Prelude to Watergate: The Plot to Wreck the Golden Greek

From a new book, Spooks, in which the author details the results of four years' research into the use of secret agents by multinational corporations, by powerful individuals and by the Government.

Washington, D.C., was a caldron of intrigue during the early Fifties. The Cold War was plunging toward the political equivalent of absolute zero and, for the American intelligence community, it was a time of both danger and derring-do--the heyday of the rock-'em, sock-'em spook who was to reshape the pulp-fiction spy genre for generations to come.

The nation's first real intelligence agency, the CIA, had tripled in size from 5000 to 15,000 employees during its first half-dozen years and, as far as most of its officers were concerned, the agency was engaged in fighting an undeclared war. Whatever seemed useful was deemed essential, and one of the most useful things the agency thought to do was to circumvent--in a "deniable" way--those constraints against domestic operations that were imposed by its charter.

Accordingly, in the Fifties, the CIA established or subsidized an archipelago of private-detective agencies and so-called public-relations firms--ostensibly private businesses that operated with the secret sanction of the Federal intelligence community and that did its bidding on the home front. This is the story of one of those agencies and of one of its assignments.

Two Men, both in their 30s and conservatively dressed in the fashion of the time, walked side by side through the halls of the Capitol Building, arriving finally at the suite of offices reserved for the Vice-President of the United States. The two were private detective Robert A. Maheu and secret operative John Gerrity, and they had come to discuss with Richard Nixon a plot against one of the world's richest men, Aristotle Onassis.

"Rose Mary Woods ushered us in and gave us the usual coffee treatment," Gerrity recalls. "Maheu was nervous. You could see it. He wasn't used to meeting Vice-Presidents and the occasion sort of took the wind out of him. Anyway, Nixon came in and, right off, asked us how we were going to take care of the Jidda Agreement. And we told him. I said that I was going to be a whore, and you could see that Quaker face of Nixon's turn sour as I said it. But a whore in a good cause, I emphasized, and that seemed to perk him up again. Then Nixon gave us the whole Mission: Impossible bit. 'I know you'll be careful,' he said, 'and that you're very good at what you do. But you have to understand that mistakes can be made by anyone, and that, while this is a national-security matter of terrific importance, we can't acknowledge you in any way if anything should go wrong.'

"Hell, we'd both heard that a hundred times before," Gerrity recalls. "It was S.O.P., but I could tell that Nixon enjoyed saying it. He loved these kinds of private operations--partly because of the intrigue but also because there was always a lot of money involved. One of his jobs was to raise dough for the [Republican] party--and you can bet the oil companies paid off big on this one." After agreeing that Nixon would be kept informed of the operation's progress and that the CIA would provide the men with necessary (though deniable) backup, Maheu and Gerrity departed, and the conspiracy was under way.

A few weeks later, in the spring of 1954, a mysterious telephone call was received by the office manager of Robert A. Maheu Associates, a Washington-based CIA cover that specialized in Federal dirty work. What made the call unusual was not just the Etonian accent of the caller but also the message he conveyed: He had called to say that he could not talk over the telephone but that, if the Maheu office manager, Ray Taggart, would wait where he was, an envelope would be hand-delivered instantly. The contents of the envelope, the caller said, would make the Maheu agency's next assignment clear. On that note, the phone went dead.

The envelope arrived by messenger within minutes. Its contents were a dossier and a photograph of a swarthy Greek businessman whose name was on everyone's lips: Aristotle Onassis, the millionaire who had just bought Monte Carlo. The assignment was to proceed with the anti-Onassis campaign by installing a wire tap against the world-class tycoon. The man who placed the phone call and arranged for delivery of the envelope was L. E. P. Tylor, a top lawyer and confidant of Greek shipping magnate Stavros Niarchos, Onassis' bittersweet business rival and relative by marriage (the two had married sisters), whose hatred for the decadent and cutthroat Onassis had all the rage and spite of Greek tragedy. It was Niarchos, then, who was the immediate source of the wire-tap assignment. But, as Maheu and Gerrity's earlier meeting with Nixon indicates, Niarchos was himself fronting for other forces in this intrigue that was about to span three continents and two hemispheres.

•

The images and information that spilled from the messenger's envelope that day in 1954 have long since been forgotten. But the events they set in motion have resonated through Washington ever since and, in many ways, are with us still. Those events amounted to a prelude to Watergate, a private intelligence operation carried out under the rubric of national security and under the auspices of Federal officials, for the benefit of very special interests. In the course of that operation, the piratical, charismatic Onassis--friend to divas, prime ministers and the Kennedys--was attacked and nearly destroyed by the upper echelon of the Central Intelligence Agency, by Vice-President Richard Nixon, who presided over the conspiracy from his Capitol Hill office, and by Warren Burger, then head of the Justice Department's Civil Division and today Chief Justice of the U. S. Supreme Court.

The purpose of the anti-Onassis plot was to preserve monopolies controlled by the multinational oil companies; specifically, the monopoly over full exploitation of Saudi Arabian oil held by the Aramco consortium--a cartel operating as the Arabian American Oil Company and consisting, as they are now known, of Exxon, Mobil, Texaco and Socal. The Aramco companies feared that their Saudi hegemony was threatened by a secret contract--called the Jidda Agreement, after the Saudi city in which it was signed--that Onassis and an ex-Nazi financier had struck with the dying king of Saudi Arabia. The contract would have allowed Onassis to ship at least ten percent of all the oil flowing out of the Arabian kingdom.

