Bain, Romney, the CIA and (God help us) Howard Hughes (UPDATED -- A mystery solved)

Well well well. Turns out Romney was the head honcho of Bain Capital for at least three years longer than he has long claimed. Previously, he told us that he quit Bain in 1999.

And a Massachusetts financial disclosure form Romney filed in 2003 states that he still owned 100 percent of Bain Capital in 2002. The state forms also show that he earned at least $100,000 as a Bain “executive” in 2001 and 2002. A former SEC commissioner told the Globe, “You can’t say statements filed with the SEC are meaningless. This is a fact in an SEC filing.”

So why would he lie about such a thing? There is something decidedly odd about Bain.

In a previous post, we tentatively explored the possibility that Mitt Romney formed Bain Capital (a spin-off from the original Bain group), at least in part, as a money-laundering front for spies, back in the days of clandestine wars against the Nicaraguan contras and the FMLN of El Salvador. Turns out I wasn't the first to think along these lines -- see, for example, the 2011 thread here and the January, 2012 post here.

My own inquiry began with Vanity Fair's revelatory piece, which notes that early Bain investors included publishing magnate Robert Maxwell -- whose Mossad ties have been established beyond the point of reasonable debate -- and the Poma family of El Salvador, one of the "14 families" supported by the CIA during that nation's civil war.

Most responses to the VF piece focused on Romney's penchant for hiding taxable income in offshore accounts. That's important, but I'm more interested in the Central American connection.

In 2007, Romney gave a speech filled with his usual blather: "Jimmy Carter told us that our problems were the fault of the American people..." (No he didn't. No politician would ever say that. Romney must think his listeners are rubes.) Toward the end of the speech, the Mittster listed the guys who helped to get Bain Capital going:

My partners were Ricardo Poma, Miguel Duenas, Pancho Soler, Frank Kardonski, and Diego Ribandinarea.

We have already discussed Poma. He was one of the founders of the fascist ARENA party of Roberto D'Aubuisson -- a party that ran the death squads which ruthlessly murdered anyone who challenged the oligarchy's control. The CIA aided -- arguably controlled -- the death squads.

Miguel Duenas hailed from another of the 14 families; in fact, the Duenas clan may have been the worst thing ever to happen to El Salvador. It turns out that Miguel Duenas -- I presume that we're dealing with the same fellow -- ran the Banco Commericial of El Savador, which  determined which farmers would and would not get credit. A nice little arrangement, this was; the Duenas family used it to control a massive share of the country's cotton and coffee production. In a country where small farmers had once been allowed to own and work their own land, the Duenas clan expropriated their fields and reduced the farmers to near-slavery. The National Guard kept the serfs in line.

One of the most interesting names on our list is the late Frank Kardonski. Born in Panama, he created the Panaminian Stock Exchange, owned Tower Bank, and did much to promote Panama as a place of foreign investment. Of course, during this period (the 1980s), Panama became a haven for anyone hoping to launder drug loot.

Here's the bit I like best:

In 1990, Kardonski’s family bought Key Biscayne Bank from Charles “Bebe” Rebozo, a longtime Key Biscayne resident and longtime friend of former President Richard Nixon.

Bebe Rebozo was the president's hideously mobbed up pal, and his bank was a notorious haven for mafia money. Is the bank still used for such purposes? I don't know. Perhaps readers in Florida can tell me more.

(A younger man named Frank Kardonski -- who may be related to Romney's old pal, judging from the facial resemblance -- runs an airline that operates between Florida and Central America. Readers of Daniel Hopsicker will no doubt raise an eyebrow.)

"Diego Ribandinarea" should actually be spelled Diego Ribadeneira. I believe that Romney's reference goes to the Diego Ribandinarea who became Ecuador's ambassador to Peru and previously served as foreign minister. I've seen no derogatory information about this guy. Of course, the CIA has a long history in Ecuador; see here and here. In 2008, the president of Ecuador, Rafael Correa, charged that that the CIA controls that country's military intelligence service and much of the police. Judging from the brief bio here, Ribadeneira seems to have devoted his life to diplomatic service, not business -- so it's a little odd to see Romney mention him as the co-founder of an American venture capital firm. (Could we have the wrong Diego...?)

The only online reference to Pancho Soler -- another offspring of the El Salvadoran aristocracy -- occurs in this rather wild tale, set in the 1970s, when Pancho was a young Harvard grad and good friend to the son of the brutal (CIA-backed) Nicaraguan dictator Anastasio Somosa. The story concerns Howard Hughes, who made a bizarre journey to Nicaragua after being "kidnapped" from his infamous Las Vegas hideaway.

(Sources differ as to whether Hughes left voluntarily. At roughly the same time he changed lodgings, the Bond film Diamonds Are Forever was shot in Vegas. In that movie, bad guys kidnap a millionaire obviously modeled on Hughes. In other words, life and art imitated each other simultaneously.)

