Contents:

• Part I
  
• Part II
  
• Documentation
  
• Part III

Who Is Richard Mellon Scaife?
Part I

The following article will be continued in a forthcoming issue.

He's considered the stupidest member of his extended family, and was kicked out of Yale, not once, but twice. He's a (supposedly recovered) alcoholic, as have been most members of the family. The kindest description of his personality is ``dark and mysterious.'' He is known for never looking his own employees straight in the eye.

He has a long history of using the U.S. Justice Department to target his enemies. He got his own sister's fiancé indicted; after his sister married the poor chap, the man ended up dead within a year--some say suicide, some say murder.

He owns a network of newspapers, but he himself refuses to be interviewed by reporters from other publications. On one occasion, when a reporter for the Columbia Journalism Review tried to question him, he berated her as a ``f--king Communist c--nt.''

He gave a million dollars to Richard Nixon's Committee to Re-Elect the President (CREEP), and he is the biggest funder of right-wing think-tanks in the United States today.

Meet ... Richard Mellon Scaife.

His name is hardly a household word, but in the past quarter-century, ``Dickie'' Scaife has been one the most powerful behind-the-scenes operators in the United States. His power comes purely from his wealth, and specifically, from the way that he has deployed that wealth at the instruction of the Anglo-American banking families that he represents. Dickie is not known for his brains--in fact, he was kicked out of college twice, first expelled as the result of a drunken brawl, and flunked out the second time. His family made him go ``local,'' to Pittsburgh University, which he tried to make up for, by majoring in British history.

Only recently has Richard Mellon Scaife come into public prominence, as a result of the disclosure that he is the bankroller of a cushy ``retirement'' position for Whitewater independent counsel Kenneth Starr at Pepperdine University. This raised eyebrows, to put it mildly, because Scaife is the principal funder of a news media propaganda campaign aimed at defaming and discrediting Starr's main target, President William Clinton. Scaife has also bankrolled a nationwide crusade charging that White House aide Vincent Foster did not commit suicide, but was murdered; something which is also the subject of official investigation by the recipient of Scaife's largesse, Kenneth Starr.

In the 1980s, Scaife also coordinated and financed a similar campaign of media defamation against Lyndon LaRouche, a Presidential candidate and founder of EIR, and Scaife has a long history of using his own newspapers to smear others who have drawn his ire.

But this is nothing new for Scaife. What he is now doing to President Clinton, and what he did to Lyndon LaRouche, is what he was trained and deployed to do. Scaife is not simply a ``multimillionaire supporter of conservative groups,'' as he is portrayed in the news media; nor is he simply an eccentric rich man who has an obsession against President Clinton.

To understand what is being done to President Clinton today, and to understand what lies behind the campaigns of defamation run by the news media against figures such as Clinton or LaRouche, it is necessary to know who and what, someone like Richard Mellon Scaife actually is.

That story, naturally enough, starts in London.

The Anglo-American OSS

For example: Paul Mellon (a cousin of Dickie's mother and a rabid Anglophile) was recruited in London to the OSS by his brother-in-law, David Bruce. Paul trained with British troops, became a major in the OSS, worked under Allen Dulles in Berne, Switzerland, and commanded a unit responsible for conducting propaganda operations behind disintegrating German lines.

David Bruce, husband of Paul Mellon's sister Ailsa Mellon Bruce, was designated by OSS head William Donovan to oversee all OSS operations in Europe from his base in London. (Although some say, with justification, that it was Bruce who was designated by the U.S. banking-establishment families to oversee Donovan.) Another OSS cousin was Larimer Mellon, who likewise worked on Allen Dulles's staff in Berne.

David Bruce (a direct descendant of the Scottish Bruce dynasty) later divorced Ailsa and married his second wife, Evangeline, an OSS secretary whose father had been a special liaison to British intelligence from the U.S. State Department.

It is reliably reported that these Anglophilic OSS circles around Scaife's father were the crucial influence on steering Dickie into intelligence-related ``philanthropy''--i.e., the private funding of joint British-U.S. intelligence projects which were commonly mis-identified as ``CIA'' projects or fronts.

It is more accurate to describe the CIA as a ``front'' for these Anglo-American banking families. But even that would be too simple. The CIA is an agency of government, and is thus subject to the institutional and bureaucratic pressures to which any agency of government must respond. The ``families'' attempt to control the CIA, as they do with the State Department and other agencies. The principal means of control is through the private financing of think-tanks, conferences, publications, etc., which attempt to train the personnel, and set the agenda, for the institutions of government. This is precisely what Dickie Scaife and his family money did when the Reagan-Bush administration came into office in 1981.

The "Focal Point" and First Boston

The Focal Point system, within the official government apparatus, was originally created in the mid-1950s by then-CIA Director Allen Dulles. It functioned as a capability extending into other agencies, particularly the Department of Defense, for conducting covert operations and paramilitary ``special operations.'' A particular emphasis was counterinsurgency and ``civil affairs'' (as taken over from the British); an included feature of this was psychological warfare and propaganda.

Within the military, the Focal Point system was centered in the Joint Chiefs of Staff--and remnants of this system still exist to this day, in the Support Activities Branch of the J-3 Special Operations Division.

There was also a substantial ``private'' component to the Focal Point system, the precursor of the privatized intelligence operations authorized under the Reagan-Bush Executive Order 12333. But this privatized intelligence system was already active in the 1950s, according to knowledgeable sources, with the First Boston Corp., the First National Bank of Boston (now Bank of Boston), and other banking houses playing a leading financial role.

Of particular interest here, among the many families which played key roles in this Anglo-American bankers' intelligence network (such as the Astors, Rockefellers, and the du Ponts), are three families: the Roosevelts, the Mellons, and the Welds.

Mellon Securities had merged into First Boston in 1946, and as of about 1980, the Scaife family held about 6% of First Boston, and the combined Mellon and Scaife families about 13%. First Boston's principal law firm was Sullivan and Cromwell, out of which Allen Dulles ran U.S. intelligence after the termination of the OSS and until the creation of the CIA. This is also Paul Mellon's law firm; his and much of the Mellon family's financial affairs were run by Stoddard Stevens of Sullivan and Cromwell, who has been described as Paul's ``father figure.''