Everything that could be thrown against Onassis was thrown against him. Calculated lies were disseminated by the paladin spooks of Niarchos, "polluting" the foreign and domestic press with misinformation designed to persuade the public that Onassis was a liar, a cheat, a criminal and a traitor. The tycoon's New York office was wire-tapped by a trio of secret agents, while he and his top employees were shadowed by Maheu's surveillance teams.

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Chief executives of the oil multinationals pilloried Onassis in the press, appealing to the public's xenophobia and Cold War chauvinism; meanwhile, behind the scenes, they instituted a boycott of the Greek's supertankers, threatening his millions most directly. In Washington and Paris, Onassis' enemies filed lawsuits charging him with conspiracy, defamation and fraud, and accusing him of such devious tactics as using disappearing ink on his contracts. Eventually, the campaign became a literal battle, with a Peruvian fighter plane bombing and strafing an Onassis ship as his fleet plied the freezing Humboldt Current in search of whales.

It was a war within the Cold War, a battle by the oil giants to preserve their absolute control of the world's primary energy source and by politicians and Federal agencies to preserve their productive relationship with the multinational oil companies. The pattern established in the affair was one in which the then-fledgling CIA became a foreign-policy instrument of multinational corporations--a legacy that is with us still. In this, and in many other ways, the anti-Onassis plot was a microcosm of the recent secret history of the United States.

Maheu and Gerrity were not the architects of this plot, but they were its primary instruments. And it is through them that the plot unfolded in its most sinister detail.

•

Robert Aime Maheu was very much a part of the heady intelligence milieu of the Fifties. An FBI counter-intelligence hero in World War Two, Maheu subsequently rose dramatically in the bureau's ranks while still in his late 20s.

His last year and a half as an FBI agent, however, was a strange time. In late 1945, Maheu was transferred from New York to a one-man bureau in his home town of Waterville, Maine, especially created for him as an accommodation to his wife's supposedly flagging health. In 1947, however, Maheu claimed that his wife had experienced a "miraculous cure." Abruptly, he quit the FBI, leaving the bureau that summer with the explanation that he had grown bored with the same Maine office that had been tailor-made for him.

After abandoning the FBI, Maheu became a private entrepreneur and proceeded to lose a fortune he did not have on a cream-canning process that, in the end, did not work. In 1952, he returned to Government service, taking an investigative post at the Small Defense Plants Administration (SDPA), the predecessor of the Small Business Administration. Two years later, in February 1954, he left Government once again, this time to start his private-detective firm in Washington.

From the inception of Maheu Associates, its namesake was paid a monthly retainer of $500 by the Central Intelligence Agency, an amount equal at the time to the salary of a full-time middle-echelon CIA officer. Since Maheu's name had never before been associated with the CIA, it seems strange at first glance that the agency should have subsidized his return to the private sector.

The minor mystery of the windfall's provenance can probably be explained in terms of an anomaly found in Maheu's Federal file. According to Government records, Maheu had accumulated a little more than ten years' "comp time" toward a Government pension when he re-entered Government service as an SDPA investigator in 1952. FBI records, however, show that Maheu worked for the bureau for only six and one half years--between December 1940 and July 1947, when he quit to go into the cream-canning business.

At what Federal office, then, did Maheu spend the missing three and one half years? Unless the Government made an error in computing his comp time, Maheu spent only one year out of Federal service after leaving the FBI, rather than the four and one half years that he would have us believe.

In this connection, it is important to note that the Central Intelligence Agency was created in 1947 (the year Maheu grew bored with Maine) and became fully operational in 1948 (the year Maheu's cream-canning business started going down the tubes). Did Maheu--fluent in French and a polished counterintelligence agent to boot--spend his "lost years" working for the CIA? It is a speculative matter, but the likelihood seems real: The CIA stipend that financed the spy's transition from the SDPA to private practice in 1954 suggests that a prior connection existed between him and his Federal benefactors. (That would explain both the CIA's largess and the conundrum of the lost years. Unfortunately, the explanation only contributes to a larger mystery: If Maheu was working for the CIA between 1948 and 1952, what was he doing?)

The sensitivity of the CIA operations later entrusted to Maheu suggests that the agency had enormous confidence in his discretion and abilities, confidence that would hardly have been extended to an unknown. In 1960, for instance, Maheu served as a go-between in the CIA's attempt to recruit mafiosi Sam Giancana and John Roselli to help assassinate Cuban premier Fidel Castro. Another Maheu-CIA operation was their joint production of a porn flick that purported to show a Soviet-bloc leader (believed to be Marshal Tito) cavorting in bed with a blonde bimbo of unusual appetites; in fact, the "Communist leader" was a Maheu employee, the blonde was the employee's wife and the purpose of the cinematic sophistry was for the CIA to distribute the embarrassing footage in the leader's own country in such a way that it would seem to have originated in Moscow, and thus another rent would be torn in the iron curtain.

Not all of Maheu's work was Government-related in those early days, of course. Among his agency's earliest clients were powerful Washington attorney Edward Bennett Williams and the immensely horny, catastrophically paranoid Howard Hughes. Maheu's role as a top Hughes operative was to last until Thanksgiving 1970, when he was forced out of the Hughes organization at the time of the billionaire's bizarre disappearance from Las Vegas.

The Hughes Thanksgiving coup, an event that would transform Maheu into a clandestine celebrity, was far in the future, however. In 1954, Maheu's low-profile Apparat was in its infancy, but hardly inexperienced. Indeed, the background of those who came to be his "associates" was a rich cross section of service in the American intelligence community: Ray Taggart was, like Maheu himself, a former investigator in the SDPA; Tom Lavenia, later to become Maheu's partner, was a veteran of the Secret Service; John J. Frank was ex-FBI and ex-CIA; Louis Russell served as chief investigator for the House Un-American Activities Committee, helping Richard Nixon probe Alger Hiss (Russell died a year after the Watergate burglary, having earlier been a partner in James McCord's private security firm).

