Hidden History: Where Organized Crime and Government Meet


“Taking the State wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, administrators, and beneficiaries from those of a professional-criminal class.”

~ Albert Jay Nock, Our Enemy, The State

The concept of the State is the greatest criminal conspiracy ever perpetuated upon humanity. As Nock details in his book above, all States originate in conquest and exploitation, and as elite oligarchies, continue to exercise this monopoly of crime over their subject peoples through war, taxation, conscription, and indoctrination.

The great German sociologist Franz Oppenheimer, a decisive influence upon Nock and other cogent scholars of the origin and practice of this criminal institution, observed:

“The State, completely in its genesis, essentially and almost completely during the first stages of its existence, is a social institution, forced by a victorious group of men on a defeated group, with the sole purpose of regulating the dominion of the victorious group over the vanquished, and securing itself against the revolt from within and attacks from abroad. Teleologically, this dominion has no other purpose than the economic exploitation of the vanquished by the victors.

~ Franz Oppenheimer, The State

This has been the case in every State throughout recorded history. From the primitive city-states of ancient Sumer located between the Tigris and Euphrates Rivers in Southern Mesopotamia, to the most sophisticated and powerful State-apparatus yet organized — that of the United States of America — presently engaged in an act of criminal conquest, occupation, and savage exploitation of those very lands and peoples in what is presently labeled Iraq.

When it comes to the State, there is truly nothing new under the Sun.

To persons studying ancient history these documented facts are obvious and unchallenged. There is an unquestioned acceptance of the brutal and exploitative nature of imperial kingdoms of the past. These were regimes of criminal bands of warriors, slave traders, pirates and plunderers, who over the course of time, grew into dynastic ruling families and elite oligarchies, sanctified by ritual trappings and tradition.

But when we come to regard modern or contemporary affairs, there is a great disconnect or discontinuity among most persons. Why is this so?

Murray N. Rothbard provided the answer in his seminal essay, “The Anatomy of the State,” the single most important article one can read to understand the nature of this predatory beast feeding upon its prey.

The answer lies with the pivotal role of “court intellectuals” in justifying and rationalizing the actions of the State. Whether by Homeric bards spinning poetic mythology of noble deeds; the Divine Right theology of a Jean Bodin, Richard Hooker, or Sir Robert Filmer; or spurious “Social Contract” theorizing ala Thomas Hobbes, John Locke, Jean-Jacques Rousseau, or John Rawls; the result has had the same bamboozling effect.

These tall tales are then funneled into the State’s indoctrination centers, the public schools and universities, which teach the ideological passive acceptance of this criminal process. The State is further bolstered by their willing servitors in the complaisant and compliant mainstream news media.

As George Orwell noted in his famous 1946 essay, “Politics and the English Language:”

“Political language. . . is designed to make lies sound truthful and murder respectful, and to give an appearance of solidity to pure wind.”

This article will attempt to challenge this seeming discontinuity by providing an analytic framework and key reference sources that document for the engaged reader the hidden history where organized crime and government meet.

The subject to be explored is the intersection between the “underworld” of organized crime and the “upperworld” of the power elite, with the connecting link being the intelligence community and covert action operations. The global narcotics trade (and related money-laundering) is the superglue which binds this relationship together.

As in a previous LRC article, “Franklin Roosevelt and the New Deal: An Annotated Bibliographic Guide,” the methodology we will follow is that of Libertarian Class Analysis as presented in such central works as Albert Jay Nock’s Our Enemy, The State, William Morrow and Company, 1935; Murray N. Rothbard’s Wall Street, Banks, and American Foreign Policy, Center for Libertarian Studies, Inc., 1996; and Rothbard’s pathbreaking article, “The Anatomy of the State.” (All three items are available online at Mises.org.) An understanding of Libertarian Class Analysis is the “litmus test” separating real libertarians from alternative lifestyle dilettantes dabbling in free market theory. Sometimes labeled “Power Elite Analysis” or “Establishment Studies,” this examination of causal relationships regarding the nature and scope of political power, who has it and how it is exercised, is crucial to understanding the nexus between the State and organized crime. We will show the similarity between this analysis and what researcher Peter Dale Scott calls “Deep Politics,” the critical examination of the sub-rosa reality behind surface events, an attempt to unmask the true face of power, exposing the elite social, economic, and financial groups and individuals who benefit from the exercise of State coercion.