Dickie Scaife was brought into this system by his OSS relatives no later than 1973, and in 1979 he was placed on the board of directors of First Boston, where he remained until 1987. At that time, 40% of First Boston was owned by Crédit Suisse-White Weld (of the dope-running family of former Justice Department official William Weld). In 1988, First Boston became CS First Boston, and the size of the board was apparently considerably reduced.

Already in 1929, a White Weld banker, John A. Gade, had proposed the creation of an American central intelligence agency, to be modelled explicitly on British intelligence. The current, most public, standard-bearer of the Weld family, is William Weld, who organized the judicial frameup of Lyndon LaRouche from his positions as U.S. Attorney in Boston and, then, head of the Justice Department's Criminal Division. William Weld is married to a Roosevelt, Susan, the daughter of another OSS veteran, Quentin Roosevelt.

The Oyster Bay branch of the Roosevelt family is deeply enmeshed in this OSS-Wall Street intelligence apparatus, and they are especially close to Cord Meyer, a key operative of this network who shows up again and again as a top operative with responsibility for handling ``CIA'' front organizations. It was Teddy Roosevelt's grandson Kermit (``Kim'') Roosevelt, who had proposed the creation of a ``propaganda and intelligence agency'' to Wall Street lawyer William Donovan during World War II. Kermit subsequently worked with British intelligence to overthrow the Mossadegh government in Iran in 1953, an action which worked to the financial benefit of not only British Petroleum, but also of Gulf Oil, a Mellon family enterprise which was closely tied to First Boston after the 1946 Mellon Securities merger. In 1958, Kermit ``retired'' to take the strategic position of vice president for government relations with Gulf Oil.

Dickie gets his assignment

Of singular importance is the position Dickie was given in early 1973, when he was allowed to take over ownership of Forum World Features, a joint British intelligence-CIA news media operation based in London. This is probably the most important career advancement for Dickie, for it defines the track he has pursued since: the use and the manipulation of the news media to promote favored causes, and to attack and defame adversaries. There is a direct path from Forum World Features, to the Bush ``secret government's'' Public Diplomacy operation created in 1983, which in turn spawned the ``Get LaRouche'' task force, all the way through to the anti-Clinton propaganda machine which Scaife directs and finances today.

The background of Forum World Features (FWF) is instructive. Although accounts of its creation vary, it appears that it was a division of Kern House Enterprises, created by Kermit Roosevelt in the 1960s; one account says that Kermit ``was entrusted with creating the CIA's publishing empire.'' Kern House was set up by Roosevelt with Mellon money; in turn, it set up a London subsidiary, Kern House Enterprises, Ltd. Kern House begat Forum World Features, financed with funds from the National Strategy Information Center (NSIC), based in New York. FWF's major purpose was to supply feature material to newspapers around the world, including at least 30 in the United States. It also commissioned a number of books.

One of the premier private intelligence think-tanks, NSIC was formed in 1962, primarily with Mellon family money; on the board was Prescott Bush (of the Harriman-linked Bush family, and George's brother), John Norton Moore of the University of Virginia (one of the authors of Bush's EO 12333), and various representatives of the corporate and intelligence world, as well as personnel associated directly with Scaife.

From 1966 to 1973, FWF was headed by John Hay Whitney, a raving Anglophile who had been U.S. ambassador to Britain, and who was the publisher of the New York Herald Tribune. In 1973, Dickie Scaife purchased Kern/FWF, and headed it until its demise in 1975-76, following its exposure as a ``CIA'' front. At the time of its dissolution in 1976, its three directors were Scaife, Scaife's top operative Daniel McMichael (former president of the Pittsburgh World Affairs Council), and Lewis Preston, the chairman of Morgan Guaranty Trust (and later head of the World Bank).

In 1975, a British weekly, Time Out, and the Washington Post, published a 1968 memorandum from the CIA station chief in London to then-director Richard Helms, describing FWF as an agency-sponsored operation providing ``a significant means to counter Communist propaganda.'' The memorandum portrayed FWF as a CIA proprietary, which was ``run with the knowledge and cooperation of British intelligence.'' The overseer of FWF in the United States was Cord Meyer.

(Cord Meyer, incidentally, not only promoted the publication of material favorable to the Anglo-American banking-intelligence establishment, but attempted to block publication of disfavored material. Author and former CIA officer Victor Marchetti reports that in 1972, Meyer, whom he describes as the number-two man in the CIA Clandestine Services, visited the New York offices of Harper and Row to attempt to stop the publication of Alfred McCoy's first edition of The Politics of Heroin in Southeast Asia. As a result, the publisher insisted that McCoy submit the manuscript to the CIA before it would be published.)

Although FWF was dissolved, its operations were not. Its day-to-day operations in London were managed by Brian Crozier, a British writer long associated with both U.K. and U.S. intelligence. In 1970, Crozier had also become the head of another FWF-created organization in London, which was renamed the Institute for the Study of Conflict (ISC). Between 1973 and 1979 alone, Dickie Scaife's private trusts gave over a million dollars to Crozier's ISC.

In a 1980 proposal, Scaife's aide Daniel McMichael described ISC as doing ``a first-rate job in conducting research on `low-level conflict,' i.e., political and psychological warfare, revolutionary activities, insurgency operations and terrorism.'' McDaniel boasted that ISC work ``is consistently used by the Thatcher government,'' and that the ISC had ``solid working relationships with the Heritage Foundation, the National Strategy Information Center, the Institute for Foreign Policy Analysis [associated with Tufts University and its Fletcher School] and a number of other Scaife-supported organizations.'' On ISC's board of directors at that time were a number of top, easily identified British intelligence and counterinsurgency officials.

After FWF was dumped, its book publishing operations were taken over by Rossiter Publications, later renamed Craven House. Crozier was also its managing director. Among authors published by Crozier's shop was Robert Moss, a British intelligence operative who floats between the ISC, the London-based Royal Institute for International Affairs, and the Heritage Foundation in the United States.

Promoting his British "Heritage"

(In November 1994, just after the commencement of the short-lived ``Gingrich revolution'' of the 1994 elections, Newt opened a speech at the Heritage Foundation President's Club by praising two people ``who have really created modern conservativism--Dick Scaife and Ed Feulner.'' Gingrich went on: ``Dick Scaife is a remarkable citizen who has spent many years as a key force in sustaining conservative ideas and who has played a major, major role on the Heritage Foundation's board, and he's been a good friend and a good ally for a very long time, and I remember working with him starting in the late '70s.'')

