Wednesday, 2 February 2011

Ghost of Regime-Change Past: Enron’s Frank Wisner Jr does Dad’s Job in Egypt

Barak Obama’s slogan in 2008 was “Yes, we can.” By choosing as his point-man to guide Egypt’s future, the son of one of the CIA most famous “can do” covert operatives , Obama has shown once again that his promise of “Change We Can Believe in” did not rule out changes which turn the clock back.

On 31st January, the U.S. State Department admitted that Frank Wisner Jr was in Cairo but did not disclose when he arrived. The U.S. ambassador to Egypt, 1986-91, Mr Wisner is Washington’s special representative for the crisis facing the Egyptian regime. But for any historian of regime change, the name Frank Wisner is a familiar one. It conjures up a ghost from the CIA’s past covert role in “revolutions” and regime change in Iran, Central America and South-East Asia. Sometimes Papa Wisner’s boys toppled opponents of the United States, sometimes the victims were old friends who had lost their usefulness.

Today’s arbiter of Egypt’s future, Frank Wisner Jr has “regime change” in his DNA.

Although Washington is busily dispensing with the services of allied gerontocrats like Tunisia’s Ben Ali and Egypt’s Mubarak, it is an irony of the age of “People Power” that the White House chooses men with a careers stretching back deep into the Cold War-era of dirty tricks and covert operations as its representatives to guide young democracies in their wobbly infancy.

Now 73 years old, Frank Wisner Jr’s childhood was marked by extensive separation from his father because Frank Wisner Sr. was a wartime OSS agent. Wisner Sr. made the transition to the newly-established CIA in 1947. As head of operations and deputy director, he played a key role in countering Communism. To Wisner Sr. anything which he thought might tend to Communism if only by not bending Washington’s way was to be sabotaged and destroyed. From the Philippines in the early 1950s, Iran in 1953 via Guatemala in 1954 to South Vietnam in 1963, Frank Wisner’s fingers were in every regime-change pie. But he was more than just the advocate of manipulating the politics of foreign states.

Like several other key CIA officials in the first two decades of the Agency’s existence, Wisner was fascinated by mind-control. He encouraged research on brain-washing of individuals, something which the democracies had to learn to counter sinister Chinese and North Korean practices on U.S. PoWs in Korea. He encouraged the use of drugs like LSD in experiments on unwitting American civilians. (He may even have experimented on himself – as several other privileged U.S. insiders did.)

But controlling the minds of the Western public was his key goal. Wisner controlled unregistered funds with which he paid journalists and media proprietors. In the 1950s for the first time, young American journalists working for obscure newspapers or Mid-Western outlets with no obvious appetite for news from beyond the Prairies appeared able to live in exotic and expensive locations. Swarms of goatee-bearded civil society activists and new media specialists have followed in their footsteps in the last two decades.

Frank Wisner Sr is most famous for his indiscrete claim that he had so many agents and assets in the American and Western media that he could play the press like a “mighty Wurlitzer.” In the age of coordinated Twitter, Facebook and blogging campaigns, old man Wisner’s image of a cinema organ making the world’s mood music in a crisis might seem old-fashioned, but its essence - a coordinated campaign within the supposedly free media by strategically-placed intelligence assets – seems less anachronistic today than ever as countless breathless journalists for innumerable outlets seem to recite from the same script.

Frank Wisner Sr’s frenzy of subversive activity was liberally fuelled with booze. Nervous breakdowns rarely kept him long from his Langley desk but his erratic behaviour worried the more sober-suited spooks. Instead of sinking into an embarrassing alcohol-soaked retirement, he did the Agency a final favour in 1965 and shot himself – a tragic hero of the undercover world.

But should the son be judged in the light of his father’s career or habits?

The official line is that after a classic upper class[1] education at St. Albans and Princeton, Wisner Jr passed up the chance to serve his country in the CIA but took on the more open and honourable profession of diplomat instead. But, like several of his contemporaries, Wisner has mixed diplomacy, business and backstage influence in ways which have been very successful – but not explored by a free media as tame as in his father’s heyday when it comes to querying Washington’s power elite’s modus operandi.