LRC readers must know their history. Over the past several months, Lew Rockwell and other diligent scholars on this website have provided visitors with excellent articles and podcast interviews detailing the essential background on the Fed, fractional reserve banking, the Great Depression, etc. to better understand our present monetary meltdown and banking crisis as we slip into another Depression. Events do not happen outside of a historical context. As they have repeatedly stressed, what is happening in the financial sector is not accidental; it is deliberate, calculated policy on the part of our governing elites. The Fed is the great enabler of the welfare-warfare State and its empire abroad.

So it is with modern American history as it relates to government, the intelligence community and organized crime. Virtually every presidential administration from Franklin Delano Roosevelt to George Walker Bush has been tainted with ties to organized crime. The catalog of volumes below document these sinister connections, overt and covert, from “underworld” crime syndicates to the “upperworld” power elite.

In the gangster film genre, Hollywood has created some of its most powerful and enduring archetypal images in The Godfather trilogy, Goodfellows, and Scarface (both the early Paul Muni and later Al Pacino versions). But as is most often the case, cinematic storytelling is not reliable history. We will have to go elsewhere to begin our search. That place is Las Vegas.

Las Vegas is the Rosetta Stone to understanding America’s confluence between the State and organized crime. In their monumental book, The Money and the Power: The Making of Las Vegas and Its Hold on America, the brilliant husband and wife research team of Roger Morris and Sally Denton have authored a comprehensive synthesis detailing the historic nexus of organized crime syndicates, Wall Street, and the intelligence community. Business World described this volume as “a unified field theory of corruption — political, economic, and criminal — in which all dark roads lead to the oasis in the Nevada wasteland,” while The Wall Street Journal stated the book portrays “a saga of underworld subculture that intersects with that of government agents, senators, and presidents and ranges from Cuba to Dallas to Watergate.” Besides illuminating the criminal infrastructure of Las Vegas, the book touches upon the pivotal WWII covert arrangement known as “Operation Underworld,” between naval intelligence and the Mafia, and the intersection of the OSS, and later CIA, with international drug trafficking. It was such drug operations that provided the initial funding for Las Vegas. After reading this powerful work you will never look at major political figures such as the Kennedys, Harry Truman, J. Edgar Hoover, Thomas Dewey, Estes Kefauver, Richard Nixon, Lyndon Johnson, Barry Goldwater, Hubert Humphrey, Ronald Reagan, Paul Laxalt, and Bill Clinton in the same light without wider open, more jaundiced eyes. Besides the vast illegal proceeds from international drug trafficking and money-laundering, one of the important covert sources of financing of the Las Vegas Strip was from the Eccles brothers banking empire. George Stoddard Eccles was the heir of the largest Mormon fortune in Salt Lake City and one of the richest men in the Rocky Mountain West, while his brother Marriner Eccles was chairman of the Federal Reserve and key architect of the New Deal’s central banking system. Somehow it seems reassuring that along with gangsters Meyer Lansky, Bugsy Siegel, and Moe Dalitz, the head of the Fed was an important player in the building of this oasis of crime.

This book provided the basis of The History Channel documentary, Las Vegas: The Money and the Power.

A related but older volume which also undertakes a grand synthesis of “Clandestine America” and the subterranean forces at play, is Carl Oglesby’s The Yankee and Cowboy War: Conspiracies From Dallas To Watergate, published in 1976. The late Murray N. Rothbard, no stranger to LRC readers, was particularly enamored with this pioneering book, remarking:

“Carl Oglesby’s new book is not only exciting and thoroughly researched, it presents the only analytic framework — originated by himself — which makes sense of the violent events of the last decade and a half our recent political history, and puts them all into a coherent framework: the Yankee vs. Cowboy analysis.