In fact, Scaife's role at Heritage increased after the 1976-77 shakeup, when he personally brought in Edwin Feulner to head it up. Feulner (a board member of the Sarah Scaife Foundation) placed many Brits into key policy positions at Heritage, among whom was Stuart Butler, a member of the British Fabian Society. A socialist at the ``conservative'' Heritage Foundation? Not so strange. Both are motivated by a deep-seated, bitter hatred of industrial capitalism. It was, after all, the ``Fabian'' London School of Economics to which Friedrich von Hayek, later the founder and head of the Mont Pelerin Society, had moved his ``Austrian School'' of economics in the 1930s.

In a 1981 interview with EIR, Butler explained it as follows: ``In the case of the Reagan government, we are using a conservative government to impose a quite radical, left-wing program--all based upon solid, liberal economic principles. There really isn't so much difference between the people in the Fabian Society, people like myself, and Milton Friedman. We really overlap in the middle of things on such ideas as local control.''

What Butler said then, goes many-fold for Gingrich's 1994 Contract with America.

But that gets ahead of the story. First came the so-called ``Reagan Revolution,'' which on virtually every level was run by operatives associated and financed by Mellon Scaife, along with four other foundations which make up the ``Philanthropic Roundtable.'' The Roundtable includes the Smith Richardson Foundation, the John M. Olin Foundation, the Lynde and Harry Bradley Foundation (these four are known as the ``Four Sisters'' because they finance almost all of their projects in common), plus the J.M. Foundation.

Even more important, was the reorganization of intelligence operations in the Reagan administration, and the creation of what became known as the ``secret government'' run under the personal direction of Vice President George Bush in the 1980s. This ``secret and parallel government'' was simply the Scaife Mellon network of think-tanks and and academic retainers, brought into the government, and made ``official.''

Who is Richard Mellon Scaife?
Part II

Part 2 of our exposé on the moneybags behind the media campaign against the President. Edward Spannaus reports on Scaife and the Bush ``secret government.''

Richard Mellon Scaife has recently come into prominence as the bankroller of a news-media campaign aimed at President Clinton, while he is sponsoring a cushy ``retirement'' position for Whitewater special prosecutor Kenneth Starr. In Part 1 (EIR, March 21), we showed that ``Dickie'' Scaife has been deployed for almost 25 years by the old Office of Strategic Services Anglo-American financier-intelligence circles, to do exactly this sort of thing.

In reality there were two governments in the Reagan-Bush administration--the official, public government, and the ``secret government'' run by Vice President George Bush. The official government, particularly the National Security Council, the State Department, and the intelligence community, were riddled with Scaife's grantees and beneficiaries. But behind the official government lay what became known as the ``secret government''--and Scaife's network of think-tanks and foundations provided the intellectual rationalization which justified its creation, including the infamous Executive Order 12333. As far as is known, most of Scaife's hirelings didn't dirty their hands with actual drug-running or assassinations, but they did provide key funding and staff for the entire so-called ``Project Democracy'' apparatus, and also for the semi-official ``public diplomacy'' propaganda machine which ran cover for Bush's Contra drug-runners and Afghansi terrorists. [fn1]

Then and now, Scaife does not limit his largesse to strategic and foreign policy matters, but he is also a primary funder of a burgeoning network of think-tanks and propaganda mills promoting the feudal economic policies coming out of the Mont Pelerin Society. Under the guise of ``Thatcherism,'' these groups provided the social and economic policies, and much of the staffing, for the so-called ``Reagan Revolution,'' and more recently, for the Gingrich-Gramm gang in the wake of the Republican Party takeover of Congress in the 1994 elections. One could say that the earnest money for the ``Contract with America'' was paid by Dickie Scaife.

A third distinctive cluster of organizations funded by Scaife are the right-wing legal foundations and litigation groups; originally founded to counter civil libertarians and environmentalists, they have increasingly become pro-environmentalist and libertarian in their outlook--as well as financing legal attacks on President Clinton and the Clinton administration.

Here, we will look more closely at the intelligence and foreign policy think-tanks which virtually took over the Reagan administration in 1981, and which provided the underpinning for Bush's ``secret government'' built up in 1981-86.

Origins of the secret government

Two Scaife-funded operations played central roles in preparing the way for the creation of this ``secret government'' machinery. The first was a series of national security seminars held during 1973-79 by the International Security Studies Program at the Fletcher School of Law and Diplomacy at Tufts University--organized by Prof. Uri Ra'anan. The second was a series of seven conferences held during 1979-84 by the ``Consortium for the Study of Intelligence,'' organized by Roy Godson.

Both Godson and Ra'anan were subsequently deeply involved in what became known as the ``Iran-Contra'' scandals; and--not surprisingly--both were personally and heavily involved in dirty operations against Lyndon LaRouche.

Ra'anan and the Fletcher School

After the arrest of Israeli spy Jonathan Pollard in November 1985, Ra'anan, the chairman of Fletcher's International Security Studies Program, was quoted praising his former student Pollard in the New York Times as ``bright and articulate.'' Upon Pollard's graduation from the Fletcher School in 1978, he had gone to work for U.S. Naval Intelligence. One of his classmates, Mira Lansky Boland, went to work for the CIA for two years, and then for the Pentagon; in 1984, Boland transferred to the Washington office of the Anti-Defamation League (ADL), where she soon became devoted full-time to the ``Get LaRouche'' task force.

Pollard was no accident, nor was Boland. Ra'anan (born Heinz Felix Frischwasser in Central Europe in 1926) spent the war years in London, and then emigrated to Israel. He came to the United States in the early 1960s, and, working out of the Israeli Embassy in Washington, set up an Israeli spy-recruiting unit. In 1967, he joined the faculty at the Fletcher School.

In 1973, the International Security Studies Program initiated a series of annual conferences, funded by Scaife, on a wide range of strategic topics. Dozens of senior figures in the U.S. military-intelligence community were brought in to participate. The last seminar, in April 1979, was on ``Intelligence Policy and National Security.'' Ra'anan himself was named to an advisory committee in 1980 to help shape Reagan's foreign policy and defense platform.

