Well while we are putting alternate theories out there, here's one to blow your mind, I've posted it before......
“THE MEXICAN CONNECTION
Mid-1947 marked a turning point in the FBN’s collaboration with the espionage Establishment. With only token support from the Truman administration, the Nationalists’ war with the Communists was faltering, and in Thailand a war had erupted between the police and army over the opium trade.
Then a registered foreign agent for the Thai government, former OSS chief William Donovan traveled to Bangkok to unite the squabbling factions in a strategic alliance against the Communists.
The Nationalist Chinese who served as middlemen in the production and transportation of narcotics from Thailand to Hong Kong, Macao, and “and other Asian markets, benefited greatly from Donovan’s intervention.
Concurrently, a delicate, drug-related national security situation had developed in Vietnam. During the war, Iran, with the knowledge of its American financial advisors, had shipped tons of opium to the Vichy French in Saigon.
Pressed by Anslinger, France in June 1946 pledged to disengage – but after the Viet Minh launched their insurgency a few months later, France, with America’s tacit approval, continued to trade opium to help finance its counterinsurgency.
Helping to manage public perceptions in this regard was former ambassador to France and Russia William C. Bullitt. One of several diplomats linked to smuggling in the post-war era, Bullitt journeyed to the Far East as a reporter for China Lobby activist Henry Luce.
10 A feature article Bullitt subsequently wrote for Life Magazine slammed Truman for not supporting the Nationalists and provided the Republicans with the enduring “Truman lost China” theme which they used to bash the Democrats. Bullitt, meanwhile, was dining regularly in Paris with Vietnam’s playboy Emperor “Emperor Bao Dai, an opium smoker who relied on opium profits to finance his decadent regime.
In secret the government rationalized its protection of the drug-smuggling Nationalists by insisting that any consequent health problems were confined to the Far East.
But by mid-1947, Kuomintang narcotics were reaching America through Mexico. The Mafia was involved, as was Bugsy Siegel through his ill-fated love affair with curvaceous mob courier and courtesan Virginia Hill.
Described by Anslinger as a “prominent narcotics figure,” Siegel in 1947 was the subject of an FBN conspiracy case that included all the usual suspects: Lucky Luciano, Joe Adonis, Frank Costello, Meyer Lansky, and Chicago’s Charlie Fischetti.11
The Siegel drug conspiracy had its inception in 1939 when, at Meyer Lansky’s request, Virginia Hill moved to Mexico and seduced a number of Mexico’s “top politicians, army officers, diplomats, and police officials.
Hill soon came to own a nightclub in Nuevo Laredo, and started making frequent trips to Mexico City with Dr. Margaret Chung, an honorary member of the Hip Sing T’ong and the attending physician to “to the Flying Tigers – the private airline formed under China Lobby luminary General Claire Chennault to fly supplies to the Nationalists in Kunming, the city John Service described as infused with OSS agents and opium.
More to the point, as investigative journalist Ed Reid reported in The Mistress and the Mafia, the FBN knew that Dr. Chung was “in the narcotic traffic in San Francisco.
Chung took large cash payments from Siegel and Hill and delivered packages to Hill in New Orleans, Las Vegas, New York, and Chicago. These deals involved Kuomintang narcotics, and yet, despite the fact that the FBN agents “kept her under constant surveillance for years,” they “were never able to make a case against her.
Why not? Because she was protected, of course. Admiral Chester A. Nimitz was just one of her many influential friends in Washington. And unlike Bugsy Siegel, she wasn’t making waves; although where, exactly, Siegel went wrong is open to debate.
HERE IS WHERE IT GETS INTERESTING!!!!!!!!
By most accounts he was murdered by the Mafia for squandering mob money on the Flamingo Hotel. But FBN Agent Joe Bell – George White’s replacement as district supervisor in Chicago – advanced a more plausible theory: that Siegel’s murder “paved the way to complete control of illegal narcotics distribution in California by the Mafia.
Bell was alluding to a drug smuggling operation Lansky had initiated in Mexico in 1944 under Harold “Happy” Meltzer.
Described as “the man who most feared Bugsy’s grab at Mexico,” Meltzer based his operation in Laredo, directly across the border from Hill’s nightclub, and moved drugs to the Dragna organization in California.
Meltzer was an associate of John Ormento, the Lucchese family’s link to Mafia boss Joe Civello in Dallas, and he worked with the Mexican consul in Washington, who located suppliers and bribed border guards.
Bankrolled by Lansky and Harry Stromberg in Philadelphia, Meltzer traveled regularly between Mexico City, Cuba, Hong Kong, and Japan. He was also a professional hit man, and in December 1960 the CIA would ask him to join an assassination team – a sinister overture that suggests that his connection to the espionage Establishment dated back to the Luciano Project, along with Lansky’s and Siegel’s.
Meltzer’s proximity to Virginia Hill in Laredo also strongly suggests that he was a recipient of Dr. Chung’s Kuomintang narcotics.
And if that was the case, Siegel may not have been murdered by the Mafia, but by agents of the US government, because his grab for control of the Mexican connection threatened to expose Dr. Chung’s protected Kuomintang operation.
Even the way Siegel was murdered – by two rifle shots to the head – has been characterized as very “ungangsterlike.
Protecting the Mexican connection was business as usual for the espionage Establishment, and when Siegel was killed in her house on 15 June 1947, Virginia Hill was already in France setting up an import agency that would exploit this most important gateway for moving narcotics to the Mafia in America.
Again, there is convincing evidence that the secret government was aiding and protecting Hill in this endeavor: her passport was stolen while she was in France, and yet despite her ties to organized crime, the State Department quickly provided her with a new one.