“The important question looms: why is it that Oglesby has been alone in coming up with this framework? I think the answer is that the methodologies of other writers and researchers have led them astray: the free-market economists who are critical of government actions never bother to ask who benefitted from those actions and who were likely to be responsible for them; the Marxists are anxious to indict an abstract, mythical and unified ‘capitalist class’ for all evils of government, and believe that detailed research into concrete divisions and conflicts among power elites detract from such an indictment; those sociologists who have engaged in concrete power elite analysis have only examined structures (who owns corporation X, who belongs to what social club?) rather than the dynamics of concrete historical events; the one writer who has treated Yankees and Cowboys has been so blinded by particular hostility to the Cowboys that he virtually includes everyone living in the Sunbelt as part of a vast Cowboy conspiracy; and the various doughty investigators and reporters of Dallas or Watergate have struck to surface events because they lacked the overall coherent framework.

“Carl Oglesby has surmounted all of these defects, and has therefore been able to make a giant breakthrough in explaining our recent history.”

This important book, along with Carroll Quigley’s Tragedy and Hope (which Oglesby discusses in detail in a crucial chapter) played a decisive role in shaping our intellectual worldview regarding the exercise of State power in America, and has our highest recommendation. It is indeed a “tragedy” that it has not been updated and republished in the years since its first appearance but it is our “hope that its author will be prompted to do so by a new publisher. One cannot fully understand the Reagan Revolution phenomenon or the rise of the Bush dynasty (who were able to transcend both worlds of Yankees and Cowboys) without having comprehended Oglesby’s insights.

The natural, logical follow-up volume to this book is Robert Parry’s superb, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq.

Michael Woodiwiss, Organized Crime and American Power: A History. This amazing book outlines how it all interconnects. This is not the American History your coach taught you in high school. Government = Organized Crime.

Robert J. Kelly, The Upperworld and the Underworld: Case Studies of Racketeering and Business Infiltrations in the United States. This book’s concise back cover description tells it all: “From Damon Runyan’s colorful tough guys in black shirts and white ties to recent media coverage of John Gotti, the ‘dapper don’, public depictions of racketeers in the United States have drawn attention away from the true nature of organized crime and its extensive penetrations into mainstream business. The Upperworld and the Underworld: Case Studies of Racketeering and Business Infiltrations in the United States strips away the romantic patina and reveals the significant impact of racketeering on vital segments of American industry. In the process, Kelly provides a distinct vantage point for understanding organized crime, not just as an ‘outlaw fringe’ preying on society, but as a disturbingly integral element of our social and economic structure. Moreover, he confirms a widely held thesis that organized crime is not merely parasitic but an institutional component of American society.”

Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade documents beyond question that illegal drugs are the superglue which cement the relationship between organized crime and government together. First published in 1972 as The Politics of Heroin in Southeast Asia, the CIA actively tried to suppresses this explosive book. Twenty years of painstaking field research led McCoy to compile this revised and updated edition. It remains today an ignited stick of dynamite thrust into the cancerous heart of the State.

James Mills, The Underground Empire: Where Crime and Governments Embrace details why the “War On Drugs” is a colossal fraud. An extraordinary inside look at global narcotics trafficking, the biggest business in the world, and its protected status by politicians and intelligence services.

Douglas Valentine, The Strength of the Wolf: The Secret History of America’s War on Drugs. A candid and forthright history of the American State’s war upon narcotics and the American people.

Jonathan Kwitny, The Crimes of Patriots: A True Tale of Dope, Dirty Money, and the CIA. Almost lost within the Iran-Contra scandal which almost brought down the Reagan administration in the 1980s, was this mysterious story of the Nugan Hand Bank, where an international network of U. S. generals, admirals, and CIA men, including former director William Colby, were involved in a vast clandestine operation that engaged in narcotics trafficking, tax evasion, gun running and arms sales, and swindling American citizens and countless others out of millions of dollars.

Penny Lernoux, In Banks We Trust: Bankers and Their Close Associates: The CIA, the Mafia, Drug Traders, Dictators, Politicians, and the Vatican. Prize-winning author Lernoux documents the plethora of unsavory financial scandals which erupted across the globe in the 1980s, including those of the Nugan Hand Bank, Penn Square, Continental Illinois National Bank, Citibank, and that of the Vatican Bank and the sinister P-2 Masonic lodge at the heart of the Italian military-industrial complex and right-wing terrorist networks.

