Los Gatos

 
Malcolm Harris, Palo alto : a history of california, capitalism, and the world 
written by Malcolm Harris, 2023

p.427
  In 1983, no one batted an eye when a rich Iranian immigrant and a recently retired air force intelligence officer joined  to form a vague company called Stanford Technology Trading Group (STTG), registered in Los Gatos, california.  That was the most normal thing in the world. 

pp.428─438
p.429
Albert Hakim
In the 1970s, one fast-growing market for HP was the shah's Iran, which had a number of uses for HP's signal and communications technologies.  HP's sales agent for the country was a man named Albert Hakim.  He was connected to the head of the Iranian air force ── who happened to be the shah's brother-in-law ── which made Hakim a central conduit to the biggest and most lucrative American arms market.  He called his American company Stanford technology corporation (STC), 

p.429
Project Ibex was an American operation designated to turn Iran into a forward base for signals intelligence into the Soviet Union and the Afghanistan battlespace.  Whereas Hakim had been dealing in multimillion-dollar projects, Ibex was magnitude bigger ── $500 million, and that was the starting price (it soon doubled).  

p.429
Hakim's specialty seemed to be knowing whom to bribe.
The lead contactor for Ibex was a firm called Rockwell, but HP got what Computerworld called a substantial subcontract.61
The industry paper reported on the fishy deal after three American Ibex contractors were shot at point-blank range in Tehran.  In 1979, with impeccable timing, Hakim immigrated to the San Franciso bay area and bought at $500,000 house.62

p.429
Frank Terpil
Ed Wilson
legally restricted radar jamming system to Egypt's Anwar el-Sadat
set up computer intelligence systems for Idi Amin (Uganda) and Muammar Gaddafi (Libya). 
services: electronics systems, small arms and explosives, assassinations
training of internal security forces, 
20 tons of C-4 plastic explosives.63
p.430
Wilson got busted selling the code from a satellite imaging system meant for Iran ── repackaged as agricultural technology ── to the Soviets. 
The CIA and STC both cut Terpil and Wilson loose, backdating the end of the relationships, 
Wilson was caught and jailed in 1982, but he went free in 2004, after a court concluded that the CIA, countrary to its attestations during the trial, remained in contact with Wilson during his activities. 
Instead of imprisoning or blacklisting Albert Hakim, the CIA gave him a new partner.65

p.430
   In the mid-1970s, the deeply unpopular U.S.-aligned Somoza regime in Nicaragua came under assault from a left-wing coalition called the Sandinista National Liberation Front (FSLN).  For the hard-core anticommunists, it was vitally important to prevent the establishment of a Red beachhead in Central America.  From there it was only a few borders to California.  At the same time, Somoza was no better a leader for his people than the new world order model asked him to be, and his people didn't have oil reserves to cushion the blow.  An earthquake wrecked the capital, Managua, in 1972, and Somoza channeled hundereds of millions of dollars in aid into his own pocket while Nicaraguans suffered.66
The American right wing, coming into its own at the time, tracked the developments in Nicaragua closely, and it was worried.  When Carter took office, in 1977, Stanford Technology/CIA ── correctly fearing that the new president would cut off military aid to Somoza ── made contact with the dictator through another shell company and Ed Wilson, offering a security package including Cuban expat bodyguards, in-country trainers, and the same search-and-destroy assassination program it built for the shah.  Somoza quibbled about the no-doubt-inflated price until the beginning of 1979, when it was already too late. 
   In the Bahamas, where Somoza fled, he met with Stanford technology point man and Bay of Pigs leader Chi Chi Quintero, and they agreed to continue the collaboration with STC, only now with the aim of overthrowing the government of Nicaragua rather than bolstering it. 

p.431
But Nicaragua also became a line in the sand for liberals, who were sick of the CIA operating its own foreign policy, which for some reason always seemed to involve supporting authoritarian torture squads.  The Sandinistas won fair and square, and by most accounts they were better leaders.  Congress fought the incoming Reagan administration's efforts to restore Somoza. 

p.431
Richard Secord
Dick Secord 
In 1983, the CIA sent Hakim another “retired” operative named Richard Secord.   THe fifty-year-old Secord was a career military man, and he moved up the ranks rapidly, thanks to his facility with covert operations.  