Godson and the Consortium

Roy Godson, after getting his master's degree at Columbia University (where he was already known as a ``CIA watcher of left-wing groups''), was immediately sent to Pittsburgh, where he was given his first teaching post at Carnegie-Mellon University (1967-69), and where he was also hired as a program director of the Pittsburgh World Affairs Council (where Scaife's aide R. Daniel McMichael was president). Godson's first book, American Labor and European Politics (1976), was financed by a grant that McMichael arranged; his next book was published by the National Strategy Information Center (NSIC).

From Pittsburgh, Godson went to Georgetown University in Washington, D.C., and by the late 1970s, was regarded as an ``expert'' on Soviet methods. In 1979, Scaife money enabled Godson to launch the Consortium for the Study of Intelligence (CSI), a direct extension of the 1970s Fletcher conference series, reflecting the expectation that the Republicans would be victorious in the 1980 elections, which would present an opportunity to get in on the ground floor of re-organizing U.S. intelligence and counterintelligence capabilities.

The Scaife-funded effort by the American Tories to take over and subvert the country's intelligence reorganization had an important, if unwitting, ally in the new Director of Central Intelligence And although Casey was not a great fan of George Bush, he was an enthusiast of ``off-the-books'' covert operations, and he often preferred using non-CIA personnel to run such operations--usually drawing on Pentagon personnel requisitioned through the NSC--which effectively put Vice President Bush in charge of such operations.

The ``charter'' of the secret government and privatized intelligence operations was Executive Order 12333, signed by Ronald Reagan on Dec. 4, 1981, along with EO 12331 (signed Oct. 20, 1981, which reconstituted the President's Foreign Intelligence Advisory Board, or PFIAB), and EO 12334 (also signed Dec. 4, 1981, which created the three-member Intelligence Oversight Board). The relationship between the three orders, was that PFIAB would identify areas where intelligence ``active measures'' or covert operations were desired; the Oversight Board then reviewed covert actions and provided the legal justification for them.

EO 12333 and its sister orders were the product of the Godson CSI Consortium process, along with a workshop on ``Law, Intelligence and National Security'' sponsored by the American Bar Association's Standing Committee on Law and National Security held in Washington in December 1979. All of this was funded by Scaife, and naturally, almost everyone who played a major role in the creation of EO 12333 was involved with the Sciafe-funded think-tank network. It was reportedly drafted by two regulars at the Godson Consortium--Angelo Codevilla, from the Hoover Institution and a senior staffer for the Senate Intelligence Committee, and Kenneth deGraffenreid, also a former Senate Intelligence Committee staffer and a Reagan-Bush NSC official--and then run through the Senate and House Intelligence Committees.

Others reportedly involved in the drafting were Paul Seabury and Anne Armstrong of PFIAB, and Prof. John Norton Moore of the University of Virginia, who became the chief legal consultant to the Intelligence Oversight Board.

EO 12333 was touted as ``unleashing'' the intelligence agencies from the restrictions of the Carter years, much of which stemmed from the post-Watergate Congressional investigations of the intelligence agencies in 1975-76.

Among significant changes from the previous 1978 Executive Order 12036, was that the President could designate agencies other than the CIA to conduct ``special activities'' (covert operations), and that CIA was permitted to conduct ``special activities'' inside the United States. Although private contracting had been permitted under the earlier EO, it could only be done covertly with the approval of the Attorney General; EO 12333 allowed concealment of private contracting without any approval by the U.S. Attorney General. According to one source who was involved in the process, deGraffenreid had sought an even broader privatization charter; this was beaten back, but the loophole was still big enough to permit almost anything that the dirty deGraffenreid faction wanted. This also opened the door even wider for the Bush networks to bring British and Israeli intelligence operatives into official U.S. intelligence operations.

EO 12333 also designated the NSC as ``the highest Executive branch entity'' for review and guidance of all foreign intelligence, counterintelligence and ``special activities.'' Under the committee structures being set up within the NSC, Vice President Bush was then effectively put in charge of all intelligence activities.

Theodore Shackley and covert operations

At the December 1980 Consortium event on ``Intelligence Requirements for the '80s: Covert Action,'' in Washington, Shackley's presentation laid out a detailed proposal for ``rebuilding'' America's covert paramilitary capabilities. The Shackley speech was a recipe for the subsequent Contra and related efforts, complete with the ``offline'' funding. According to one intelligence source, Shackley gave a similar presentation to the Reagan Presidential transition team on intelligence. Attending the briefing, according to the source, were Casey, Bush, and Max Hugel, Casey's first deputy for covert operations.

Shackley reportedly urged that the rebuilt covert intelligence and paramilitary apparatus be run ``offline''--which meant using the band of intelligence community ``asteroids'' who had gathered around him from his days as CIA station chief in Miami and later in Laos, such as Felix Rodriguez and the operatives who staffed the Oliver North-Richard Secord Contra supply operation and their international arms ring. Shackley also reportedly urged that the new special teams be run directly out of the White House: What this meant in practice, was through the NSC staff apparatus that functioned under Vice President Bush's direction under the authority of EO|12333, and National Security Decision Directives 2 and 3.

All of Shackley's proposals were enthusiastically promoted by Godson in the seven-volume proceedings of the CSI. The proceedings were published by the Scaife-funded NSIC, which appointed Roy Godson to head up its expanded Reagan-era Washington office.

Caught!

Sleaze testified that Godson had asked him for a contribution involving Nicaragua, and that as a result, he had then met personally with Oliver North, then-National Security Adviser Robert McFarlane, and Roy Godson in the White House Situation Room, where they asked Sleaze to raise $400,000 for a Contra organization. However, Sleaze testified that he raised only $5,000 from another individual, which he sent to Godson to be deposited with an offshore entity called ``I.C. Inc.'' Sleaze also said that he had arranged a substantial contribution (actually, $60,000) to Godson from a Goldman Sachs stockbroker, and that then there was another $100,000 donated to the Heritage Foundation, arranged through Ed Feulner, for Central America.

The money was laundered through Heritage, then through another non-profit organization controlled by Richard Miller and Frank Gomez, and then into I.C., Inc. The $60,000 contribution ended up in one of the North-Secord ``Enterprise'' bank accounts (that of Lake Resources) in Switzerland.