Jonathan Beaty and S. C. Gwynne, The Outlaw Bank: A Wild Ride Into the Secret Heart of BCCI. The resounding collapse of the Arab-owned, Pakistani-run Bank of Credit and Commerce International was the biggest banking scandal in world history. It symbolized more than almost any institution the heinous relationship between government and crime, with its choice clientele of dictators, arms merchants, the CIA, drug traffickers, and terrorists.

Jonathan Marshall, Drug Wars: Corruption, Counterinsurgency and Covert Operations in the Third World. In this brief but finely detailed volume, investigative journalist Jonathan Marshall marshals his hard evidence demonstrating the counterproductive and corrupting nature of the U. S. War on Drugs.

Jonathan Marshall, Peter Dale Scott, and Jane Hunter, The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era. This is the definitive volume exploring the internecine intricacies of the Iran-Contra scandal involving drug-trafficking, gun-running, assassination, and subversion of our constitutional checks and balances between a passive Congress and an out-of-control Executive branch.

Peter Dale Scott’s masterful Deep Politics and the Death of JFK, demonstrates that crime, ruthlessness, assassinations, and corruption are not aberrations or breakdowns of the American State, but absolutely endemic to it.

There are numerous authoritative, well-researched studies on America’s intelligence community. Here are the select books that have impacted us most: Richard Harris Smith, OSS: The Secret History of America’s First Central Intelligence Agency; Patrick K. O’ Donnell, Operatives, Spies, and Saboteurs: The Unknown Story of the Men and Women of WWII’s OSS; Burton Hersh, The Old Boys: The American Elite and the Origins of the CIA; Tim Weiner, Legacy of Ashes: The History of the CIA; Joseph J. Trento, The Secret History of the CIA; Richard J. Aldrich, The Hidden Hand: Britain, America and Cold War Secret Intelligence; David Wise and Thomas B. Ross, The Invisible Government; Hugh Wilford, The Mighty Wurlitzer: How the CIA Played America; L. Fletcher Prouty, The Secret Team: The CIA and Its Allies in Control of the World; Victor Marchetti and John Marks, The CIA and the Cult of Intelligence; John Marks, The Search For The Manchurian Candidate: The CIA and Mind Control: The Secret History of the Behavioral Sciences; W. H. Bowart, Operation Mind Control: Our Secret Government’s War Against Its Own People; Ernest Volkman and Blaine Baggett, Secret Intelligence: The Inside Story of America’s Espionage Empire; Bill Moyers, The Secret Government: The Constitution In Crisis; and Alexander Cockburn and Jeffrey St. Clair, Whiteout: The CIA, Drugs And The Press.

Jim Hougan, Spooks: The Haunting of America: The Private Use of Secret Agents. One of the most powerful, disturbing, and gripping books you will ever read. Excellent on Edward Bennett Williams, Meyer Lansky, Jimmy Hoffa, Howard Hughes, Robert Maheu, Richard Helms, Robert Vesco, and Richard Nixon and their Byzantine relationships to the American criminal State

Gus Russo, The Outfit: The Role of Chicago’s Underworld in the Shaping of Modern America, documents the sordid partnership between the “underworld” Chicago Outfit and the “upperworld” power elite. This is an excellent companion to The Money and the Power and Deep Politics and the Death of JFK.

Frank hard-hitting investigative journalism at its best by Pulitzer Prize-winner Seymour M. Hersh, The Dark Side of Camelot, provided the basis for Peter Jennings’ excellent ABC News documentary, Dangerous World: The Kennedy Years. Hersh forever destroys the myth of Camelot and details JFK’s relationship to an underworld subculture of gangsters, prostitutes, payoffs, drugs, and corruption. Gus Russo was a key researcher for Hersh and the ABC News project. There are direct research connections leading to his own volume above, The Outfit, particularly in regards to Joseph P. Kennedy’s deal with Chicago mob boss Sam Giancana using labor racketeering to fix the 1960 presidential election of JFK.