Like Richard Holbrooke, Frank Wisner Jr cut his teeth in South Vietnam in the early 1960s as the U.S.-backed Diem regime came to a bloody end with Washington’s connivance but the rhetoric of democratization U.S.-style carried on. A generation later Holbrooke would denounce Serbs as “war criminals” for participating in the kind of pacification programme - targeted assassination, village clearances, and so on - which he helped advise on back then. Frank Wisner Jr was closer to the heart of the action in Saigon. Eight years earlier his father had played a key role in installing President Diem as President of South Vietnam. He was awarded an über-Mubarak 98.2% of the vote in the election called to confirm his installation in office. (Afficionados of CIA-sponsored Cold War film propaganda will remember the end of Joseph Mankiewicz’s cynically-twisted version of Greene’s Quiet American with its thanks to “the elected president of Vietnam”.) By the time young Frank’s membership of an obscure State Department-Pentagon overlap-unit in the U.S. embassy in Saigon was listed Diem’s star had waned in Washington and he was murdered in October, 1963, in a CIA-sponsored coup while his brother achieved what Robert Kennedy called the “unique feat” of committing suicide in custody with his hands tied behind his back! Young Frank learned how to stabilise a “nascent democracy” in tough conditions back then.

Another young member of the U.S. team in Vietnam then was Kenneth Lay. Mr Lay would leave public service – a Pentagon liaison team – to join the energy industry, but never lost contact with his comrades in the battle for democracy in Vietnam.

Although Frank Wisner Jr. carried on in the underpaid US diplomatic service, his path just kept crossing Ken Lay’s growing energy empire. His ambassadorship in the Philippines was devoted to promoting US investment – to be precise the purchase of Subic Bay power stations by Lay.

It was during his time in India that the Wisner-Lay axis reached its apogee and began to unravel the U.S. economy.

At the end of October, 1997, Wisner joined the board of Enron. He had just finished his stint as ambassador in India where he had represented U.S. interests since 1994. He had done much to promote the Texas-based energy giant’s activities in India. It was in India that Enron’s complex web of financial fraud began to unravel. No doubt the State Department took the line that what was good for Enron was good for America – certainly it was good for certain American diplomats.

Enron was desperate to get the Dabhol power project in Maharashta state. The U.S. embassy fought hard, some say dirty, to get the Indians to sign up to a deal which required the state to guarantee the profits of the foreign private investor. It was emblematic of the new world order: profits would be private but any losses, environmental costs and so on would be borne by the people. But without Wisner on hand and with turbulent local democracy electing officials who were not take with Socialism for the Foreign Rich, things began to go wrong. By 2001, Enron was both India’s biggest foreign investor and losing money there hand over fist. Sucheta Dalal noted that February, “The fact that Frank Wisner, the aggressive and high profile former US ambassador to India, promptly joined the Enron Corporation board of directors after leaving the country, has done nothing to enhance the power company's credibility. If that were not enough, Wisner's successor Richard Celeste chose to emulate his predecessor and used a farewell visit to Bombay to openly lobby for Enron and threaten the state government.” [2]

As in California at the same time, Enron was reaping the whirlwind of its successful lobbying to weaken state regulation of electricity prices and hike them, but as in California its early super-profits had soured into soaring losses. Indians could not and would not pay Enron’s inflated prices – but Enron needed their cash to flow through its complicated fraudulent financial system to keep it afloat.

Like the other members of the Teflon Texas political elite, Wisner Jr walked untainted from the wreckage of Enron. A guardian angel hovered over his career and reputation – maybe Dad put in a good word with the patron saint of greed for him. American newspapers always call him “respected” but never mention Enron and his name in the same column.

After the Enron debacle, Wisner went on to bigger and better bankruptcies. He became a member of the board of AIG, but though it went belly-up in 2008 taking umpteen billions of U.S. taxpayers dollars, Frank Wisner Jr’s unblemished reputation lives on.

Contrary to the “idiot leftists” who see capitalism as the determinant of politics, the careers of a Wisner or his fellow late AIG director Richard Holbrooke compared with the humiliating fate of Enron’s Ken Lay show it is political insider-status that enables a power-broker to survive insider-dealing admissions as Holbrooke himself made in 1999 on the eve of the Kosovo War which he did so much to promote.

To sit on the board of one economic Titanic without noticing the icebergs looming ahead might seem unlucky, but to grace two capsized engines of capitalism like Wisner looks careless – except when you have his aura. Money might buy influence, even protection. Power guarantees it.

Promoting Kosovo’s independence, despite the evidence of unsavoury criminal activities by the politicians whom Washington backed was Frank Wisner’s main “diplomatic” activity in retirement. Just as Dad had turned a blind eye to the drugs smuggler from Marseilles to the Mekong Delta who helped the anti-Communist fight after 1947, so his boy seems to have been unconcerned about evidence in the possession of the US government and its European allies that the KLA had a profitable sideline in corruption, drug smuggling to Western Europe, people trafficking and – it is alleged by the Council of Europe – even organ trafficking.

Just as his father’s CIA saw exotic micro-peoples in South-East Asia – Hongs and Karens – as valuable allies in the main struggle despite their involvement in the heroin trade, so promoting weak, criminalised micro-states has been part of his son’s “foreign policy.” Such entities are dependent on protection by a great power. Being Mafioso-states, they understand and respect power.

