The Shadow Syndicate that Runs America
Exposing the Real Supranational Deep State, CIA Corruption and the Sinister Forces Hiding in Plain Sight
The farce of American democracy has been laid bare in the past decade, exposing the existence of two governments: one a Potemkin village, masquerading as the legitimate, elected authority, and the other a behemoth of a parallel government, shrouded in secrecy and accountable to no one.
This latter entity, aptly dubbed the “Deep State,” has metastasized into a gargantuan, self-sustaining universe, imperceptible to all but a select few who have been deemed worthy of its trust.
The notion that this leviathan operates with complete impunity, its inner workings invisible even to the most prying of eyes, is a reminder that the concept of transparency in governance is nothing more than a cruel joke.
The events of 2013, particularly the military coup in Egypt,1 served as a catalyst for a growing chorus of voices to acknowledge the existence of this shadowy apparatus.
The term “Deep State” has since become a rallying cry for those who dare to challenge the status quo, a euphemism for the entrenched, unelected power structure that has insinuated itself into the very fabric of American politics. The dichotomy between the visible government, with its pomp and circumstance, and the invisible, unaccountable Deep State, illustrates the chasm between the rhetoric of democracy and the reality of authoritarianism.
The former, the visible government, is little more than a Punch and Judy show, a distraction from the real machinations of power. The partisan bickering, the grandstanding, and the empty rhetoric are all mere window dressing, a facade designed to keep the masses pacified and distracted while the real power brokers operate with impunity.
The Deep State, on the other hand, is the iceberg beneath the surface, the unseen force that drives the ship of state, regardless of who is nominally at the helm. Its existence is a scathing indictment of the notion that elections can effect meaningful change, a reminder that the true locus of power lies not with the people, but with the unelected, unaccountable elite who pull the strings from behind the scenes.
The New York Times finally deigned to acknowledge the existence of the deep state in a 2013 Op-Ed2, offering a definition that is at once both revealing and inadequate. According to the Times, the deep state refers to “a hard-to-perceive level of government or super-control that exists regardless of elections and that may thwart popular movements or radical change.”
How delightfully euphemistic. The Times would have us believe that the deep state is some kind of mysterious, almost ethereal entity that operates outside the bounds of democratic accountability. But the truth is far more sinister. The deep state is not some abstract concept; it is a very real, very tangible force that has been shaping US policy for decades.
The deep state is the wellspring of “deep politics” - the hidden, often repressed practices and arrangements that underpin the exercise of power in the United States. These are the secret deals, the backroom negotiations, and the covert operations that are deliberately concealed from public view. And it is here, in the shadows, that the deep state operates with impunity, free from the constraints of democratic accountability.
Others, like Tom Hayden, have referred to the deep state as a “state within the state”3 - an entity that operates with its own agenda, its own interests, and its own logic. And they are right.
We have seen this phenomenon play out time and again, from the CIA's brazen interventions in Cuba to the Obama administration's craven capitulation to the forces of reaction. Remember the 2009 coup in Honduras, which Obama correctly identified as a “coup” - and then proceeded to do nothing to prevent it? This is the deep state in action, a force that is beyond the control of elected officials, a force that is driven by its own interests and its own agenda.
The insidious evolution of a two-tiered state has been mirrored by the stark polarization of American society into two distinct classes: the opulent “one percent” and the struggling “ninety-nine percent4”.
This dichotomy has been further exacerbated by the bifurcation of the US economy into two disparate entities: a domestic sector still subject to some semblance of government oversight and taxation, and an international sector that operates with relative impunity, unfettered by the constraints of regulatory bodies.
The symbiotic relationship between these dualities has been particularly pronounced since the Reagan Revolution of 1980, which marked a watershed moment in the escalation of wealth inequality in America.5 It is no coincidence that this period also saw the ascendance of Wall Street, the embodiment of the “one percent”, as a dominant force in shaping the deep state.
The role of Wall Street in perpetuating the deep state is a case in point. As we shall see, the financial behemoths of Wall Street played a significant role in expanding the deep state's influence in the aftermath of World War II. And, in a striking example of the revolving door between the deep state and the financial elite, the deep state would later reciprocate by facilitating the Reagan Revolution, which cemented the dominance of the "one percent" and further entrenched the deep state's grip on American politics.