But, in truth, Maheu ran his shop in such a way that it was virtually impossible to tell who was fully employed there, who was under cover for some intelligence agency, who was working on a temporary contract or who was simply hanging around. The business was compartmentalized on a need-to-know basis, and Maheu's operatives themselves often did not know the full significance of the cases they were working on, who their real clients were or who was working with them. Maheu also encouraged his agents in such practices as using his credit cards whenever they liked, so that there was no way to tell when they were operating on Maheu's behalf and when they were on their own.

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In January 1954, a short time before Maheu was to leave the SDPA for private practice, Greek shipping tycoons Aristotle Onassis and Stavros Niarchos were separately indicted by the U. S. Justice Department for allegedly having violated the Merchant Ship Sales Act--legislation enacted in 1946 to prevent the sale of U. S. military-surplus vessels to foreigners. The indictments accused Onassis and (continued on page 118) Golden Greek (continued from page 98) Niarchos (as well as, eventually, several other Greek shipowners) of circumventing the act's intent by organizing a consortium of prominent Americans to front for them in the purchase of used T-2 tankers from the Government.

The indictments had been kept secret for more than six months while the shipowners' lawyers negotiated with U. S. officials. Heading those negotiations for the Government was Assistant Attorney General Warren Burger, a Republican lawyer from Minnesota who had been appointed chief of the Justice Department's Civil Division by President Eisenhower in 1953 and who had prepared the Onassis and Niarchos indictments. Burger's superior at Justice was Herbert Brownnell, Jr., a Republican kingmaker (he picked Nixon for the G.O.P. Vice-Presidential slot in 1952) and an erst-while New York lawyer (of the law firm Lord, Day & Lord). Oddly enough, it was Lord, Day & Lord that had advised Onassis in the late Forties that the tanker purchase was a lawful one, and Brownell himself had personally provided the same advice to a colleague of Onassis'. Now Brownell, having risen to Attorney General, was indicting Onassis, Niarchos and the others for taking his own advice!

During the months that the secret indictments were being negotiated, Onassis was spending a large amount of his time working out the Jidda Agreement. With the agreement finally signed, he returned to the U. S. (against his lawyer's advice) to settle what he believed to be a mere legal nuisance involving surplus-ship purchases that had taken place years before.

So it was that, while lunching in New York's Colony Restaurant on February 5, 1954, Onassis was not much disturbed to find that a U. S. marshal was waiting for him. In compliance with the marshal's subpoena, Onassis went to Washington three days later for his arraignment. Edward J. Ross, who represented Onassis in the matter, recalls the affair as being something of a legal circus:

"They took Ari down to a cell to be booked, mugged and fingerprinted. I wanted to be with him, but the marshals wouldn't let me, so we compromised and they locked me in a nearby cell with some of the wildest creatures I've ever seen in my life. Later I found out who they were: the Puerto Ricans who'd just bombed Congress."

On the flight back to New York, Ross says, he confided to Onassis that " 'for someone with all your wealth, you sure as hell have a lot of problems.' Ari nodded, and then he said, 'I know, and it's beginning to worry me.' "

The Onassis indictment caused a sensation in the press. In the eyes of the public, Onassis had replaced Croesus as a metonym for immense wealth. He was a romantic figure, dark and sybaritic, a Levantine Horatio Alger with headquarters aboard the Christina, a floating mansion replete with suites, El Grecos, its own hospital, movie theater and a lot more.

When a man of Onassis' wealth and stature shifted from the society and financial pages of the daily newspapers to those reserved for news pix of manacled men with newspapers over their heads, the public took notice. As the plotters had planned. Public opinion was, as we shall see, a central element in the conspirators' strategy.

The early months of 1954 were key to the plot. In mid-January, Onassis finalized his secret pact with the Arabs, winning the right to ship at least ten percent of all the oil produced in Saudi Arabia, in return for cash payments and a promise to train a Saudi merchant marine. That, of course, was perceived as a direct threat by the Aramco consortium--not only because their monopoly over all phases of Saudi oil production, as finely tuned as an Apollo launching, could brook no intervention but because a Saudi merchant marine capable of shipping oil could become a first step toward Saudi self-sufficiency in the petroleum business. Thus, with the contract a fait accompli (and its full terms still secret), the multinationals turned to the politicians and the spooks for help in preventing its implementation. Like his old nemesis John Gerrity, longtime Onassis confidant Constantine Gratsos is emphatic when he attributes the conspiracy against his ex-boss to the oil companies, regarding Maheu and the others as lackeys.

Certainly, it was a busy time. Only two weeks after the signatures had dried on the Jidda Agreement, Onassis was publicly indicted by Brownell and Burger for having violated the Merchant Ship Sales Act. The indictment was hardly an impulsive gesture, having been under consideration for at least two years. It stemmed from hearings held in 1951 by a Senate committee whose members included the up-and-coming California Republican Richard Nixon. The actual preparation of the indictment had been undertaken in 1953 about the time Onassis began discussions with the Saudis. Making that indictment public in February 1954 increased the pressure against both Onassis and the Government, hardening the lines between them: The legal negotiations between Justice and the tycoon's lawyers, suddenly a public issue, became increasingly brittle.

Meanwhile, before February turned to March, the indictment against Niarchos was also made public, increasing the pressure on him to cooperate in the anti-Onassis plot. And, within days of the Niarchos indictment, Maheu once again decamped from Federal service and established his CIA-for-hire office in Washington, with the contract to bust the Jidda Agreement--ostensibly awarded by Niarchos--as one of his first assignments.