Egypt is a very big state with 80 million people, but its internal regime based on intertwining family and corporate interests with the mechanisms of state power to guarantee them is not essentially different from other U.S. allies of convenience.

Wisner Jr. did not drop his interest in Egypt after he had served there as ambassador during the painful period, 1986-91, when Mubarak began “reforms” cutting living standards and privatizing. This process has gone on until now with good GDP figures which pleased foreign investors but masked the reality of growing poverty for the many while a relative few profited from the “growth.” Mubarak was a poster boy for economic reform in the Arab world and took no nonsense from whinging populists.

In recent years, Wisner has worked for the Washington lobbyist firm, Patton Boggs, which has lucrative contracts on behalf of the Egyptian government, including the military. Polishing Egypt’s public image has been one of Patton Boggs’ tasks. Maybe, today, President Mubarak will be asking whether he got his money’s worth.

In 2005, Wisner endorsed Mubarak’s decision to stand for re-election as President of Egypt and suggested that in a free and fair election 65% of Egyptians would endorse their president since 1981. But there was a sting in the tail of his endorsement: All of these are factors, plus the fact that this is clearly the last time President Mubarak will stand for re-election. His age is such that [Egypt] is clearly in a transition period, with something else to follow.”[3] However, as we anticipate a post-Mubarak regime, Wisner also had a s sting in the tail for naïve democrats who believe that Mubarak’s slow motion resignation means that someone entirely new and untainted by service in the Mubarak camp will be his successor. Wisner remarked, “The political culture of Egypt is to vote for stability.”

On 1st February, an anonymous US official – possibly Wisner himself – told AP, Wisner and Mubarak are friends and the official said the retired ambassador made clear that it was the U.S ‘view that his tenure as president is coming to close.’”[4]

Frank Wisner Jr has been director of the appropriately-named Pharaonic American Life Insurance Company (ALICO) in Egypt since 2007. He also serves on the board of Hakluyt, the British “investigative” company which may employee a higher proportion of ex-spooks than any other company on either side of the Atlantic. Along with Pentagon’s Ken Bacon, Wisner has shown his charitable side serving on the board of Refugees International. Cynics will be unkind enough to recall his father’s involvement, along with Allen Dulles, in infiltrating charities aiding so many refugees in Europe after 1939. America needed agents and information, refugees need help – for them it is a matter of life or death. But association with an intelligence service via a charity could be fatal too as some of those who got help from the proto-CIA ended up shot by Hitler or later by Stalin as spies, real or imagined.

But it is Wisner’s role today as the pivot of America’s regime-change agenda in Egypt which makes him so important despite his invisibility. The man in the shadows has strings to pull which are anchored at the Archimidean point of world politics in Washington.

It is not just a case of easing out Mubarak but of making sure that all of what Tony Blair would call the “good he has been doing” is carried forward. Not only must Egypt’s next president be a reliable ally in the Middle East peace process, but under the guise of democratic legitimacy, real or media-hyped, he must also pursue the economic agenda which has undermined Mubarak’s regime.

When American officials from Obama downwards repeatedly couple their calls for democratisation in Egypt with demands for market reforms, the old Enron devil inside Frank Wisner knows what that must mean for Egypt’s impoverished masses. If tens of millions of Egyptians are angry with Mubarak about getting poorer already, what will they make of the final abolition of any subsidies on food and energy?

Mr Wisner is such a “respected” diplomat that no-one in the official media has queried possible conflicts of interest arising from his business activities in the country whose political system he is reshaping so selflessly. Future privatizations are part of the reform agenda being pressed on Egypt. Could it possible have occurred to the former director of Enron and AIG as well as of the Pharaonic American Life Insurance Company that a privatization on the epic scale worthy of the land of the Pharaohs is looming: the Suez Canal was nationalised by Mubarak’s first patron, Gamel Abdul Nasser, won’t it be a neat sign that People Power has truly triumphed in Egypt when ownership of the Suez Canal is returned to private, preferably international owners? And then of course, the Aswan dam’s electricity generating capacity can only improve if foreigners with expertise in the energy field give a helping hand….

Asking who has the power to profit from People Power is an undiplomatic question. Maybe it is wiser to leave it in the shadows where Wisners prefer to remain.

[1] Married to the French President’s stepmother, the former Christine Sarkozy, Wisner is bi-lingual in French which helps in North Africa especially where French culture lingers among the elites.

[2] See Sacheta Dalal, “The Enron crisis reaches a crisis point” (8th February, 2001):

[4] See Matthew Lee, “AP source: Obama envoy tells Mubarak time is up” AP (1st February, 2011):

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