Help, readers, help! I'd like to contact the author of the above-linked story, Gordon Fischer, and ask him if he can tell me more about Soler. Unfortunately, Fischer can be reached only via Facebook -- and as you probably know, I just don't do Facebook. If you do do FB, could you drop Mr. Fischer a line and tell him of my interest in Soler? My email address is in the upper right-hand corner of this page.

Here's where things get really weird. As noted above, I'm not the first person to wonder if Romney is "spooked up." Alas, most of the writers who have offered such speculation publish on websites that most respectable writers would hesitate to cite. (Then again, many respectable writers would hesitate to link to Cannonfire. C'est la vie.)

A typical example may be found here, on a web page festooned with all of the usual wacky conspiracy cliches. You'll see references to the Illuminati, David Icke, Henry Makow, Satanic Ritual Abuse, survivalism and a whole bunch of other crap that makes me sigh and roll my eyes like Al Gore during the first debate. The proprietor of that site, one Paul Drockton, "states Gold and Silver the ONLY Protection During Financial Collapse." Guys like Drockton have been issuing similar statements, in a similarly illiterate fashion, since I was a kid in the 1960s.

Nevertheless, oddball web sites can sometimes provide good leads. Example:

Mitt Romney, for example, has very close ties to a high-level agent from Israeli military intelligence, the woman he made CEO of Bain & Company.

This reference goes to Orit Gadiesh, who was part of Romney's gubernatorial transition team. She joined Bain & Company (the precursor company to Bain Capital) in 1977, at the tender age of 26. Before that, she was the assistant to Ezer Weizman, the Israeli Minister of Defense and later President.

The Gadiesh/Romney association has, predictably, inflamed vulgar anti-Semitic sentiments; examples may be found here and here and here. I think it is possible to distance oneself from the bigots while also confessing that, yes, Gadiesh really is pretty damned spooky.

Our "kooky" friends have given us other leads worth pursuing. For example: Did you know that the Managing Director of Bain Capital (between 1989 and 2002) was Robert C. Gay?

Conspiracy buffs of an earlier generation knew that name well, since Gay's father was Frank William "Bill" Gay, the Chief of Staff for Howard Hughes during that strange period when the spooks more or less took over the Hughes operation. Bill Gay hired the infamous "Mormon Mafia" that insulated Hughes from the outside world.

(What's that? You didn't know that spooks took over the Hughes empire? Then you really must read Michael Drosnin's Citizen Hughes, which offers a hilarious depiction of how, during this period, Hughes made life miserable for his "agency" babysitter, Robert Mayheu. The latter's company, Mayheu & Associates, had previously inspired the Mission Impossible TV show. As for Drosnin himself -- oh, don't get me started!)

And that brings us to...

The Hughes thing. Folks, you have no idea how much I do not want to talk about Howard Hughes. I've put off writing this very post for days because the prospect of diving into a big steaming toxic vat of Hughesiana just seemed so bloody depressing.

In previous decades, Howard Hughes inspired enough bizarre speculation to fill the Sedan Crater. Alas, he does not intrigue the current generation the way he fascinated your grandparents. The few who do care about Hughes nowadays tend to be weird and disagreeable people, even by conspiracy buff standards, and I don't want to get into any online debates with that lot.

But, but, but...

God damn. It's just inescapable. Every time you look into Mitt Romney's associations, you keep running into Howard's ghost. Just look at what we have seen so far:

1. Soler. Bain Capital co-founder Pancho Soler apparently had something to do with arranging Hughes' sojourn in Nicaragua in the 1970s. (Side note: Did you know HH was there for the big 1972 earthquake? A long time ago, the L.A. Times claimed that the poor old guy rode out the big one bouncing around in the back seat of a car parked on a Managua side street.)

2. Kardonski. Another Romney partner, Frank Kardonski, took over Bebe Rebozo's old mafia bank in Key Biscayne. As this bio puts it:

One of the ways that Rebozo helped Nixon was to obtain large campaign contributions from Howard Hughes.

Long story there. You already have the gist of it.

3. The Gays. As noted, Bain's Managing Director was the son of the guy who managed Hughes' business affairs -- during the time when American spooks were quietly taking over the day-to-day running of Hughes' company. As we shall see, Frank "Bill" Gay controlled much of Hughes' money after the old man's death. The importance of this fact will soon become clear.

But before we get to that, let's add to our list of Romney/Hughes links:

4. Morse. Frank Morse ran a Bain company.  He is -- not to mince words -- a CIA-friendly attorney who represented Howard Hughes during the key period described above. After that stint, Morse worked for Adnan Kashoggi and Larry Kolb, the agent for Miles Copeland who got close to both Khashoggi and Muhammed Ali. (I've corresponded a bit with Kolb, who describes his adventures in a fascinating book called Overworld; see these previous posts. An interesting guy, to say the least.) Nowadays, Morse is working with Robert C. Gay.

5. Bennett. Robert Bennett, now a Senator, has close links to Mitt Romney, as discussed in this previous post. Bennett previously was a CIA guy, running a front company called Mullen & Co.