It was about this time, in the spring of 1954, Gerrity recalls, that Nixon delivered his Mission: Impossible speech, setting the spooks on Onassis. Maheu offers a somewhat different version of events, claiming that it was he, while on contract to Niarchos, who "persuaded the Government that national security" was at stake.

As we have seen, however, Nixon's involvement in the affair dated back to his tenure on the Senate committee that sparked the indictment against Onassis. Moreover, there is reason to believe that Nixon needed no persuasion to join the oil giants in their anti-Onassis battle. According to Drew Pearson's Diaries, 1949--1959, the columnist's sources told him that Nixon's election to the Vice-Presidency in 1952 had been the result of what Pearson called a "conspiracy," in which the major oil companies allegedly poured a fortune into G.O.P. coffers on Nixon's behalf.

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Following their meeting with Nixon in the spring of 1954, Gerrity and Maheu divided their anti-Onassis activities and went their separate ways: While Maheu remained in Washington to oversee the campaign's clandestine, or "black," assignments, Gerrity flew off to Europe to conduct a veritable propaganda war against Onassis. "I was one-man A.P.," Gerrity recalls. "You can't imagine how busy I was."

A rugged ex-Marine and onetime foreign correspondent, Gerrity is equally at home in the worlds of journalism and intelligence. Formerly a Washington Post reporter, he is remembered by colleagues as a good reporter of the old school, though "something of a mystery man." Indeed, the editor of a large East Coast newspaper describes Gerrity as his mentor, remarking that it was Gerrity who taught him, while a cub reporter, how to write a lead and work a story.

In the years after he left the Post in (continued on page 182) Golden Greek (continued from page 118) 1946, Gerrity went on to work for various magazines, selling articles at home and abroad to such publications as Reader's Digest and Epoca, Italy's version of Life. Writing, however, soon became an on-and-off thing. Gerrity's brother-in-law, then head of the FBI's Washington office, introduced him to Maheu, an occurrence that was to plunge Gerrity into the Byzantine intrigues of Niarchos, the CIA and Howard Hughes. Gerrity was never an employee of Maheu's in any conventional sense but was, like many of Maheu's associates, a contract operative available for assignments that suited his talents. Today Gerrity is the senior Washington correspondent for the Daily Bond Buyer and The Money Manager, a financial paper that keeps tabs on world money markets, and he is able to look back on his anti-Onassis grand tour of Europe with cynicism and humor.

Gerrity's first stop on that tour was London, where he broke details of the previously secret Jidda Agreement in 11 commercial newspapers serving the shipping industry. With the agreement made public, oil-company spokesmen were able to pick up the torch and blast the Onassis-Saudi contract in apocalyptic terms that suggested it amounted to a death knell for free enterprise.

Typical were the remarks of Mobil (then Socony-Vacuum) president B. Brewster Jennings, when he told the Los Angeles World Affairs Council that the agreement "has extraordinarily far-reaching dangers." Furthermore, Jennings predicted, "if all [oil-producing] countries were to follow the Onassis plan, there would be no international trade at all."

In New York, meanwhile, the xenophobic Daily News damaged Onassis' reputation by publishing a secret letter written in the early Forties by J. Edgar Hoover. In the letter--leaked to the newspaper by an unknown Government source--Hoover branded Onassis (an Argentine citizen) as being "anti-American" and accused him of having expressed "sentiments inimical to the United States' war effort." (It was a nasty charge to make at the height of the Cold War and probably unjustified: A few years earlier, at the outbreak of the Korean War, Onassis had placed himself and his entire fleet at the disposal of the Secretary of the Navy.)

Nonetheless, the accusation was a convenient one for the anti-Onassis forces. After breaking details of the Jidda Agreement in London, Gerrity's one-man band moved on to Rome, picked up some active CIA assistance and became a small orchestra.

"Rome's a great place to plant stories," Gerrity says. "All you have to do is put something in L'Osservatore Romano, the Vatican paper, and every paper in Italy will pick it up; from there it goes everywhere."

How did he plant his stories? "Christ, it was a straight buy-out. Those guys over there were starving, and I could buy space by the page--like an advertiser, except that I was buying editorial space. Then I picked up a guy to help me, an Italian Jew who wrote a lot of stuff--and, believe me, while I may have been a hack, this guy was a hack! If you paid him $50, this guy would write 'Shit is blue' 1000 times."

What was the nature of his planted stories? "It was the end of the world; we blew everything out of proportion," Gerrity recalls. "Oil to Murmansk! Oil to Murmansk! That was the big theme: that this disloyal son of a bitch, Onassis, was going to ship our Arabian oil to the Russians. In the middle of the oil crisis, no less!"

Supplementing Gerrity's anti-Onassis effort in Rome were two CIA officers assigned to do his bidding and cover his back. The agency had given Gerrity a stratospheric "Q clearance" and consequently, he says, "I wasn't a CIA agent--the CIA was my agent."

"But, really," Gerrity continues, "these two CIA guys working for me--Donahue and Dimaggio--were quite a pair: trench coats, white-flannel pants, slouch hats, the whole bit. They'd call me at my hotel at six A.M. and say they wanted a meeting. Well, the only place I'm going at six A.M. is back to sleep. But whenever we met, they'd pick the most conspicuous place. I had a room at the Excelsior Hotel in Rome, but the agency boys refused to be seen there; said it was too obvious. Instead, they insisted we convene in the bar of a hotel whose concierge just happened to give more lire to the dollar than any other exchange in town. So the hotel was famous and every American in the city came tromping through its bar at one time or another. No place could have been less covert."

