Malcolm Blunt: Project Files, Notional Companies, and Special Crypts

The CIA’s Historical Review Group (HRG) during the tenure of the ARRB responded to Review Board requests and communicated internally with various CIA components. These internal administrative files were released by CIA in a somewhat redacted form following pressure from the ARRB. They were called the “Project Files” by the HRG and are an interesting set of records. In one internal memo the term “notional companies” appears in which CIA HRG describe “notional companies” as companies which have never surfaced, thus differentiating them from “proprietary companies” many of which HAVE surfaced over the years. It is clear that “notional companies” are an internal CIA substructure and for the first time an example is laid bare for all to see.

Mr. (Lawrence) Houston’s MH/MUTUAL surfaces as a super-secret covert funding vehicle with the power to spawn connected entities in order to fund sensitive CIA operations. This is pure genius, really. What better outfit than the Office of General Counsel to manage such a task? When a problem surfaces or when an operation is blown, then you have the legal arm of the Agency clamping down immediately before a situation gets out of control; and with the master of deception, Mr. Houston at the helm, any political concerns can be smoothed over for additional document support on the status of “notional companies.” (See William Broe’s letter to Lawrence Houston dated 4th May 1971, CIA 104-10104-10029.)

In the midst of my struggles to unravel this conundrum I had a lucky break; sometimes serendipity can unexpectedly fall upon us. Recently, my friend, Bart Kamp, sent me an SSCI (Church Committee) document which I recognized from many years ago and in which I had a long time interest. Disaffected former CIA officer Victor Marchetti met with Senator Richard Schweiker and Elliot Maxwell on June 6th 1975 for an hour and a half. A few notes were taken and, following the ARCA legislation, a little over a single page write-up was released with some deletions. The document I received from Bart differed from the document I had long pondered in one very significant way: a redaction on my document was not present on the one sent to me by Bart! Victor Marchetti discusses MH/MUTUAL and he mentions CIA funding in that context: He asks, “Where did the money come from….the retirement fund, the loan fund, credit union or escrow funds?” “On what basis were decisions made to invest it?” Please note the euphemistic use of the word “invest.” This is a crucial document in my opinion because it presents a snapshot of internal CIA systems and methodology, but what does all this mean?

Marchetti, in an extraordinary admission, names John Clark as sitting on the board and Larry Houston as “Chairman of the Board.” In the context of his previous statement within the document, the “Board” discussed must apply to the entity MH/MUTUAL which ties other documents to the Office of General Counsel. We have therefore confirmation of a “notional company” under the stewardship of Lawrence Houston.

To recap: JM/SPUR is the Office of General Counsel which controls the “notional company” together with an entity, MH/MUTUAL, which manages large amounts of CIA money. The “PL” digraph (Proscribed and Limited, much used by OGC and others to emphasize very close control of subject content and dissemination) used in conjunction with “VW/CADET” seems to be funding linked to Cubans as suggested by my friend, Peter Dale Scott (See PDS on Watergate and the use of Cuban exiles in money laundering activities in Mexico and elsewhere such as the Bahamas). Further corroboration of the Office of General Counsel as a covert funding vehicle may be found in CIA 104-10119-10404 from the Deputy Chief of the Security Analysis Group in August 1976. He discusses the usage of serial fraudster Wallace Groves by CIA as follows: “From April 1966 to April 1972 Groves was an advisor or possible officer of one of Project WU/MUTUAL (later MH/MUTUAL) entities. Additional information in this file suggest that Groves was connected to Meyer Lansky.” So, Lawrence Houston’s “notional company,” MH/MUTUAL, spawns entities connected to organized crime figures like Lansky via Wallace Groves.

On page 164 of Jonathon Kwitny’s book “Crime of the Patriots,” he writes that, “one client entity of the Castle Bank was tied to money laundering of $5 million between 1970 and 1976. That company was run by Wallace Groves who had served two years in prison for one of the biggest stock frauds of the era and had then gone into Caribbean Casino operations with Meyer Lansky.” The CIA knew all this when it hired Groves as an advisor (or possible officer) when it hired Groves for one of it’s MH/MUTUAL entities, so the Houston “notional board” sanctioned the use of Groves to manage a Castle Bank “client entity” spawned by the Houston notional company (as per Kwitny). The Groves Counsel in the operation was a Paul Helliwell law partner.

When the IRS and the Department of Justice started to investigate Castle Bank, alarm bells rang at CIA and Houston’s right hand man, John Greaney at the Office of General Counsel, got the investigation closed down on the grounds that further investigation would compromise sensitive and significant CIA operations. Recent document releases mention a project, MH/FLUFF, in which Meyer Lansky is mentioned briefly. The document appears to have emanated from the NSA. The MH/FLUFF crypt reappears on some documents which mention Cubans in Mexico City. Interestingly, this information is on Restricted Handling Forms which we hardly ever see released. It may be useful to do some additional research on MH/FLUFF, MH/CURB, and MH/SPAWN.

In closing, I invite readers of this article to look at the PL/VWCADET crypt and see whether or not they can make progress in cracking it. Also notable: Philip Agee’s disclosures and the massive CIA crypt change in 1972 when the Agency had purloined Agee’s manuscript of Inside the Company: CIA Diary, and Victor Marchetti and John D. Marks, The CIA and the Cult of Intelligence (1975). Marchetti is especially important, his significance being reflected by the fact that of 86 pages of testimony to SSCI (Church Committee) I can find only seven pages.

RELATED: SHELL GAMES by Malcolm Blunt

[Tags: Documents; Bart Kamp discovery of Marchetti document; Blunt discovered version of the same document; Broe letter, and an untitled CIA memo]