My previous works have chronicled the America-centric narrative of the country's descent into empire and the rise of the deep state. However, it is equally crucial to acknowledge the broader global context, where the inexorable march towards a global society dominated by a handful of superpowers has been accelerated by technological advancements in transportation, from the 19th-century railroad to the 20th-century jet plane and space travel.6
The seismic rearrangement of the global landscape was further catalyzed by the devastating consequences of two world wars, which ultimately led to the decline of Britain's dominance, a position it had held unchallenged since the Napoleonic era.
The resulting power vacuum sparked a bitter Cold War between the Soviet Union and the United States, as both superpowers jockeyed for position in the new world order. However, it was not inevitable that this Cold War would degenerate into the brutal and clandestine conflict that it became, with its attendant espionage, proxy wars, and covert operations.
To understand the descent into this abyss, we must examine the complex interplay of factors on both sides of the Iron Curtain, including the ruthless persona of Stalin and the Soviet Communist Party's totalitarian ideology.
But we must also acknowledge the role of the American deep state, which, in a perverse symbiosis, responded to and even mirrored the Soviet Union's authoritarianism, thereby perpetuating a cycle of violence and paranoia that would come to define the Cold War era.
The notion that the United States was an innocent bystander, merely reacting to Soviet aggression, is a convenient myth that obscures the agency of the American deep state in shaping the conflict.
The Wall Street Overlord
Coined in Turkey in 1996, “Deep State” originally referred to the US-backed elements within the intelligence services and military that had repeatedly subverted the country's democratic process through violence and coercion.
However, the term has since evolved to encompass not only the clandestine networks within government, but also the powerful outsiders who pull the strings from behind the scenes - including those in the underworld and the rarefied world of high finance.
In this essay, I will employ the term “deep state” in its broader sense, to describe the symbiotic relationship between the secret government that operates in the shadows of Washington and the powerful interests that direct it. This “deep political system” is characterized by its willingness to operate outside the bounds of law and society, using clandestine means to achieve its objectives.
At the heart of this deep state lies an ambiguous symbiosis between two powerful entities: the Beltway agencies of the shadow government, such as the CIA and NSA, which have been instituted by the public state but now overshadow it, and the much older power of Wall Street, with its powerful banks and law firms. It is no exaggeration to say that Wall Street may be the ultimate owner of the deep state, pulling the strings from behind the scenes and reaping the benefits of its strategies.
After all, it is Wall Street that has the financial muscle to reward government operatives with lucrative second careers, far beyond the wildest dreams of a salaried government employee. This is the Faustian bargain that has been struck, where the deep state serves the interests of its corporate masters, while the public state is left to pick up the crumbs.
The 1950s saw the emergence of Wall Street as a dominant complex, a behemoth that encompassed not only banks and oil firms but also the oil majors, whose cartel arrangements were zealously defended against the US government by the influential Wall Street law firm Sullivan and Cromwell, which counted the Dulles brothers among its ranks. This larger complex, which I refer to as the Wall Street overworld, has a long and storied history that stretches back to the early days of the American republic.
Franklin Roosevelt's astute observation in 1933 to his friend Col. E.M. House that “The real truth … is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson” is a testament to the enduring influence of Wall Street on American politics.
This insight is borne out by the remarkable story of how a coterie of Wall Street bankers, including Nelson Rockefeller's grandfather Nelson Aldrich and Paul Warburg, convened in secret in 1910 to establish the Federal Reserve System. This system, which effectively concentrated control over the nation's currency supply and banking system in the hands of its largest banks, has been a cornerstone of Wall Street's power ever since.
The Federal Reserve Board, a quasi-governmental entity that has long been dominated by the interests of Wall Street, has consistently demonstrated its ability to wield significant political clout.
A striking example of this was the 2008 financial crisis, when the Fed leadership successfully lobbied successive administrations - first that of a Texan Republican president, and then that of a Midwestern Democratic one - to provide public funds to bail out the reckless management of Wall Street banks.
These banks, deemed Too Big To Fail, were also apparently Too Big To Jail, but not Too Big To Bail, as the Fed's actions made clear.7 This episode serves as a perverse reminder of the deep-seated influence of Wall Street on American politics and the economy.