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With the CIA assisting Gerrity's propaganda efforts in Rome, Maheu was able to enlist the aid of Republican wheeler-dealers, oil-company paymasters and local police and telephone officials with close ties to the FBI in carrying out his black activities in the U. S. Chief among those activities were surveillance of Onassis' top executives and a wire tap on the tycoon's office telephones, a tap that a subsequent FBI investigation intimated was highly illegal.

Illegality, however, was of no apparent concern to Maheu. After all, this Onassis business had begun with a meeting with the Vice-President of the United States in his Capitol Hill office, and then Gerrity had flown off to Europe with a CIA Q clearance in his pocket and CIA officers at his beck and call. Like the Watergate burglars nearly 20 years later, the Maheu team was no ordinary band of fly-by-night gumshoes--it was a polished strike force of ex-Government operatives, trained at public expense, who were now operating with the sanction of top Federal officials against a target whom those officials perceived as a threat to their special interests. Aristotle Onassis, meet Larry O'Brien.

The plan to tap the phones in Onassis' New York headquarters was set in motion by Tylor's mysterious call to the Maheu offices and the subsequent arrival of the envelope containing Onassis' photo and dossier. Having received the go-ahead and the background data, Maheu dispatched operative Big Lou Russell to New York with the names of three contacts who might be able to arrange the tap. The first two proved unsuccessful, however, while the third turned out to be an overachiever: He showed Russell how the Onassis lines could be tapped by hooking into a Western Union cable, providing access to so many lines that if the operation had ever been exposed, it would have created a national scandal. Russell returned to Washington, shaking his head.

The next man believed to have had a go at the tap was Maheu agent John J. "Handsome Johnny" Frank, a rogue CIA officer who had close ties to the New York Police Department's elite Red Squad and other elements of the New York intelligence nether world. Frank is credited by fellow Maheu operatives with having arranged the actual installation of the Onassis tap. He is said to have done this by persuading a New York private detective to prevail upon his contacts with the telephone company--which was accustomed to cooperating with the Red Squad and the FBI on "national security" matters--to tap into two of Onassis' five office lines through its central switchboard.

The monitoring and taping of tapped conversations were to be done in a set of empty offices leased by Maheu in the name of the Schenck and Schenck Insurance Company on East 62nd Street in Manhattan. Use of the offices had been secured by Maheu through his friendship with Robert Judge, a prominent New York financier, and William Price, a Schenck executive.

Installation of the electronic eavesdropping equipment was accomplished late one summer night in 1954, when Maheu operative Bill Staten, a former FBI agent who today is a vice-president of Westinghouse Corporation, met three men outside a drugstore on East 62nd Street; the men, all of them clean-cut and in their 30s, introduced themselves to Staten as follows:

"William Remson."

"William Remson."

"Bill Remson."

Staten admitted the "Remson brothers" to the nearby Schenck offices and watched as they unloaded their equipment from attaché cases. "They asked me to go out for sandwiches and Q-Tips," Staten recalls. "I couldn't figure out what the hell they intended to do with tips for pool cues, but then they explained." (Q-Tips are cotton-tipped swabs sometimes used with alcohol to clean the magnetic heads of tape recorders.)

That was the last time that Staten saw the mysterious Remsons. "After the first time, I never saw anyone in the Schenck offices," says Staten, whose job it was to open and close the offices each day, taking a package of tapes with him in the evening. "There were three rooms and, whenever I showed up at night, the package would be waiting for me on a desk. I'd pick it up and leave."

The rest of Staten's time was spent--together with fellow Maheu operatives Bill Seerey and John Murphy--in shadowing the office manager of Onassis' New York headquarters. "He'd go to the office early and, a few hours later, I'd 'take him to lunch,' " Staten recalls. "Then back to the office until nightfall, then home to his apartment. He never went anywhere interesting."

At the end of its working day, the Maheu team would retire to its New York operations base--the National Republican Club, a swank retreat in mid-Manhattan where Maheu had obtained a suite of rooms through his friend Robert Judge. There, Taggart would "edit" the day's Onassis tapes, while Staten, Frank, Seerey, Murphy and other operatives would write up reports for Niarchos and discuss the next day's activities.

The tap in New York was not the only one placed against the shipping magnate, former Maheu agents believe, contending that the Greek was covered in London and Paris as well. Charles Lyons, described as the FBI's leading "wireman" during the early Fifties, was sent to London by Maheu for the duration of the Onassis operation. According to Gerrity, Lyons was working for both the FBI and Maheu during this time.

"It didn't matter, though," says Gerrity. "That was the whole significance of persuading the Government that the Jidda contract was dangerous: It meant that, in the end, Uncle Sam picked up the tab."

•

The pressure against Onassis was mounting to stellar intensity throughout 1954. Assistant Attorney General Burger's orders for the Government to seize Onassis' ships, begun in 1953, continued into the new year. Next, Onassis found that he could not get new contracts for his unseized ships, due to a concerted oil-company boycott of his tankers. Most sorely affected were the new supertankers that Onassis had commissioned to be built in German yards.

One of those, the King Saud I, was the largest tanker in existence, and yet none of the multinationals would put a single barrel of oil into its hold. Idled by the boycott, the supertanker--christened in June 1954 with holy water from Mecca's Zemzem well--was costing Onassis $10,000 per day for maintenance and harbor fees at Hamburg.