Gus Russo, Supermob: How Sidney Korshak and His Criminal Associates Became America’s Hidden Power Brokers. Chicago-born attorney Sidney Korshak, intimate of Ronald Reagan, became the ultimate untouchable power broker between the “underworld” of organized crime and the “upperworld” of the power elite.

Dan E. Moldea, Dark Victory: Ronald Reagan, MCA, and the Mob. An explosive and unsparing exposé, Moldea reveals “the Gipper” in the grip of the Syndicate’s MCA monolith.

Dennis McDougal, The Last Mogul: Lew Wasserman, MCA, and the Hidden History of Hollywood. More on the story of MCA’s Lew Wasserman, fixer Sidney Korshak, Screen Actors Guild president Ronald Reagan, and the mob.

Pete Brewton, The Mafia, CIA, and George Bush. Birds of a feather flock, thrive, ravage, and exploit together — pin-stripped vultures in our midst. Excellent on Bush’s connection to the Savings and Loan Crisis of the 1980s, an earlier Fed-driven monetary debacle.

Sterling Seagrave is the outstanding investigative historian and chronicler of the Asian intersection of organized crime and government. His outstanding trilogy, The Soong Dynasty, The Marcos Dynasty, and The Yamato Dynasty, provide a treasure trove of sordid details and fascinating tales of corruption, intrigue, and criminality on a vast scale.

Sterling Seagrave, Gold Warriors: America’s Secret Recovery of Yamashita’s Gold. Absolutely fascinating tale of how Japanese wartime plunder of hundreds of billions in gold and other looted Asian treasure came to finance America’s most secret covert operations in the Cold War.

David A. Kaplan, Yakuza: The Explosive Account of Japan’s Criminal Underworld. Powerfully details the connections of the Japanese criminal underworld with the political and financial elites who rule Japan. Excellent companion book to the above Seagrave books.

Gerald L. Posner, Warlords of Crime: Chinese Secret Societies — The New Mafia. This exceptional investigative reporting on Asian organized crime by Posner blew me away two decades ago and still remains extremely relevant and pathbreaking. Again, an excellent companion book to the above Seagrave and Kaplan volumes.

Martin Booth, The Dragon Syndicates: The Global Phenomenon of the Triads. This book is a great follow-up to Posner’s Warlords of Crime.

Nicholas Von Hoffman, Citizen Cohn. Red-baiter Joe McCarthy’s hatchet man, GOP power broker, mob mouthpiece, political fixer, and flagrant homosexual who intensely hated “gays,” enigmatic Roy Cohn was celebrated, loathed, and feared.

Dan E. Moldea, The Hoffa Wars: The Rise and Fall of Jimmy Hoffa. Analyzes the “blood feud” between Teamster president Jimmy Hoffa and Robert Kennedy. Like Roy Cohn and Lyndon Johnson, Hoffa hated RFK, and would do anything to see the Kennedy oligarchy eliminated. His body has never been located after his mysterious mob-related disappearance.

Charles Rappleye, All-American Mafioso: The Johnny Roselli Story. Dapper, ingratiating chameleon Johnny Rosselli was one of the Chicago Outfit’s key mobsters who enjoyed intimate, long-standing Washington-Chicago-Hollywood-Las Vegas connections to the Kennedy family. Rosselli was also a key figure in the CIA-Mafia assassination plots against Cuban dictator Fidel Castro, and later implicated in congressional investigations of the assassination of President John F. Kennedy. His dismembered corpse was found floating in an oil drum after his candid testimony to this committee.

A careful and reflective study of our hidden history can teach us much. In particular, it can teach us the enduring importance of freedom. Freedom has always been the genius of American civilization, indeed, of all civilization. It is time for each of us, as Americans and, more importantly, as human beings, to solemnly renew our civic religious legacy, and swear in our hearts with Thomas Jefferson, “eternal hostility against every form of tyranny over the mind of man.”

It is time for each of us to be in the vanguard of this worldwide renascence of human liberty in the first decade of the 21th-century, joining in solidarity with our brothers and sisters abroad in declaring war upon the State, all governments, as destroyers of rights and plunderers of the common heritage of humanity.