p.431
Secord left the military as a major general and an assistant secretary of defense, in which capacity he was responsible for covert actions in the Middle East, Africa, and South Asia, which included the Ed Wilson shenanigans.  

p.431
Operation tipped kettle, a deal with the Israelis to ship over $15 million in Soviet-made weapons confiscated in Lebanon to the contras in Nicaragua via a private channel.67  
In 1983, Hakim hired Secord at STC, and they cofounded Stanford technology trading group international [STTGI] subsidiary as, of course, a joint-stock company.  They split the shares 50-50.68

p.432
Secord denied not only his own participation, but the existence of any commercial opium operation in Laos during the period.70
Heroin was valuable per kilo, and drug smuggling helped keep costs down, though clearly not down far enough to win the war. 
Major general Secord considered himself an expert in counter trade, large-scale barter-swaps involving cash substitutions, 

p.432
Meanwhile, Congress cornered the Reagan administration on Nicaragua, banning CIA money, and then, when the White house used National security council money instead, banning all money.  HOw do you fight a war with no money?  HOw do you get a war to build itself, the way a railroad does? 

pp.432─433
This was the kind of plausibly deniable operation the pro-contras in the American government needed, and the CIA director, Bill Casey, assigned a newly promoted lieutenant colonel on the NSC staff named Olive North to coordinate the operation with Hakim and Secord.  
p.432
Since the White house couldn't spend American money, the feds leaned on allies to pitch in, particularly the extravagantly wealthy authoritarian leader who depended on U.S. support.  The biggest contribution came from King Fahd of Saudi Arabia, who donated $32 million to the contra cause, followed by $10 million from the sultan of Brunei and a couple million bucks from Taiwan.72
Smaller amounts came from South Africa and the Republic of Korea, and nonmonetary assistance for the project came from Israel, Chile, Singapore, Venezuela, England, Panama, Honduras, El Salvador, Guatemala, and Costa Rica.73  
Hakim was an expert at Swiss banking, having spent years in Geneva at Hewlett-Packard, and he handled finances for what became known as the Enterprise.  
pp.432─433
With Secord, Stanford Technology was full-service; it even worked out logistics to get guns from contra warehouses near Costa Rica to the frontline troops. 
p.662
72.  Lawrence E. Walsh, Final report of the independent counsel for Iran/Contra matters, vol. 1, August 4, 1993, 196. 
73.  Ibid.

p.433
It was Shultz's idea to approach Brunei, though he ended up sending his deputy, Elliot Abrams, to make the ask.*  
The contras got another $10 million from the Medellin drug cartel, which though not technically a country, was definitely capitalist and preferred the contras, who were full of drug traffickers, to the Sandinistas, who were commies.  Besides, using the same Central American airfields as the CIA had its advantages. 
p.433
Robert Owen
   The first American official to put down on paper that the contras were trafficking cocaine was a young man named Robert Owen, and though we haven't met him, we already know him in the abstract.74 

p.433
Robert Owen
Still he found ways to be useful to the right, starting in the office of the conservative senator Dan Quayle, who was close with the CIA director Bill Casey.  
pp.433─434
That's how Own ended up the courier for Oliver North.  His entrepreneurial cover was a 501(c)(3) nonprofit he created called IDEA ── the Institute for Democracy, Education and Assistance ── which received a government grant to administer humanitarian aid in Nicaragua.
p.434 
In reality, Owen became North's errand boy, flying to the rebel camps to take weapons orders and de facto representing the National Security Council to the anticommunist militia.  

p.434
it wouldn't have taken a counter trade expert such as Secord to realize that flying empty planes back to the United States after dropping off supplies was a missed opportunity.  The Medellín cartel was already using a route north through the area. 

p.434
   One reason the money didn't go to the contras is that the traffickers weren't really freedom fighters; they were drug traffickers.  But another is that, thanks to international donations, profits from other weapons sales, and misappropriated American government funds, the contras were in good financial shape. 
While their supply requirements stopped out at around $2 million a month, Stanford Technology and related schemes look to have channeled nearly $100 million to them in a couple of years, more than twice what was needed.76 
p.662
76.  Jeff Gerth and Stephen Engelberg, “Millions untraced in aid to contra over last 3 years”, new york times, april 8, 1987. 
77.  Ibid. 