The Burger indictment, wire taps, surveillances and boycotts were only a few of the tycoon's problems, however. Yet another front was about to open. In May 1954, the Greek had come under attack from an occasional associate named Spyridon Catapodis, a stocky bon vivant who made a profession of brokering deals in the backwaters of the eastern Mediterranean. In a bizarre scene at the Nice Airport, Catapodis had confronted Onassis with curses, spit in his face and then proceeded to strangle him. While passers-by gasped and Ari O sank to his knees with the color draining from his face, Catapodis issued the ultimate insult to a Greek, calling Onassis a Turk. News of the episode scandalized the Riviera.

The details of Catapodis' complaint remained a speculative matter until November of that year, when he filed suit in Paris against Onassis. The charges were sensational: He said that he had signed a contract with Onassis that acknowledged his help in securing the Jidda Agreement and that promised a hefty commission, but that the diabolical Onassis had signed the contract with disappearing ink! When he had confronted Onassis on the matter of the vanished signature, Catapodis continued, the wily tycoon had casually slipped the original contract--with its missing signature--into his jacket pocket and never returned it! Then, after waiting two months for a new contract, Catapodis said, he had finally realized that he had been tricked and, in a fury, had assaulted Onassis at the airport.

While the charges were preposterous on their face, they made good copy and newspapers in Europe and the U. S reported the suit with great solemnity. The New York Times, for instance, carried Catapodis' charges in a lengthy page-one story under the headline: "Onassis Accused of Defrauding his Agent on Arabian Oil Deal. Signature in Disappearing Ink Cited in Paris Lawsuit. Operator Denies Charges."

Not surprisingly, the public chose to believe Catapodis' contention that the fabulous Onassis was capable of such low deeds. For his part, Onassis branded the story a lie and wondered aloud about the gullibility of the public: "What do they think I do," he asked, "go around with disappearing ink in my pen?"

Indeed they did, and Onassis' rebuttal was sufficiently sharp to permit Catapodis to open yet another front: While already suing Onassis in Paris for alleged breach of contract, Catapodis next retained Edward Bennett Williams, a Maheu client and friend of long standing, to file suit in the U. S., charging Onassis with defamation of character.

No matter what Onassis did, the roof came tumbling down. In addition to labeling Onassis a crook, Catapodis' suit alluded to the role of another middle-man in the Jidda Agreement, a sinister figure whose association with Onassis could hardly help the Greek's reputation. That man was Hjalmar Horace Greeley Schacht, a tall, aristocratic German who had been Reich currency commissioner in the Twenties and, having become an avowed Nazi, an architect of German rearmament in the Thirties.

During World War Two, Schacht played a smoky role behind the scenes, devising the economic master plan that would guide Germany in its dreamed-of reconstruction of a Nazi-ruled Europe. And yet, in the waning days of the Third Reich, Schacht left Germany for Zurich, apparently to press his plan for a peace that would be favorable to Germany. His ambiguous role toward the war's end permitted him, critics charged, "to brush the swastikas from his sleeves" and to emerge in the postwar world with his considerable personal wealth and banking powers intact.

Onassis and Schacht made a powerful team: One controlled huge fleets of tankers, the other held the keys to the wealth of Germany. Yet Schacht's name carried with it a sinister cachet. Once Schacht's role in negotiating the Jidda Agreement was disclosed, and confirmed by Onassis, the European press began to editorialize that the agreement was central to an international conspiracy designed to wrest control of Arabian crude from American hands--that, once the agreement was implemented, the Arabs would nationalize Aramco's holdings, replace (continued on page 214) Golden Greek (continued from page 184) American technicians with Germans and rely upon Onassis' German-built super-tankers to provide an outlet for the expropriated oil.

Onassis was up against the wall. In the space of only a few months, every part of his empire had been placed in jeopardy; sued, surveiled, boycotted, smeared and bugged on two continents, he was now--whether through coincidence or design--to be attacked on a third. For years, Onassis had been operating one of the world's largest whaling operations, a sea hunt in which his ships sailed the icy Humboldt Current along the western coast of South America. There had never been any problems until Onassis became embroiled in a dispute with Big Oil: In November 1954, Peru astonished Onassis and the world with its decision to militarily enforce an earlier declaration extending its territorial waters far beyond the traditional three-mile limit; thenceforth, the Land of the Condor would stretch 200 miles into the Pacific Ocean.

Former Onassis aides are convinced that Peru's coastal militance had been encouraged by those in the U. S. intelligence community who were determined to damage Onassis at any cost. In any event, the consequences for the faltering multimillionaire were swift in coming.

On November 15, Peruvian destroyers sailed 180 miles off the coast to surprise and capture four Onassis whalers. On the following day, the Onassis fleet's mother ship, Olympic Challenger, was circled by a Peruvian fighter plane that, after its order to proceed to the coast had been ignored, rained bombs on the Challenger and ripped apart its hull beneath the water line; when the ship began to limp, the fighter swept down and strafed its decks with machine-gun fire. Before the Challenger's radio went dead, its position was reported as 380 miles off the Peruvian coast.

The final blow to Onassis came in the form of pressure on the Saudis themselves. Since the tycoon was determined to hang on the Jidda Agreement at all costs, it became necessary for the CIA, through Maheu, to intervene behind the throne. Accordingly, Maheu and Gerrity journeyed separately to Jidda, where Maheu says he presented evidence that the agreement had been reached through bribery most foul.

That this so-called proof of bribery was obtained from Catapodis seems very likely. Constantine Gratsos states flatly that Catapodis was himself bribed to play the part he did. "He was a legendary, a monumental gambler," Gratsos says, "and always in debt. Of course he was bribed!"

Asked about that, Gerrity shrugs: 'I don't doubt it. We were playing rough."

