One Big Club

Uncovering the Elite Enterprise

John Torpats wanted to save his job, but he had a terrible secret. He decided to tell other secrets about his employer, the CIA, in hopes of winning a lawsuit against them; he knew they would want to keep what he did hidden from public view. In 1961, he sued the Agency for unjust dismissal. A former intelligence officer, Torpats had worked for the CIA from February 1949 to January 1961 and argued that he was denied due process and was dismissed following a mission to Europe in 1956. While stationed overseas, he was accused of disobeying orders and showing poor judgment. After seeing how CIA Director Allen Dulles had included names of HR officials issued in a statement attempting to dismiss the lawsuit, Torpats decided to name the CIA intelligence officials he knew and worked with in a follow-up affidavit:

In early 1956 a situation had developed in a European mission of CIA which my then area superiors, Frank G. Wisner, Richard Helms, John M. Maury, Jr., and N. M. Anikeeff, felt had been mishandled by the personnel of the mission. The mission reports were considered to be unsatisfactory in our component. My superiors felt that I could handle the problem more effectively and expeditiously and decided to send me to do it. The principal figures in this particular mission were Mr. Tracy Barnes, Mr. Thomas Parrott and Mr. Paul Losher. At the time of my separation, Mr. Barnes and Mr. Parrott were employed by the Agency in the Washington, D.C., office.

Notice was given to the mission in April of 1956 that I was being sent over. I was given no special instructions before I left; I was to be on my own. The mission had sent a report on the problem which I later proved was incorrect. Had the mission report been followed, it would have done incalculable harm to the United States.

When I finished my assignment, for which I received several commendations from headquarters, but before I could file my report, Mr. Barnes, on a complaint by Mr. Parrott, put me under house arrest; ordered an investigation, shipped me home; cabled charges against me to headquarters with a demand that I be fired.

In 1957, an employment review board rejected a recommendation that Torpats be fired and instead he was reassigned to a new office where his “skills [could] be utilized.” Torpats explained that in his new role he was given almost nothing to do and in 1958 his performance was reviewed as showing poor judgment, an inability to handle agents, as well as “inflexibility and stubbornness.” After further internal proceedings, Dulles conducted a 10-minute interview with Torpats before telling him to resign, retire, or be fired; the CIA ended up pursuing the latter option.

In his statements to the court, Torpats revealed the CIA’s secret involvement with Estonian émigré organizations and he claimed his perceived lack of objectivity in assessing Estonian émigré issues was a core issue at hand. Dulles strongly opposed the lawsuit, arguing that allowing such cases would undermine the CIA’s operations: “[Torpats] understood that the nature of his work was secret, and that the disclosure of his duties and the names of fellow employees would not be in the best interest of his government. Moreover, he swore, as a condition of his employment that he would never reveal such information.” If CIA officers went to court every time they felt wronged, “Operation of the Central Intelligence Agency, with liability to publicity in this way,” Dulles stated, “would be impossible.” Torpats was suing to be reinstated in his job and asserted he was being targeted by a “small clique of jealous and vindictive individuals” within the Agency. The District Court sided with Dulles and Torpats appealed the decision.

On March 23, 1962, the U.S. Court of Appeals ruled that the CIA Director has broad discretion to fire an employee “in the interest of the United States.” The court ruled that the CIA Director acted within his authority under the National Security Act of 1947, which allows broad discretion in terminating employment for national security reasons. The court noted that Torpats was not barred from other government employment and that his termination was due to a lack of suitability for the position, not security concerns. The real reason Torpats was fired would be hidden for over six decades.

Cover-Ups

Working at the CIA near the end of his career in 1985, Bruce Hemmings was discovering there were cover-ups at the CIA everywhere he looked. Coming off what he felt was a successful assignment as Deputy Chief of Station in Tunisia, he was now posted to the Iran Branch of the Near East Division. Days after being told that his responsibilities would include counterintelligence and counterterrorism, he discovered a bombshell from a thick dossier the CIA had prepared in advance of a May 1985 meeting between Ronald Reagan and Margaret Thatcher: Great Britain was selling arms to Iran, including Chieftain main battle tank parts. The Division’s Chief told Hemmings that the CIA provided the dossier to President Reagan for him to confront the U.K. Prime Minister and the Chief laughed recalling the story that when told the facts, she lied to Reagan’s face “and denied all.”