p.435
As adepts of the free market they couldn't let money rot in a bank account, so they invested the surplus in short-term certificates of deposit, pumping it back into the financial system.77  
A lot of it simply disappeared.  
p.435
Hakim and Secord got their biggest deal acting as a new back channel between the West and the new regime in Iran.  The CIA director, Bill Casey, became convinced it was a good idea to sell the ayatollah $12 million worth of missiles to fight Soviet supplied Iraq, prompted by the Israelis, who wanted to see the regional rivals continue to their fight to mutual self-destruction.78 
It was standard for Hakim's group to mark up goods, but for official enemy Iran, they went out of their way, netting a whopping $16 million in profit, of which only $3.8 million was channeled to the contras effort.79
[[ Iran-Iraq war: Iran and Iraq was fighting each other; Iraq, it appears, to be supported by the Soviet; Iran was looking for arms to continue the fighting. ]]

79.  Joe Pichirallo, “Middlemen said to have siphoned off millions meant for contras”, Washington post, November 19, 1987. 

p.435
Iran-Contra was a clever scheme to get funds to Nicaraguan freedom fighters at low or no cost to the taxpayers, contravening the spirit of the law but adhering to a deeper, more important spirit of American ingenuity and loyalty.  Besides, how could North and his team be supporting Iran if they were price-gouging the government? 

p.435
THe expert Hakim, who understood how expensive college was getting, worked with North's wife to set up a fund for their children.  
─“”

pp.436─437
   It's no challenge to locate conspiracies within this global network of arms dealers, dictators, and capitalists.  The most famous was the one sketched by San Jose Mercury News report Gary Webb, who connected the Los Angeles─centered crack cocaine epidemic to the blind eye the feds were turning to contra-aligned  smugglers.82
Via the diluted rock cocaine, anticommunistss enlisted the country's declining ghetto economies in the Cold war struggle, roping poor black and brown Americans into the Third world drugs-and-guns circuit. 

p.438
But the structural connection goes deeper than that.  Palo Alto's new tools were suited to this new form of social war.  It's not a coincidence that Albert Hakim worked as an HP sales agent; it's a confluence.  “One of the most intriguing things that [Oliver] North did was to establish his own worldwide communication network ── secret and totally secure”, write Martin Anderson, admiringly.  “From virtually anywhere in the world ── from Nicaragua or Honduras, from Europe or the Middle East, from any part of the United States ── his colleagues and coconspirators could send messages to one another in unbreakable code.”84  Here was the real human augmentation, a gadget that allowed 15 people to run a shadow world government:  a portable, folding computer. 
[[ GRiD laptop computer, clamshell, plasma screen, black magnesium casing, proprietary encryption chips, remote dial-up capability ?]] 
   To connect his intercontinental cabal, Oliver North used a top-of-the-line device, a set of some of the first laptops, produced by the venture-funded Xerox PARC spin-off GRiD systems corporation, the first to fit a portable computer into a briefcase.85  
This slick black computer with a clamshell plasma screen was too expensive for all but the most elite businessmen, but the National Security Agency saw it as a good deal and paid extra to wire in proprietary encryption chips.  
North commandeered 15 of the devices and setup a remote access network connecting the capitalist insurgency.86  
Despite the high-margin computers involved, for the fed it was a bargain, the bargain that could pull capitalism out from between wage-price inflation and its private shareholders got rich when one of the big computer firms ── Tandy ── purchased the company in 1988 for over $50 million in stock.87
Everybody involved paid a small capital-gains tax.
The computers were made in Mountain View in the South bay, probably at least in part by Vietnamese refugees.  It was game over:  American won the Cold war, and Silicon valley invented the personal computer. 
84.  Anderson, Revolution, 397.
85.  Alan J. Weissberger, “Pioneering the laptop:  engineering the GRiD compass”, report on Grid compass panel at the computer history meneum (arch 15, 2006), the special interest group for computing, information, and society, https://www.sigcis.org/weissberger_grid_full.
86.  Ibid., 397─98.
87.  “Tandy to buy Grid systems”, New York Times, March 17, 1988. 

   (Palo alto : a history of california, capitalism, and the world by Malcolm Harris, 2023)
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