Whatever Maheu said to the Saudis, it worked. The country's new king (old ibn-Saud had died shortly before the Jidda Agreement was signed) ordered Onassis to meet with representatives of the Aramco companies and to resolve the differences between them. If concord could not be reached, the new Saudi minister of finance would "arbitrate" the matter. That would hardly be to Onassis' advantage, since the agreement had been negotiated with the previous finance minister, who, as it happened, had been forced out of office shortly after Maheu's arrival in Jidda.

Onassis met with Aramco representatives, as ordered, and the Jidda Agreement was broken.

And suddenly, Onassis' problems faded away. Catapodis' various lawsuits were dismissed in the courts for lack of jurisdiction and lack of evidence. The wire taps and bugs were deactivated. The surveillance ended. The press relented in its attacks. Gerrity's assignment was over ("After that," he says, "I went out to California to work on some local elections for Hughes). The Peruvian fighters folded their wings.

Even Burger's Justice Department suit went by the boards. Ostensibly, the consent agreement signed by Onassis and the Feds required the tycoon to pay $7,000,000 damages--a substantial judgment. According to his attorney, however, Onassis never really had to pay anything out of pocket. "It was all done with mirrors," Ed Ross says, "to make Burger look good. The settlement didn't cost Onassis a cent. It was just a face-saving gesture." Fittingly, it was Burger's last such gesture as an attorney. In June 1955--the same month Onassis and Aramco sat down to begin dismantling the Jidda pact--he was appointed to the country's second most prestigious judicial forum, the District of Columbia Court of Appeals.

The only remaining thorn in Onassis' side was the oil companies' boycott against his ships, and that, too, worked out to his advantage. In the summer of 1956, history intervened to make Onassis richer than he had ever been, when Egypt decided to nationalize and then to close the Suez Canal. Closing Suez forced those shipping oil from the Mideast to send it around the Cape of Good Hope, tripling the time required for transit and, therefore, the number of tankers needed to supply the Western world with oil.

Onassis' fleet, thanks to the boycott, was the only one available to fill the gap created by the closing of Suez: His competitors, having taken advantage of the ostracized Onassis, were locked in to long-term shipping contracts at what soon became "the old rates." Onassis quickly used this advantage to compensate for his difficulties, hammering out contracts that escalated the price of carrying oil from $4 to $20 per ton.

In the end, the anti-Onassis plot was both a failure and a success. While it failed by a quirk of history to bankrupt Onassis, the campaign did succeed in destroying the hated Jidda Agreement.

•

The episode was over. And yet serious questions remained--not the least of which was: Who had used whom? It is evident that the CIA was a mere pawn of the multinationals throughout the conspiracy's unfolding. The question is whether genuine national-security matters were at stake or whether the CIA was used to legitimize a conspiracy whose purpose was to favor one group of businessmen over another.

If it was a legitimate national-security operation, one would expect it to have been approved by the National Security Council. And yet, according to Republican leader Harold Stassen, a member of the NSC during this period, there was never any mention of Onassis at NSC meetings. The significance of this is that the operation may have been a national-security matter in the minds of Nixon and his cronies but not in the minds of those responsible for deciding such things at the time.

What appears to have happened is that Nixon circumvented established intelligence channels to run an attack upon Onassis, somehow persuading the CIA to cooperate in his adventure--much as he would later circumvent the NSC while President, setting in motion the notorious Track II operation against Chilean president Salvador Allende.

In talking with Gerrity, Staten and some of the other spooks who waged the battle against the Greek tycoon, images of Watergate are impossible to avoid. Each of the Maheu operatives recalls the overwhelming emphasis his superiors placed on the "national security" aspect of the operation.

"We were always being reminded," Staten says, "that the CIA was behind the operation, that it was Government work. Maheu told us that over and over." A similar refrain would be heard almost two decades later by Cuban exiles planning to burglarize the Democratic National Committee headquarters: That, too, would be a "national security" matter.

Finally, there is the question of others' complicity in the affair. Besides Nixon, Gerrity says that Burger was also aware of the operational details and that he discussed the Onassis conspiracy with Burger at a private home in the Washington area. "I don't know how much Burger really grasped about it all," says Gerrity, "but I can remember what he said to me, the exact phrase: He said he'd take 'judicial oversight' of my activities with Maheu. The hell he would! He was getting reports regularly from the CIA and the FBI on everything relating to Onassis, including what Maheu and I were doing."

Asked if Burger's knowledge would have included information from the possibly illegal wire taps, Gerrity shrugs and says, "Everything."

In lieu of talking to Burger these days, one talks to Barrett McGurn. Formerly a foreign correspondent for the now defunct New York Herald Tribune, McGurn left journalism to serve his country as an information officer in Vietnam and subsequently as press liaison for the Chief Justice in Washington.

Told about the anti-Onassis plot masterminded by Maheu, Nixon and Niarchos, McGurn expressed amazement and pleaded ignorance of the tale. He recalled that Burger had won accolades for his handling of the Justice Department suits against the Greek shipowners, but of the larger operation he said he knew nothing. Told then that a source claims to have kept Burger informed of the anti-Onassis plot during Burger's sensitive negotiations with attorneys for Niarchos and Onassis, McGurn again professed astonishment and promised to ask Burger if that were true.

The following day, McGurn had Burger's replies. According to the information officer, "The Chief Justice received no CIA reports about Onassis during the 1954--1956 period. He held no conversations with Nixon about Onassis. And neither did he speak with Maheu on any matter at that time. He had no knowledge of any parallel operation against Onassis--contrary to what your source says."