“In August, Hill traveled to Miami to deposit a large sum of cash in the National Bank of Mexico and then retreated with Dr. Chung to Mexico City, where in early 1949 she re-established her contacts.
Hill then traveled to Europe to confer with Lucky Luciano – Lansky’s partner in a new operation that relied on French Corsicans (many with intelligence connections) and clandestine labs producing high quality heroin in France and Sicily.
Why would the government protect notorious drug traffickers in this manner?
Peter Dale Scott theorizes that it preferred “organized crime to disorganized crime or radicalism.
And by mid-1947 there was more at stake than the fate of the Nationalist Chinese; there was the fate of Israel too, and several gangsters from the Luciano Project, including Lansky, were actively involved in arms and drug smuggling in the Middle East.
As the New York Times reported on 28 November 1948, the new state of Israel was combating “widespread narcotic smuggling” by “a small number of hardened criminals” who had slipped in and still practiced the black-market arts that had kept them alive during the war.
“As John Service had reported three years earlier, and as Anslinger knew was still the case, the Nationalist regime was totally dependent on illicit narcotics.
According to a 14 July 1947 State Department report, Nationalist forces were, at that moment, “selling opium in a desperate attempt to pay troops still fighting the Communists.
He also knew that Kuomintang opium and narcotics were reaching Mexico. In a 15 November 1946 report to Anslinger, New Orleans District Supervisor Terry A. Talent reported that, “Many Chinese of authority and substance gain their means from this illicit trade,” and that, “In a recent Kuomintang Convention in Mexico City a wide solicitation of funds for the future operation of the opium trade was noted.” Talent listed the major Chinese traffickers by name.
However, reports emanating from Mexico avoided any mention of the Mafia–Kuomintang connection.
For example, in February 1947, Treasury Attaché Dolor DeLagrave, a former OSS officer, reported from Mexico City that three major drug rings existed, but he made no mention of Virginia Hill’s connections, Albert Spitzer “and Alfred C. Blumenthal.
Though these connections were revealed to Senator Estes Kefauver, and even though Anslinger knew that Spitzer and Blumenthal were Lansky’s associates, and that large opium shipments were coming out of Mexico “under police escort,” there was no follow-up by the FBN.
In 1948 the FBN would declare that Mexico was the source of half the illicit drugs in America – but nothing was done about it.
(What else is new, huh?)
Nothing was done, because the drug trade enabled the Central Intelligence Agency (CIA), which was created in 1947, to destabilize the Mexican government by pitting officials of the central government in Mexico City against warlords in the northern border region.
(The more things change...lol)
Just as the CIA was pleased to see drug-addicted officials compromise the Cuban government, it was also glad when Captain Rafael Chavarri, founder of Mexico’s version of the CIA, the Federal Security Directorate (DFS), formed relations with Mexican drug smuggler Jorge Moreno Chauvet. According to Professor Scott, at this point the CIA “became enmeshed in the drug intrigues and protection of the DFS.
“By 1950, Chauvet was receiving narcotics from the new Lansky–Luciano French connection;* and the mob-connected, former mayor of New York, William O’Dwyer, was the US ambassador to Mexico.
LITTLE BIT ON O'DWYER HERE.......
“New York district supervisor, Williams whipped the office’s maverick case-making agents (aka the Forty Thieves) into line, and then tied Yasha Katzenberg’s gang of Jewish narcotics smugglers to Japan through their source in Tientsin, China, at the same time that Anslinger, in March 1937, was accusing the Japanese of dispensing opium in Manchuria as a weapon of war.
The Katzenberg case marked a pivotal point in the history of international drug smuggling.
To sum it up, Yasha Katzenberg managed an elaborate drug ring that, with the help of corrupt Customs officials, smuggled huge amounts of narcotics on luxury liners from China to Mafia and Jewish distributors in New York. After Katzenberg was indicted in 1937, Garland Williams tracked him across Europe and caught him in Greece.
“Brought back to New York to stand trial, Katzenberg “flipped” and became the main witness against his fellow conspirators.
But of his many revelations, the most important was that Giuseppe “Joe Adonis” Doto had stolen his last drug shipment, and had effectively taken control of narcotics importation.
The significance of Katzenberg’s revelations about Adonis cannot be overstated: it confirmed that the Mafia had always obtained narcotics from the Far East, and that it had taken over international drug trafficking from the Jewish gangs; but it also meant that the FBN had identified a top member of the conspiracy – as well as his political protector, Brooklyn District Attorney William O’Dwyer.17
THE POLITICS OF ASSASSINATION IN NEW YORK
Joe Adonis rose to power in the underworld by providing the Ford Motor Company with the muscle it needed to smash an autoworkers strike outside Detroit in 1932.
He was rewarded with a lucrative franchise, and until 1951 “his Automotive Conveying Company freely moved sedans and drugs between Detroit and New Jersey, and thence throughout New England and the East Coast. “In the eight years from 1932 to 1940,” investigative journalist Fred Cook wrote, “Ford paid this Adonis-controlled company a cool $8 million.
The FBN’s headquarters staff knew this about Adonis, but Katzenberg provided an astounding new insight into the relationship between Adonis, his Mafia and Jewish associates, and politicians in New York.
According to Katzenberg, Adonis had used his political influence to ensure that Brooklyn policeman William O’Dwyer first became a magistrate, and then Brooklyn’s District Attorney. By 1941, O’Dwyer was a powerhouse in his own right and would successfully run as the Democratic candidate for mayor of New York, presumably with Mafia backing.
(I've never bought into the idea that Costello had the mafias greatest political connections, don't see it....)