Wall Street and the CIA
The incestuous relationship between the Treasury Department, the CIA, and Wall Street perfectly illustrates the revolving door that perpetuates a culture of cronyism and corruption.
Take, for instance, the case of Allen Dulles, who in 1946 was recruited by General Vandenberg, then Director of Central Intelligence, to draft proposals for the nascent Central Intelligence Agency.8
Dulles, a Republican lawyer at Sullivan and Cromwell in New York, promptly assembled a team of six advisors, five of whom were Wall Street investment bankers or lawyers. This cabal of insiders would go on to shape the CIA's policies, including the overthrow of the Arbenz regime in Guatemala, a move that was discussed and debated in the rarefied circles of the Council on Foreign Relations.9
The Dulles example illustrates the porous boundaries between the public and private spheres, where the same individuals effortlessly navigate the corridors of power, peddling their influence and shaping policy to suit their interests.
Dulles's influence was not diminished by his transition from Wall Street lawyer to CIA director; if anything, it was amplified. Even before formally joining the CIA in 1950, Dulles was busy orchestrating anti-Soviet propaganda in Berlin, and by the summer of 1948, he had established the American Committee for a United Europe (ACUE), a front organization that would become the largest CIA operation in Western Europe by the early 1950s.10
The lines between public service and private interest were blissfully blurred, as Dulles and his cohorts pursued their agenda with impunity.
Funding of Covert Operations
The CIA's first foray into covert operations was inspired by the financial wizards of Wall Street, who saw an opportunity to influence the 1948 Italian election using “over $10 million in captured Axis funds.”11 The fundraising efforts began at the exclusive Brook Club in New York, but Allen Dulles, still a Wall Street lawyer, convinced Washington to authorize the operation through the National Security Council and the CIA.12
As Dulles himself noted, “the proper function of our Committee [the National Security Council] was to determine the broad lines of policy, and then to leave the execution of that policy to the various departments and agencies of the government.” In this case, the “execution” involved using captured Axis funds to sway the Italian election, a move that set a precedent for future CIA interventions.
Dulles's friend Frank Wisner, who had also left Wall Street to join the CIA, oversaw the expansion of the agency's covert operations program through the newly created Office of Policy Co-ordination (OPC).
Meanwhile, Dulles, still a lawyer, campaigned successfully for the Marshall Plan, which aimed to rebuild Western Europe. However, as George Kennan and James Forrestal revealed, the plan had a secret codicil that allowed the CIA to conduct “political warfare” and skim millions of dollars from the plan.13 This created a slush fund that the CIA could use to recruit local assets, including those involved in drug trafficking.
One such asset was Irving Brown, an AFL member who was implicated in drug smuggling activities in Europe. Brown used funds diverted from the Marshall Plan to establish a "compatible left" labor union in Marseilles14, which was led by Pierre Ferri-Pisani, a drug smuggler connected to the notorious Marseilles crime lord Antoine Guerini.
Ferri-Pisani hired goons to attack striking Communist dock workers, a move that was sanctioned by the CIA. This was just one example of the CIA's willingness to use illicit means to achieve its goals, a pattern that would repeat itself in the Far East.
In Japan, the CIA established a secret fund known as the “M-Fund,15” which was used to build a democratic political system and support the country's economic development. However, as with the Marshall Plan, the M-Fund was also used for more nefarious purposes, including the recruitment of local assets and the conduct of covert operations.
The M-Fund was a massive slush fund that existed for over 40 years, and its true purpose was shrouded in secrecy. As one observer noted, “the M-Fund was used not only for the building of a democratic political system in Japan but, in addition, for all of the purposes for which Marshall Plan funds were used in Europe.” In other words, the M-Fund was a tool of US foreign policy, used to promote American interests and influence the course of events in Japan.
For at least two decades, the CIA engaged in a lavish subsidy program, funneling funds to right-wing parties in countries such as Japan and Indonesia. The source of these funds is shrouded in mystery, but it is possible that they were drawn from captured Axis funds, which had been seized by the Allies during World War II.
One popular myth suggests that the M-fund was fueled by gold looted by Japan during the war, known as "Yamashita's gold." However, the true origins of the M-fund remain unclear.