Who, incidentally, was my source? McGurn interjected. As I had not yet received permission to name my source, I promised to get back to McGurn.

A few days later, I lunched with Gerrity at a restaurant near the White House. Over Welsh rarebit, white wine and cognac, we discussed the Onassis affair until late in the afternoon, talking of Nixon and Burger and of Gerrity's adventures in London and Rome. Gerrity mentioned, apropos of nothing in particular, that while in the latter city, he had met a fellow reporter who had been nice enough to show journalist-spook Gerrity around the Eternal City.

"The reason I mention this," Gerrity said, "is that the whole Onassis thing is wheels within wheels. The guy I'm telling you about, the reporter, is Barrett McGurn--you know him? He's Burger's flack now. Great guy. In fact, I just spoke to him a couple of weeks ago, about a personal favor."

When asked about Gerrity, McGurn again pleaded ignorance, though he added that it's "very possible" that he may have spoken to Gerrity recently and may even have known him in Rome. "I get 400 calls a week here at the Supreme Court--I can't remember every one of them. It's possible he called. It's also possible that I showed him around in Rome. I showed lots of reporters around: I was president of the [foreign press club]."

But, McGurn insisted, he was in Paris rather than Rome throughout 1954 and the first eight months of 1955 (coincidentally, the precise duration of the anti-Onassis plot); if he had met Gerrity, it could not have been in Rome during that time. McGurn then ended the conversation on an acid note.

"Do me a favor," he said.

"What's that?"

"When you see Gerrity again--give him my regards and tell him thanks."

•

The ambiguities remain after nearly 25 years, and the questions they suggest are sufficiently complex as to be worthy of a John le Carré novel. It is not enough, for instance, to speak of someone being someone else's "pawn." In the anti-Onassis operation, there were chains of pawns. At the lowest level were Frank's "three Remsons" and Gerrity's spooks in white flannel. Above them were Frank, Gerrity and the rest of Maheu's Mission: Impossible team, themselves no more than dragoons, ostensibly in the service of Niarchos.

Here the atmosphere became even more rarefied and the "chains of command" took on a twilit aspect. If Nixon did circumvent the National Security Council while presiding over what he claimed was a national-security operation, it would mean that the CIA was little more than his private-policy instrument. But what of the relationships among Nixon, Niarchos and the multinational oil companies? Who got what from whom? The likelihood is that all of them were exploiting one another: Nixon and the Republican Party needed the multinationals' money; the multinationals needed their monopolies; and Niarchos--besides his hatred for Onassis--needed to escape the threat of imprisonment. In circumstances such as those, everyone is a pawn--and no one is.

And what of Warren Burger, the man who would go on to become Chief Justice of the United States? That he played a strategic role in the conspiracy against Onassis is undeniable, but exactly what did he know and when did he know it? Was he aware of the larger plot, or was his role somehow innocent and ordinary?

The questions are important, because they involve matters of ethics and of law. Clearly, Onassis' rights were savaged throughout that time of litigation: The victim of wire taps, surveillance and calculated defamation, the tycoon could hardly be said to have gotten a fair shake from the U. S. Government. But was Burger cognizant of those attacks?

Burger, speaking through McGurn, disagrees with Gerrity about conversations they may have had; but what of Burger's other conversations? What, for instance, of those talks between Burger and Niarchos' chief attorney, L. E. P. Tylor? That Tylor knew of his client's relationship to the Maheu agency is apparent, since it was Tylor who made the initial call to the Maheu office that set the New York wire tap in motion. If the Onassis operation was, indeed, a national-security matter, as Nixon and others insisted, it is hard to imagine that Niarchos' attorney failed to mention his client's patriotic role to Burger: It might, after all, mitigate Niarchos' jeopardy before American courts.

Moreover, should push have come to shove in the Federal cases against Niarchos and Onassis, might not the CIA's activities--through cut-out Maheu or through officers Donahue and Dimaggio in Rome--have been exposed during trial? That possibility alone would seem to have been sufficient reason for Tylor to inform Burger of the anti-Onassis operation.

As for Nixon, his involvement in the plot remains undisputed by every source east of San Clemente. A call to Colonel John Brennan, Nixon's major-domo and "spokesman" at Casa Pacifica, elicited a terse refusal to put any questions to his boss. Told that one would like to get both sides of the story, Brennan interrupts venomously: "I know the routine, and we'll take our chances." End of conversation.

The question, however, is not whether Nixon was involved but why. National security appears to have been more an excuse than a serious justification. Less wholesome motives, however, are by no means certain. Financial contributions to the G.O.P. might have been a motive, but there is no reliable way to determine that. Still, Nixon undoubtedly won some powerful allies through his role in the conspiracy: Years later, he would become the head partner in the law firm of Mudge, Rose, Mitchell, Guthrie and Alexander; along with Tylor, the Mudge, Rose firm represented Niarchos in his 1954 negotiations with Burger. Was it a coincidence that Nixon should find such a lucrative home there in the years when he became politically hors de combat? Perhaps. Perhaps not.

The answers, then, are obscure, but the questions deserve to be asked. The primary players--all but Onassis--are with us still. The alternative to understanding their relationships to one another in the seminal years of the Fifties is to resign ourselves to the continued existence of a secret history that certifies an enduring civic ignorance. And that, of course, can only lead to the emergence of a multinational raj, a country whose borders are marked not by mountains and rivers but by the clandestine flow of laundered currencies and the secret transit of company spies.

"The Onassis indictment caused a sensation in the press. As the plotters had planned."

"Like the Watergate burglars, the Maheu team was no ordinary band of fly-by-night gumshoes."