Miller was subsequently indicted and pled guilty to a charge of conspiracy to defraud the United States by using tax-exempt organizations for improper purposes. Gomez was given immunity from prosecution in exchange for cooperation with the independent counsel. Godson, Sleaze, and Feulner managed to escape indictment.

Footnote

1. For a thorough description of Bush's ``secret government'' apparatus and Public Diplomacy, see EIR Special Report ``George Bush and the 12333 Serial Murder Ring,'' October 1996, Chapter 2.

Documentation:
Richard M. Scaife's private government

Following is a partial listing of grants from 1973 through about 1993, made by the three Scaife family foundations run by Richard Mellon Scaife that publicly report their grants. The three are the Sarah [Mellon] Scaife Foundation, the Allegheny Foundation, and the Carthage Foundation. The complete list of grantees is much longer. There are also three private family trusts that do not report their activities publicly; it is reported that some of the most sensitive, intelligence-related grants made by Dick Scaife are handled through the private trusts. These are the Richard Mellon Scaife Family Trust No.|1 and No.|2, and the Trust for the Grandchildren of Sarah Scaife.

Intelligence and foreign policy think-tanks

Tufts University, Fletcher School of Law and Diplomacy

Georgetown University, Center for Strategic and International Studies (CSIS)

Stanford University, Hoover Institution on War, Revolution and Peace

American Bar Association, Standing Committee on Law and National Security

The Committee for the Free World

Committee on the Present Danger

Foreign Policy Research Institute, Philadelphia

Institute for Foreign Policy Analysis, Cambridge, Massachusetts

American Security Council Foundation

U.S. Global Strategy Council

Jamestown Foundation

University of Virginia Law School, Center for Law and National Security

New York University, National Security Education Program of the Graduate School of Public Administration

Freedom House, New York

Prodemca (Friends of the Democratic Center in Central America)

National Endowment for Democracy

Institute for the Study of Conflict, London, U.K.

Center for European and Strategic Studies, London, U.K.

World Affairs Council, Pittsburgh

Social-economic policy think-tanks

American Enterprise Institute

Heritage Foundation

Cato Institute

Reason Foundation

Free Congress Foundation

Atlas Economic Research Foundation

American Legislative Exchange Council

National Taxpayers Union

Foundation for Economic Education, Irvington-on-Hudson, New York

Manhattan Institute, New York

Citizens for a Sound Economy

Competitive Enterprise Institute

Intercollegiate Studies Institute

National Center for Policy Analysis

Rockford Institute

Institute on Religion and Democracy

Population control

Population Action International

Population Crisis Center

Federation for American Immigration Reform (FAIR)

News media propaganda

American Spectator

American Spectator Educational Foundation

Center for the Study of Popular Culture

Foundation for American Communications, Los Angeles

Foundation for Cultural Review

Media Institute

Western Journalism Center, Sacramento

Legal foundations

Washington Legal Foundation, Washington

Pacific Legal Foundation, Sacramento

Landmark Legal Foundation, Kansas City, Missouri

Atlantic Legal Foundation, New York

Mid-Atlantic Legal Foundation, Philadelphia

Southeastern Legal Foundation, Atlanta

New England Legal Foundation, Boston

Mid-American Legal Foundation, Chicago

Capital Legal Foundation, Washington

The Mountain States Legal Foundation, Denver

The new administration

• Martin Anderson: Assistant to the President for Policy Development; Hoover Institution, Committee on the Present Danger (CPD).

• Richard Allen: Reagan's first national security adviser; a founder of Georgetown Center for Strategic and International Studies (CSIS); then senior staffer at Hoover Institution.

• Richard Pipes: National Security Council (NSC) Soviet specialist; attended five of seven CSI seminars; CPD.

• Geoffrey Kemp: NSC Middle East specialist; from Fletcher School; CSIS.

• Roger Fontaine: NSC Latin America specialist; CSIS, American Enterprise Institute (AEI).

• Roy Godson: NSC consultant; National Strategy Information Center (NSIC); entire career was Scaife-financed and -sponsored.

• Kenneth deGraffenreid: NSC director of intelligence programs; attended six of seven CSI seminars.

• David Abshire: head of national security transition team, chairman of President's Foreign Intelligence Advisory Board (PFIAB); CSIS.

• Leo Cherne: PFIAB; Freedom House, CSI seminars.

• Paul Seabury: PFIAB; all seven CSI seminars.

• Glenn Campbell: transition team; chaired Intelligence Oversight Board (IOB); Hoover Institution.

• John Norton Moore: chief legal consultant to IOB; University of Virginia Center for Law and National Security.

• William Casey: Director of Central Intelligence
• William Van Cleave: Reagan's transition team on defense; financed by Scaife grant at University of Southern California.

• Jack Marsh: Secretary of the Army; NSIC; worked directly for Scaife.

• John Lehman: Secretary of the Navy; Foreign Policy Reseach Institute (Philadelphia).

• Fred Iklé: Undersecretary of Defense; CSIS, CSI seminar.

• Alexander Haig: Reagan's first Secretary of State; board of Foreign Policy Reseach Institute (Philadelphia).

• Jeane Kirkpatrick: Ambassador to United Nations; AEI.

• Edwin Meese: Counsel to President, then Attorney General; Center for Criminal Justice Policy and Management, University of San Diego; Pacific Legal Foundation.

Who is Richard Mellon Scaife?
Part III

Part 3 of our exposé on the moneybags behind the media assault against President Clinton and Lyndon LaRouche. Edward Spannaus reports.

The fact of the matter is that the Pittsburgh Scaife family was a pioneering U.S. industrial family, especially in the 19th century. At one time, the family was wont to boast that the Scaife Company (formerly William B. Scaife & Sons) was ``the oldest manufacturing company west of the Alleghenies.'' It was undoubtedly a beneficiary of the ``American System'' of economics--national banking, protective tariffs, and internal improvements--as was practiced off-and-on through the 19th century.