What is clear, however, is that the CIA preferred to keep these funds off the books, leaving them in the hands of cooperative allied powers. This included other U.S. agencies, such as the Economic Cooperation Administration (ECA), which was set up in 1948 to administer the Marshall Plan.16 The CIA also worked with oil companies and powerful drug kingpins, who were willing to provide financial support for its clandestine operations.
The CIA's reliance on outside funding sources continued unabated, even as it expanded its operations in Southeast Asia. In this region, the agency's proprietary firm, Sea Supply Inc., played a key role in supporting a CIA-led paramilitary force, PARU. Sea Supply Inc. provided an infrastructure for a lucrative drug traffic, which helped to finance the CIA's operations in the region.
The CIA also appears to have worked in coordination with slush funds from various U.S. government contracts. For example, the agency collaborated with the Howard Hughes organization, which was involved in a range of clandestine activities, including arms smuggling and espionage.
The CIA also worked with U.S. defense corporations, such as Lockheed and Northrop17, which were involved in foreign arms sales. These corporations often maintained their own slush funds, which were used to bribe foreign officials and secure lucrative contracts.
One notable example of the CIA's collaboration with Lockheed and Northrop is the case of the Netherlands, Japan, Italy, Indonesia, and Saudi Arabia. In each of these countries, the CIA worked with local officials and business leaders to secure lucrative arms deals, which were often facilitated by bribes and other forms of corruption.
The CIA's involvement in these deals was often hidden behind a veil of secrecy, but it is clear that the agency played a key role in promoting the interests of U.S. defense corporations in these regions.
Through the 1950s, the M-fund payouts were administered by Kodama Yoshio18, a key CIA asset in Japan. Kodama was responsible for distributing millions of dollars in funds from Lockheed to secure military contracts, an operation that the CIA was aware of but has never publicly acknowledged.
Lockheed's system of payoffs was a global phenomenon, with the CIA involved in at least four other countries: the Netherlands, Italy, Indonesia, and Saudi Arabia. Lockheed, the builder of the U-2 spy plane, was a major CIA-cleared contractor, and its payoffs were often used to secure lucrative military contracts.19
In the Netherlands, the beneficiary of Lockheed's payoffs was Prince Bernhard, a close friend of CIA directors Walter Bedell Smith and Allen Dulles. Prince Bernhard was also the organizer of the Bilderberg Group20, a secretive organization that brought together powerful individuals from Europe and North America to discuss global issues.
In Italy, Lockheed's payments were handled through a contact known as “Antelope Cobbler,” who turned out to be the Italian Prime Minister of the moment.21 This was a clever way of ensuring that the payments were always made to the right person, regardless of who was in power.
In Indonesia, Lockheed's payments were shifted in May 1965 to a new contract with a company set up by the firm's long-time local agent, August Munir Dasaad.22 This was just six months after a secret U.S. decision to have the CIA covertly assist “individuals and organizations prepared to take obstructive action against the Indonesian Communist Party (PKI). Over the longer term, this meant identifying and keeping tabs on ‘anti-regime elements’ and other potential leaders of a post-Sukarno regime.”23
Dasaad had been a long-time supporter of Sukarno, but by May 1965, he was already building connections with Sukarno's eventual successor, General Suharto. Dasaad's family relative, General Alamsjah, knew Suharto and was the beneficiary of the new Lockheed account.24 After Suharto replaced Sukarno, Alamsjah made funds available to Suharto, earning him the gratitude of the new President.25
Meanwhile, Stanvac, a joint venture of the Standard companies (later known as Exxon and Mobil), increased payments to the army's oil company, Permina, headed by an eventual political ally of Suharto, General Ibnu Sutowo.
Alamsjah was said to have been allied with Ibnu Sutowo in plotting against Sukarno, along with a well-connected Japanese oilman, Nishijima Shigetada. After Suharto's overthrow of Sukarno, Fortune wrote that “Sutowo's still small company played a key part in bankrolling those crucial operations, and the army has never forgotten it.”26
The special case of Lockheed kickbacks to Saudi Arabia will be discussed later, but it is worth noting the connection between Middle East oil and arms sales. As U.S. imports of Middle East oil increased, the pressure on the U.S. balance of payments was offset by increased U.S. arms sales to the region. Between 1963 and 1974, arms sales to the Middle East rose from 10% of global arms imports to 36%, with the United States supplying half of these sales.27