There was also a series of joint intelligence operations underway, Hemmings learned, that were being conducted between the CIA and the British Secret Intelligence Service (SIS), focusing on cultivating contacts with influential clerical figures inside Iran. These operations, which were largely managed by the British, were intended to generate high-level political intelligence and potentially identify alternative power players within Iran’s leadership, including ayatollahs and mullahs. Despite the apparently strategic importance of these efforts, Hemmings remembered: “I saw little or no good intelligence from any of these British-run operations during my 18 months [in] this Branch.”

A specific case involved a high-level Iranian official, who had prior contact with SIS. He was approached for recruitment by Hemmings and another senior CIA case officer known to Iranians as “Captain Larry.” Hemmings himself met the potential CIA asset under the alias “Brian Duncan.” The source expressed a preference to work with the Americans and indicated that he could provide extensive financial and operational details about Iran’s arms procurement networks, which may have included“ full details, bank account numbers, etc. of overt and clandestine arms purchases, the providers of the arms, banks involved, and Iran’s oil revenues…which would have been a windfall [for] identifying black arms suppliers in the U.S. and Europe and the Arab world/Asia.” Hemmings strongly advocated for handling the source unilaterally in the CIA due to concerns that British intelligence might be compromised or involved in unauthorized arms dealings with Iran. However, CIA leadership insisted on informing the British due to existing liaison agreements, after which SIS assumed control of the case.

The operation quickly deteriorated under British management. Planned meetings were canceled, and although SIS later reported contact with the source, no actionable intelligence was ever produced. The source subsequently returned to Iran, where he was reportedly arrested by Iranian security forces and executed within two months. This outcome for Hemmings raised serious concerns about possible compromise within intelligence channels, particularly given the sensitive nature of the information the source had offered. His attempts to raise these concerns with oversight bodies, including the CIA Inspector General and Senate investigators, were dismissed as “bad luck or excellent security at the Iranian end.” Hemmings maintained that the incident, along with the reported loss of multiple additional agents in Iran during the late 1980s, pointed to a broader counterintelligence failure that authorities were unwilling to investigate. “The fact the Agency lost an additional 6-7 agents in Iran during 1988-89 also did not seem to upset the SSCI [Senate Select Committee on Intelligence] or CIA officials I spoke with,” summarizing their attitude as: “if we ignore it, it will go away.” It turned out there was an additional reason the U.S. had no interest in pursuing the issue of illegal arms sales to Iran.

Discovering Iran-Contra

The more Hemmings discovered, the more he was placed in what he felt was an untenable position: he could lie, perjure himself, or tell the truth and try to disrupt the illegal activities the CIA was being ordered to carry out. In late September 1985, he was assigned to handle a sensitive FBI-related case involving a source with potential access to senior Iranian leadership. Initially, the case had been treated cautiously, as the source’s access had not been verified. The primary goal was to establish secure communication and eventually extract and debrief him. However, the situation changed dramatically when the source reported that a U.S. military aircraft had allegedly landed in Tabriz in and delivered arms to Iran, a violation of the U.S. arms embargo. Hemmings remembered that when FBI Special Agent Randall Boone contacted him with this information, he was asked whether the operation was CIA-related. Hemmings promised to check but found little help in confirming the facts: “I asked two female reports officers, Ken the Covert Action referent, and tried to ask the [Chief of the Near East Division] C/NE/Iran or his deputy. Neither there.” The Chief was rarely in the office or if he was, his door was usually closed. He decided to check with Karen, the Branch Chief’s secretary, who read everything that passed through his desk. He informed her “the FBI was waiting on the line on whether to disseminate it to the community.”She responded,“Tell them not to disseminate it and that it’s not a CIA operation. It’s a White House operation.” Hemmings relayed the information to Boone, not realizing how much grief it was to cause him later.

