ronald Lawerence reported that Mercantile Bank was the depository of a slush fund controlled by Hearnes, during his governorship.

Here's Lawrence's lede, dateline Kansas City, Nov. 22, 1975:

"Former Gov. Hearnes controlled throughout its life the secret political fund that was financed by unusual transactions involving Mercantile Trust Co. of Jefferson City, an Internal Revenue Service agent has testified in United States District Court here.

"Testimony of IRS agent Edwin L. Reising, contradicted assertions by Hearnes that he had no control over the fund, called the Bootheel Committee for Hearnes and knew nothing about it. ..."

Let's dig a little deeper into Lawrence's story:

Lawrence reported that Hearnes was alleged to control the slush fund from 1968 to 1973.

Also, a Mercantile banker, Donald E. Lasater, was indicted for hiding the existence of the slush fund. A judge later let Lasater off the hook, claiming that his actions had not impeded the investiagation into the Hearnes' tax case.

Lasater was represented by James E. "Jim Ed" Reeves of Caruthersville, Mo., which is in Hearnes' part of the state -- the Bootheel. Reeves twice served as interim U.S. Attorney for the Eastern District of Missouri in the 60s and 70s. You gotta be politically connected to get appointments like that. Interestingly, George Reeves, Jim Ed's brother and partner in the Carthursville firm of Ward & Reeves, was a FBI agent in World War II.

Carurtherville, by the way, was a center of organized crime in the 1960 s, including bootlegging, gambling and prostitution. And Ward & Reeves represented the local gang leader Lee J. "Jaybird" Gatewood, who was gunned down in 1969 outside his house in Caruthersville. So you've got a criminal defense attorney who represents mobsters and then changes hats and becomes a federal prosecutors. (This is kind of the reverse of the Helfrey and Hart method.)

Jim Ed Reeves shows up much later, in the e arly 90s, as an assistant prosecutor in the Waterwater investigation, helping to nail Judge David Hale, a Clinton crony. Reeves worked under Hickman Ewing, an unscrupulous former U.S. Attorney from Memphis. Who did the investigation of Hale and other Whitewater targets for Reeves and Hickman -- Rex Armistead, a former Mississippi state trooper with a very checkered career in law enforcement. (Do a keyword search under Armistead and Richard Mellon Scaife and see what shows up.)

Sorry for the digression. Hope I'm not losing you. I just made the Reeves-Lasater- Hearnes-Mercantile connection myself, while perusing my Mercantile clip file. There was a Lasater connected to Whitewater, too, but I never figured out if he was related to the Mercantile exec. ...

I guess the point of all this meandering is that if you don't dig deep enough you're never going to figure out what's going on. Former Gov. Hearnes is not dead (unless somebody dug him up) and he was standing on the stage less than two weeks ago here in St. Louis directly behind Sen. John Kerry, the Democratic presidential candidate. Standing shoulder-to-shoulder with the ex gov were former Senators Carnahan and Eagleton.

Background, from a thread I started two weeks ago on this forum.:

http://educationforum.ipbhost.com/index.ph...amp;mode=linear

NARA is building a new center in Missouri, a $100 million project said to be NARA's largest facility outside the Washington, DC , metro area.

The Irwin Molasky Group is reported to be building the new facility. Irwin is the nephew of the late Willie Molasky, a Race Wire partner of Moe Annenberg. Uncle Willie appeared before the Kefauver Criime Commission in 1950 with his attorney, Morris Shenker.

Born in 1927, Irwin Molasky is said in several books, to have been a Las Vegas development partner with Moe Dalitz, in a group called "DRAM" with the four principals being Dalitz. Adelson, Roen, and Molasky.

Willie's son was Allan Molasky and Allan\'s son was Mark Molasky. When he ran for Governor of Missouri in 1984, John Ashcroft, who later became the recent US Attorney General, enjoyed the benefit of the fundraising for his campaign by a man named Fred Steinbach, an employee of and partner in several businesses owned by Allan and Mark Molasky and a Molasky cousin.

Steinbach raised at least $1 million of the $1.6 million Ashcrroft raised in 1984 to beat his opponent, Roithman.

Steinbach became mayor of a Missouri residential district, but was forced to step down im 1990 after a female employee accused him of sexual misconduct. Ashcroft publicly distanced himself and the state republican party from Steinbach.

In an unrelated matter, Mark Molasky died in prison from an alleged overdose of pills in 1990 while he was serving a 32 months sentence on a conviction related to sexual molestation....

Edited by Tom Scully
Link to comment
Share on other sites

Please sign in to comment

You will be able to leave a comment after signing in



Sign In Now
 Share

×
×
  • Create New...