The famous (or should-be-famous) Lukoskie memo, uncovered by writer Jim Hougan and published in his book Secret Agenda, reveals that Bennett was a source of Watergate-related information for Bob Woodward -- who, suitably grateful, kept the CIA out of the Washington Post's Watergate coverage. (The CIA's fingerprints are all over Watergate, if you look closely.) Hougan thinks that at least some of the "Deep Throat" information came from Bennett, not Mark Felt. To this day, Woodward doesn't like to talk about his interactions with the spook who became a senator.

Bennett, almost needless to say, played a key role in the saga of Howard Hughes. When given the opportunity to work for Hughes, Bennett shut down Mullen & Co. in less time than it took you to read this sentence. While employed by Hughes, he...

...well, I'm still not entirely sure what Bennett did on a day-to-day basis. Although Bennett held the title of Public Relations Director for Summa, Hughes' company, he seems to have done a remarkably lousy job. The only publicity Hughes got in those days was negative. Evidence indicates that Bennett helped to arrange Project Azorian, which used a Hughes ship, the Glomar Explorer, to raise a sunken Soviet nuclear submarine.

There are even more Romney/Hughes connections. Right now, though, you must be asking: What does it all mean?

To be honest, I've not been able to dope out the reason why so many Romney/Bain associates have histories going all the way back to the weird world of Howard Hughes. Maybe we're looking at a surreal chain of coincidences.

Drockton's theory: One guy has tried to cobble together a theory that ties it all together: The aforementioned Paul Drockton.

As noted earlier, I'm quite wary of conspiracy buffs like Drockton; he inhabits a world in which I do not feel comfortable. That said, we must give credit where due: His Theory of Romney -- or should we call it a Theory of Hughes? -- just may hold water. At the very least, I hope his work will inspire further research. [Update: Turns out it doesn't hold water very well at all. Please see the additional material at the end of this post.]

That theory -- which you can read here -- is pretty simple: The Mormon Mafia looted Howard Hughes' holdings after the old man died. Bain may have provided a mechanism for the Big Howard Hughes Snatch Job.

In 1953, Hughes -- hoping to do an end run around the IRS -- transferred his stock in Hughes Aircraft to the charitable Howard Hughes Medical Institute. In 1985, GM bought Hughes Aircraft from the Institute for more than five billion dollars.

You'd think that Hughes Medical would now be one very well-heeled charity. But you'd be wrong. Ten years ago, its holdings had dwindled to $15.8 million. (Or so says Drockton.) During that time, the Institute was under the management of our old friend Bill Gay, who died in 2007.

A lot of dough seems to have slipped through that guy's fingers. Oops.

Drockton asks: "How much of the Medical Institute's money was managed by Bain Capital?" It's a fair question. As you may recall, during this time period the managing director of Bain was Robert C. Gay, Bill Gay's son. It's not out of the question to suppose that Dad invested the money with sonny-boy.

One of Bain's specialties is the derivatives market. Drockton avers that Hughes Medical lost its cash in -- you guessed it -- the derivatives market.

As Drockton puts it:

Remember, there is always a winner and a loser when it comes to futures contracts.  Betting on the wrong side of things can transfer 4.8 billion dollars in no time at all to a third party.

Right now, I don't see any hard proof for Drockton's theory. I see indications, but I don't see proof. Still, the possibility is dazzling: Did Mitt Romney and his buddies get rich(er) by robbing the Hughes inheritance? If not, then what the hell did happen to one of the world's great fortunes?

In one of his memos, old Howard spoke at length about how one can always trust Mormons, because, y'know, they don't drink or or smoke or cuss. Whenever I think of that memo, I break into my impression of Heath Ledger as the Joker...

Heh. Heh heh heh. Ha. Ho. Hee hee hee. Heh.

Added note: I've done a little further research since this post was originally published. Drockton does not give proper sourcing for his claim that Hughes Medical lost most of the $5 billion it got from the GM deal. A 60 Minutes story from 2009 states that Hughes Medical is now worth more than $12 billion. Perhaps Drockton can explain this discrepancy...?

Update 2: The mystery solved!  I wrote to Drockton asking him to explain why CBS had a number that varied drastically from the one he used. Drockton -- who was very nice, and whom I hate to embarrass -- responded by sending me a pdf copy of the 2001 annual report of the Howard Hughes Medical Institute.

Turns out Drockton made a simple mistake.

On page 40, the total assets of the HHMI are listed -- "in thousands." Drockton didn't notice the words "in thousands." Thus, the number 15,811,093 actually represents nearly $16 billion. Subtract the liabilities and commitments, and that leaves us with net assets of $11.5 billion -- which means that CBS got it right.

So if you want to know where ol' Howard's money ended up, it's right here in Maryland, home of the HHMI. And it seems to be in good hands.

Was any of it ever invested with Bain? I don't know. If it had been, HHMI might have ended up like KB Toys.