The company grew out of a tin-plating enterprise begun in 1802; it produced ordnance for the War of 1812 against the British, and also during the Civil War against the British-sponsored Southern secession. Throughout the 19th century and the first half of the 20th century, the Scaife metal-working company continually invented new products; it built boilers for steamboats and for railroad steam engines; it invented ``range boilers''--the forerunners of today's hot-water heaters for households--and high-pressure vessels, and provided corrugated iron roofing and structural iron for factories and warehouses.

But Dickie's father Alan Scaife preferred the financier-oligarchy milieu of the Mellon family to his own family's industrial tradition. He joined the Mellons for boozing, steeple-chasing, and fox-hunting, and married into the Mellon family in 1927. In 1940, he joined the Mellons' Gulf Oil, and within two years he had been brought into the ``Oh So Social'' Office of Strategic Services (OSS) which shipped him off to London. After the war, he served as the Mellon family representative on Gulf's executive committee, and was made a Vice President of T. Mellon & Sons--the newly created non-profit family forum and trust, which was explicitly based upon a British model. Despite all this, Alan Scaife was never treated as a full-fledged Mellon. Dickie would later describe his father as ``sucking hind tit'' to the Mellons.

As he grew older, young Dickie became resentful of the treatment that his father had gotten at the hands of the Mellons, and he often made his animosity known, particularly toward his uncle, Richard King Mellon. Dickie became known as a ``bull in a china shop.'' Some attributed his impetuousness to his being thrown by a horse at age 9; his skull was partially crushed, and was repaired with an aluminum plate and much plastic surgery.

As soon as his father died in 1952, Dickie sold off the Scaife Company for one dollar.

Politically, Dickie became a Goldwaterite, when the Mellons were mainstream Republicans. In the 1960s, the Pennsylvania GOP split between the Rockefeller and Goldwater wings; Dickie bankrolled many of the right-wingers.

Nevertheless, by 1973, he was tamed and house-broken. The method by which this was accomplished is illustrative, and became the model which Dickie would go on to use against his targetted adversaries and enemies--including Lyndon H. LaRouche and, now, President Clinton. This may also, by the way, shed some light on Scaife's obsession with the death of White House deputy counsel Vincent Foster, and his fanatical backing of the effort to ``prove'' that Foster did not really commit suicide.

The taming of Dickie

After Richard Nixon was elected President in 1968--with the help of Scaife money--Duggan tried to block the appointment of Rockefeller man Dick Thornburgh as U.S. Attorney in Pennsylvania; Duggan lost the fight. The victorious Thornburgh came into office with an agenda for what many regarded as ``a political vendetta.'' Thornburgh changed the priorities of the federal prosecutor's office to focus on ``political corruption'' and ``white-collar crime,'' and before long, rumors began circulating about DA Duggan's alleged ties to the mob. The Internal Revenue Service got in on the case, and Scaife and Duggan attempted to use their contacts in the Nixon Justice Department to squelch the investigation--after all, Dickie had chaired the finance committee for Nixon-Agnew in 1968, and would go on to give over $1 million (broken up into 334 separate checks to avoid gift taxes) to Nixon's Committee to Re-Elect the President (CREEP) in 1971.

But Thornburgh persisted, subpoenaing four detectives from Duggan's district attorney's office, giving them immunity, and forcing them to give evidence against their boss. In the fall of 1971, Dickie was ``turned'': He crawled to Thornburgh's office to join in the destruction of his erstwhile political mentor and his sister's boyfriend. Dickie began to target Duggan in the newspaper he had purchased, the Greensburg Tribune-Review. As a book about the Mellon family puts it: ``Shorn of Scaife's influence, Duggan became easy pickings.''

Thornburgh was preparing a tax-evasion case against Duggan, and made preparations to interview Cordelia Scaife, to squeeze her for information about Duggan. She and Duggan quickly got married, meaning that she could not be compelled to provide evidence against her husband. Dickie, according to one account, ``was intensely upset. He went into orbit.'' Shortly after that, Dickie and Cordelia stopped speaking with each other; by all accounts, they have not spoken since.

On March 5, 1974, Thornburgh got a federal grand jury to hand down a six-count indictment for tax fraud against Duggan. But, a few hours before the indictment came down, Duggan was found dead, apparently of a blast from a shotgun which was found nearby without any fingerprints on it. Duggan's death was officially ruled a suicide--although, according to a number of sources, Cordelia has always believed Duggan was murdered, as has Duggan's family.

By 1975, Dickie Scaife had publicly reconciled with the mainstream Republicans in Pennsylvania, declaring himself a ``middle-of-the-roader,'' and proclaiming: ``I'm now enthusiastic about Rockefeller.'' But by 1974, as we described in Part 1 (see EIR, March 21, 1997), Dickie had been inducted into the old OSS intelligence circles of the Anglo-American bankers, and from that point on, all of his ``philanthropy'' went in whatever direction they dictated. Dickie had learned to follow orders: His betrayal of Robert Duggan was his rite of passage.

Scaife became notorious for using the Tribune-Review to target opponents. Two cases in the 1970s were particularly flagrant: that of Dr. Murdoch Head, and that of Dr. William Mansour. (These two cases were described in detail in an April 1981 Pittsburgh Post-Gazette series on Scaife, which was recently confirmed to the author to have been very accurate, by a knowledgeable source.)

The Murdoch Head case

Beginning in 1968, money from the Scaife foundations, at that time jointly run by Dickie and sister Cordelia, financed many Airlie conferences and films. By 1972, Dickie Scaife and the Airlie crowd were at odds, with Scaife pushing a heavy anti-Communist theme for Airlie films, which Dr. Head's associates resisted. (During this time, his estranged sister Cordelia continued to maintain close relations with Dr. Head and Airlie.)

Airlie found itself subjected to IRS audits in 1974 and again in 1976, for which it blamed Scaife. In 1978, Airlie tax documents and records were leaked to the Warrenton-based local weekly, Fauquier Democrat, and were also sent to the Virginia State Corporation Counsel and Attorney General. In 1979, Head was indicted by the U.S. Attorney in Alexandria, Virginia, on charges of tax evasion, conspiracy, and attempting to bribe Pennsylvania Congressman Daniel Flood and others. Head was not convicted on the substantive tax or bribery charges, but was convicted of conspiracy to defraud the IRS. (The parallels to the LaRouche case, which likewise involved the Alexandria U.S. Attorney's Office, the Virginia Attorney General, leaks to the Loudoun Times-Mirror--a sister paper of the Fauquier Democrat in Northern Virginia's oligarchical Hunt Country--and a tax-conspiracy case, are striking.)