Hemmings gradually came to understand that elements within the CIA, including senior officials and operatives, had been involved in or aware of covert arms transfers to Iran, often coordinated with Israeli intermediaries. He recalled that key figures within his Division appeared to possess prior knowledge of these operations, including earlier arms flights and high-level visits to Tehran, yet had not shared this information with him even as he worked on intelligence reporting on those events. Over time, he pieced together that individuals such as CIA officers George Cave and others in the Near East Division had been connected to these activities, and that intelligence from the FBI source had in fact accurately described multiple arms shipments and clandestine contacts, including the visit of U.S. officials to Tehran. The FBI, for its part, was aware of illegal arms shipments to the Contras as early as the fall of 1984. Mansur Rafizadeh, former SAVAK Chief in the United States, quoted Cave complaining on a bugged balcony during one failed trip to Iran, “I don’t need this. I have money in the stock market.” At the time, Hemmings did not fully grasp the significance of details such as aliases used by participants, only later recognizing their importance when they appeared in press accounts of the Iran-Contra investigation.

“Stay out of this, Bruce,” an operations support assistant cautioned him. “It’s going to be a flap. [Oliver] North is a cowboy, and they are using [Manucher] Ghorbanifar, who’s a fabricator. We fired him back in ’81 because he lied and wanted money.” Hemmings interpreted these warnings as evidence that at least some within the Agency were aware of the questionable nature of the activities. He further learned of links between the arms trafficking networks connected to the Contras and other covert operations.

The situation came to a head for Hemmings in April 1987, when he received an urgent call from the CIA General Counsel, demanding immediate details about the earlier FBI case in connection with the Senate confirmation hearings of FBI Director William Webster. Hemmings was pressured to produce a memorandum within minutes, under circumstances he considered highly irregular. When he briefed senior CIA officials, including Thomas Twetten, head of the Near East Division, he was instructed to limit his account strictly to his conversation with Boone and to omit any reference to the “White House operation,” as well as other sensitive details involving intermediaries and intelligence sources. Hemmings interpreted these instructions not as a direct order to lie, but as a directive to withhold critical context. A colleague warned him bluntly, “Bruce, your career is over. If you tell the whole truth or if you lie.” He returned to the Iran Branch looking for Karen, the secretary to the Branch Chief, to ask her if she remembered their conversation two years ago about the arms trafficking being a White House operation. She looked him directly in the eyes: “I don’t remember a thing,” she answered and then ended the conversation by walking away.

The motivation for the Iranians and the Enterprise behind Iran-Contra was simple enough in Hemmings’ view: “money, through arms sales.” The desired outcomes for the White House and National Security Council he described as two-fold: “to ensure Iran maintained a rabid anti-Soviet stance, and for domestic political reasons: a White House lawn photo opportunity to open up a channel and votes and some humanitarian concerns to see if the hostages in Lebanon could be released as a good will gesture/quid pro quo.” The entity known as the Enterprise at the center of the Iran-Contra affair was a loosely organized, privately run network that carried out covert operations on behalf of U.S. policy objectives. It emerged in the mid-1980s around the efforts of Oliver North, who, working in the National Security Council, sought ways to continue supporting the Contra rebels in Nicaragua after Congress had prohibited such aid. To do this, North and his associates relied on a group of trusted intermediaries operating outside official channels, including retired Air Force General Richard Secord and businessman Albert Hakim, who helped construct a web of private companies, bank accounts, and international contacts. Ghorbanifar acted as a middleman in Iran-Contra; Cave later issued a burn notice against him, as referenced in the Report of the Congressional Committees Investigating the Iran-Contra Affair which stated, “The decision to consider continued reliance on Ghorbanifar was remarkable. Previously, Agency officials had found his information so marked by deceit, lies, and self-serving proclamations that it had issued a ‘burn notice’ warning the U.S. intelligence community that he could not be trusted and should not be dealt with. Moreover, the information Ghorbanifar was providing was almost impossible to corroborate. He alone was explaining the Iranian position on the hostage issue. The last deal he had helped arrange, the November HAWK shipment, had been a complete disaster.” Twetten later remarked that “This is a guy who lies with zest.”