Meanwhile, back in Pennsylvania, Scaife's Tribune-Review was devoting so much coverage to the Airlie case and Dr. Head's trial in Alexandria, that reporters, in both states, were dumbfounded.

The William Mansour case

Mansour was a local physician in Westmoreland County, Pa., who owned a local hospital, as well as a competing newspaper to Scaife's Greensburg Tribune-Review. He also held liberal political views, hence doubly drawing Scaife's intense dislike. Scaife went after Mansour in 1973, and, using the local U.S. Attorney's Office under Dick Thornburgh and the FBI, was able to instigate an FBI investigation. In fact, Scaife was able to arrange to have an FBI agent visit one of Mansour's former sisters-in-law at her Detroit home in September 1973 to interrogate her about Mansour's alleged ties to the Middle East, and whether he had given $500,000 to the Palestine Liberation Organization, which Mansour denied.

Scaife himself had long-standing connections into the FBI, and has been described as ``a friend from an early age of J. Edgar Hoover.'' (Perhaps not so coincidentally, the FBI agent who was deployed in Detroit at Scaife's request was a 22-year veteran of the bureau, Phil Mercado, who, during 1974, became the case agent and handler for informant Vernon Higgins. Higgins had been infiltrated the National Caucus of Labor Committees, the philosophical association founded by Lyndon LaRouche, and its 1970s political wing, the U.S. Labor Party. Higgins provided a pretext for armed FBI agents to raid the Detroit offices of the NCLC and USLP in June 1974. When Mercado's deposition was taken by NCLC and USLP's lawyers in 1975, the authorization for his testimony, and the restrictions upon it, was signed by then-Assistant U.S. Attorney General Dick Thornburgh.)

In 1977, the Justice Department officially opened an investigation of Mansour. Scaife's lawyer Clyde Sleaze (whom we met in last week's installment) was kept abreast of the grand jury investigation, which resulted in Mansour's indictment in 1980. As with the Airlie/Head case, Scaife's Tribune-Review devoted an inordinate amount of coverage to Mansour--all of it negative--which resulted in a drop in business for Mansour's medical practice. Justifiably, Mansour publicly accused Scaife of being behind his problems with the Justice Department.

"Get LaRouche!"

As early as 1967-68 at Columbia University, in New York City, Godson was already known to be watching the new political movement founded by Lyndon LaRouche, whose activities there were targetted by the FBI. Bureau documents further show that, in January 1976, Godson, accompanied by Tom Kahn of the AFL-CIO, went to FBI headquarters and briefed the head of the FBI's Internal Security Section on his pet theories about LaRouche and the NCLC. Godson was particularly fixated on speculating about the source of funds for the NCLC: According an FBI memorandum, he suggested that the NCLC was getting money from Iraq and from the Soviets, and he offered his intelligence reading on relations between LaRouche and various European communist parties. About two weeks after this, Godson called the FBI to offer his observations about alleged Greek communist influence on the NCLC during 1968-69.

In the course of one of the Godson-organized CSI seminars in the early 1980s, described in our last installment, EIR was explicitly attacked as being a vehicle for Soviet disinformation by former CIA counterintelligence official Donald Jamieson, and by Herbert Romerstein, a consultant to the U.S. Information Agency.

In the Reagan administration, Godson was one of the most vocal against LaRouche. During the early part of the Reagan administration, LaRouche and his associates often met with officials of the NSC and other federal agencies, particularly during the 1982-83 tenure of William Clark as national security adviser. Clark's executive assistant, Richard Morris, a witness for the defense at LaRouche's federal trial in 1988 and in a Virginia state trial of an associate of LaRouche in 1990, testified about a grouping within the NSC staff who were sharply opposed to LaRouche; Morris testified that the most vocal opponents of LaRouche were Kenneth deGraffenreid, Walter Raymond, and Roy Godson. Morris reported that Godson characterized Lyndon LaRouche as ``as a socialist, as a communist, as a member of the KGB, as a fascist, and always he was an extremist,'' adding that Godson insisted that Morris stop meeting with LaRouche and his representatives.

In January 1983, the demand for an investigation of LaRouche was brought into the President's Foreign Intelligence Advisory Board (PFIAB) by the circle associated with Scaife and Godson--the latter being a consultant to PFIAB at the time. According to an FBI document, a complaint by Henry Kissinger was raised at a PFIAB meeting of Jan. 12, 1983, by fellow PFIAB member David Abshire of Georgetown University's Center for Strategic and International Studies (CSIS)--a Scaife-funded think-tank. The vice chairman of PFIAB at the time was Leo Cherne, the founder of Freedom House, also a Scaife-funded institution. The PFIAB discussion did succeed in triggering an FBI investigation of LaRouche; the FBI responded with a memorandum repeating the Godson-Jamieson line, that activities of the NCLC and EIR ``dovetail nicely with Soviet propaganda and disinformation objectives.''

However, the FBI stated that, officially, it did not have an investigation of the NCLC going at that time under either domestic security or foreign counterintelligence guidelines. In order to remedy this, a campaign of news media defamation of LaRouche was organized, starting in early 1983 by the Bush-Scaife-Godson crowd. This was a joint public-private effort growing out of the ``Public Diplomacy'' operation, which we detailed in our October 1996 EIR Special Report on ``George Bush and the 12333 Serial Murder Ring.''

Public Diplomacy was headed at the NSC by Walter Raymond, a long-time CIA propaganda specialist who worked with Cord Meyer, and who intersected the London-centered Forum World Features operation headed by Dickie Scaife in the 1970s. In mid-1982, Raymond was posted to the NSC at the recommendation of Vice President George Bush's national security adviser Don Gregg. DeGraffenried became a deputy to Raymond. On Jan. 25, 1983--less than two weeks after the PFIAB meeting where the demand to get LaRouche was raised--Raymond drafted a memorandum proposing the creation of a private-donor group to fund Public Diplomacy propaganda programs supporting administration policies in areas such as Afghanistan, Central America, and Western Europe. ``We can not, forever, rely on one or two good souls, such as Smith-Richardson or Mellon-Scaife,'' Raymond wrote. (The Smith-Richardson Foundation, along with the John M. Olin Foundation and Scaife's foundations, comprise a cluster of intelligence-connected foundations which fund almost all the same institutions and programs as those we listed in Documentation last week, on p.|67.)

In March, Raymond sent another memo to National Security Adviser Clark, describing efforts to pull together the private-donors group: ``The group was largely pulled together by Frank Barnett, Dan McMichael (Dick Scaife's man), Mike Joyce (Olin Foundation), Les Lenkowsky (Smith-Richardson Foundation) plus Leonard Sussman and Leo Cherne of Freedom House. A number of others including Roy Godson have also participated.'' Frank Barnett was from the NSIC--funded by Scaife as well as the other cited foundations.

In the spring of 1983, the same group convened a meeting at the New York apartment of Wall Street financier John Train--known as ``the last of the OSS `old boys' on Wall Street.'' Dickie Scaife personally attended that meeting, as did about two dozen news media representatives. There were at least two followup meetings in 1983-84. Mira Lansky Boland, a graduate of Tufts University's Fletcher School of Diplomacy, and the Washington, D.C. Fact-Finding Director for the Anti-Defamation League (ADL), later testified that she attended a meeting at Train's residence in 1984, at which Roy Godson was also present.

The Train meetings were devoted to the coordination of planted articles and features hostile to LaRouche in the news media, and they directly resulted in attacks on LaRouche during the 1984-86 period on NBC-TV, in the Wall Street Journal, the New Republic, Reader's Digest, and thousands of others. It also ultimately resulted in a book-length attack on LaRouche published in 1989 with funding from the Smith-Richardson Foundation.

The campaign of news-media defamation of LaRouche was a precondition for the judicial frame-up of LaRouche and his associates. The first indictment against LaRouche was brought in Boston--where the Weld and Mellon families' First Boston Corp. wielded enormous power. When the Boston federal case against LaRouche flopped, a second indictment was brought in Alexandria, Virginia--the intelligence agencies' favorite U.S. court district--under the overall direction of U.S. Attorney General Dick Thornburgh.

"Get Clinton!"

The Columbia Journalism Review put it slightly more politely in a 1981 profile of Scaife: It said that he ``has made the formation of public opinion both his business and his avocation.... Scaife could claim to have done more than any other individual in the past five or six years to influence the way in which Americans think about their country and the world.''

Today, almost on a weekly basis, one can pick up a newspaper and find full-page ads on the Vincent Foster death, reprinting articles written by Christopher Ruddy for Scaife's Greensburg (now ``Pittsburgh'') Tribune-Review. The ads are paid for by Scaife, with funds laundered through the Western Journalism Center (WJC). WJC also occasionally reprints articles by the British Intelligence stringer and London Sunday Telegraph Washington correspondent Ambrose Evans-Pritchard--who also writes directly for the Tribune Review.

Other ads promoting theories about the alleged coverup of the Vincent Foster death can also be found, produced by Accuracy in Media (AIM), another group bankrolled by Scaife since the 1970s, and long known for its defense of the CIA against any attacks, not to mention its protection of George Bush's drug-running Contras in the 1980s. Currently, Scaife's foundations are AIM's largest contributors, having given them $630,000 from 1989-93.

The WJC and AIM also produce features on the Foster case for newspapers and television programs. AIM's Reed Irvine has a weekly broadcast on National Empowerment Television (NET), a cable channel founded by Paul Weyrich's Free Congress Foundation, to which Scaife gives about $1 million a year.

At the end of 1993, the Whitewater scandals against President Clinton, which had been dormant since the 1992 primaries, were revved up again with the publication of the ``Troopergate'' story in the British-linked American Spectator. Already in the 1970s, Scaife had given over $1 million to the American Spectator's publishers, and this has continued to the present day; between 1989 and 1993, Scaife gave $1.3 million to the American Spectator Educational Fund for ``research'' and other purposes.

Another top purveyor of Vincent Foster conspiracy theories is Strategic Investment newsletter, run by former Times of London editor Lord William Rees-Mogg, and James Dale Davidson, chairman of the National Taxpayers Union, also Scaife-funded. Davidson has produced a video jointly with the Western Journalism Center called ``Unanswered: The Death of Vincent Foster.''

What does Scaife himself say about all this? Very little publicly, but, in a rare interview he gave to the New York Times in 1995, he proclaimed, ``The death of Vincent Foster: I think it's the Rosetta Stone to the whole Clinton administration,'' adding that Foster's death had the potential to become the political story of the century.

The other major means by which Scaife finances attacks on the President--apart from his funding of House Speaker Newt Gingrich's GOPAC and right-wing think-tanks such as the Heritage Foundation--is through the cluster of right-wing legal foundations and litigation centers. Prominent among these (see Documentation, p.|67 in our previous issue's installment) is the Landmark Legal Foundation, which has offered advice and assistance to Paula Jones in her sexual-harassment claim against Clinton, and which has ensconced itself in other Whitewater-related matters.

Another, similar Scaife-financed organization is the Washington Legal Foundation, previously known as the Capital Legal Foundation. On its Legal Policy Advisory Board are Whitewater independent counsel Kenneth Starr, John Norton Moore of the University of Virginia Law School, and Massachusetts governor and former LaRouche prosecutor William Weld. On its National Board of Advisers are Senators Fred Thompson (Tenn.) and Orrin Hatch (Utah)--both involved in Senate investigations of the Clintons--and Jesse Helms, who played a role in the dumping of the first Whitewater independent counsel and his replacement with Kenneth Starr.

The work of Scaife's network of conservative legal foundations is overseen by the Washington-based National Legal Center for the Public Interest (NLCPI), which he, of course, also funds. One of the directors of NLCPI is David Davenport, president of Pepperdine University; Scaife is on Pepperdine's board of trustees. Davenport and Scaife also sit together on the advisory board of the Hoover Institution for War, Revolution and Peace in Palo Alto, California.

It is David Davenport who has offered Bush-leaguer Kenneth Starr a cushy position at Pepperdine University, financed in large part by Scaife, when Starr wraps up his investigation and legal assault on President Clinton as the Whitewater independent counsel. Starr may be ``independent'' of the administration, but he is certainly not independent of Dickie Scaife.