Through this network, the Enterprise arranged the secret sale of arms to Iran, then under a U.S. embargo, with the expectation that the transactions might help secure the release of American hostages in Lebanon. The profits from those arms deals were then diverted, through a maze of offshore financial channels, to fund the Contras, circumventing the legal restrictions imposed by Congress. The Enterprise provided a layer of deniability for senior officials. The congressional report on the affair explained that the secret organization had broader goals of an ongoing nature, to conduct U.S. foreign policy beyond the bounds of law and oversight: “According to North, CIA Director Casey saw the ‘diversion’ as part of a more grandiose plan to use the Enterprise as a ‘standalone,’ ‘off-the-shelf,’ covert capacity that would act throughout the world while evading Congressional review. To Casey, Poindexter, and North, the diversion was an integral part of selling arms to Iran and just one of the intended uses of the proceeds.”

Warehoused

Born in Plainfield, New Jersey in 1944, Hemmings joined the U.S. Navy and served in the Vietnam War from 1968-1969. He began working at the CIA in 1972 and rose from GS-8 to the rank of GS-14, a senior operations officer. He was awarded the CIA’s Intelligence Commendation Medal in 1985 for work on China; the award is given to recipients for “the performance of especially commendable service or for an act or achievement significantly above normal duties which results in an important contribution to the mission of the Agency.” He retired from the Agency in 1988 and went on to testify on illegal activities before the Senate Subcommittee on Intelligence and the Senate Committee on Governmental Affairs. All that remains publicly available regarding his testimony is his expense bill, recorded in a report from the Secretary of the Senate, confirming that he testified as a witness before the Committee on Intelligence from November 19-22, 1989.

In the final years of his Agency career, he served at Agency headquarters beginning in 1985. By 1986, he was made Deputy Chief of Egyptian Operations in the Near East Division. He was briefly transferred to a non-managerial job in the Foreign Resources Division in Boston in August 1988 but resigned a month later. One of the few public airings of his grievances was found in a Jack Anderson syndicated column in October 1989. In the article, Hemmings called for the establishment of an independent inspector general to oversee complaints against the CIA: “In the area of intelligence, there is no mechanism available to an employee or ex-employee to address…allegations of impropriety.” He explained his learning of a cover-up involving the facts regarding the Iran-Contra and his feelings regarding being “hounded” by the CIA for having “seen too much,” and described his final posting as an attempt to “warehouse” him “in a job without responsibilities,” in Anderson’s retelling.

Hemmings had seen Anderson’s name come up once during his CIA career. In 1985, he happened to speak to a junior officer carrying a “black-tape 201 file” related to Anderson and bearing a cryptonym beginning with “MH” that was catalogued as part of the Agency’s 201 filing system for maintaining records on individuals of intelligence interest. Speaking of his conversation with the junior officer, Hemmings recalled, “He and I knew that it is against the law for CIA to recruit, run, plant stories with, or other have contact with U.S. journalists without the highest level legal permission.” Hemmings doubted that “such legal niceties” were observed in this case and noted that the junior officer was worried that the file existed. Through disclosure of the CIA’s Project Mockingbird, it is known that Anderson was bugged at his office and home in 1963, along with another newsman, which the CIA found “particularly productive in identifying contacts of the newsmen, their method of operation and many of other sources of information.”

The CIA’s wiretapping of Anderson was one of the incidents catalogued in an internal Agency collection of documents nicknamed the Family Jewels. It was compiled in 1973 at the direction of CIA Director James R. Schlesinger shortly after the Watergate scandal broke. Schlesinger asked Agency employees to report to him any activities that may have been violated the Agency’s charter or the U.S. law. The Family Jewels compilation described a wide range of activities, among them the domestic surveillance of antiwar activists, journalists, and other U.S. citizens, a domestic mail-opening program, assassination plots against foreign leaders, the detention and interrogation of individuals, and drug testing and behavioral research. Partially declassified in 2007, the first item on the Family Jewels list remains classified to this day.

Calcutta

“There are some shenanigans going on down there. Don’t get involved.” Hemmings heard this caution while being briefed by his Chief of Station on events occurring in Calcutta, his CIA posting from 1979 to 1980. Once he arrived in India, it did not take him long to discover what the misconduct entailed; there were many problems and numerous sexual affairs involving Agency staff.