source: WayneMadsenReport

January 30-February 1, 2009 -- SPECIAL REPORT. New information surfaces on Israeli, Soviet blackmailing of U.S. politicians in early 1980s

NY Probe Breaks the Story, WaPo Whitewashes It

Feds Spin Wheels in Probes,  DC’s “Chicken Hawk” Scene,   The New York Connection,  Foreign Agents Buy “Call Boy” Customer Names,  Famous Names Named,  Coming Next: Who’s Still On the Case

WMR has obtained copies of the reporter's notes of Lou Chibbaro of Washington's Blade newspaper on his in-depth and pioneering investigation of the blackmailing of clients, many of whom were members of Congress, in the early 1980s by intelligence agents of Israel and the then-Soviet Union. Of the top intelligence agencies identified in the blackmail of U.S. clients of underage call boy services, only the Israeli Mossad still exists as a major intelligence force in the nation's capital. The KGB disappeared along with the Soviet Union in 1991.

The revelations about foreign intelligence use of the client lists of various call boy services in Washington, DC and its suburbs in the late 1970s and early 1980s were first brought forth by a special investigator for the New York State Select Committee on Crime, Its Causes, Control and Effect on Society named Dale Smith at a hearing in New York City on July 27, 1982. Smith named Soviet, Israeli, and British intelligence agents as involved in buying client lists from the call boy companies.

The Washington Post reported on the testimony by Smith in a July 28, 1982 article, with a highly-misleading headline,"Sale of Male Sex Client Lists Unconfirmed, Ex-Investigator Says." No mention is made that the males involved were juveniles nor was there any mention in the entire article of Israeli intelligence. The article led off with "A former investigator for a New York state crime committee has testified that Washington area out-call male prostitution representatives have told him that lists of clients have been sold to Soviet and other foreign intelligence agents." The lack of a reference to Israel was not the first time that the Post waved its "blue and white" colors in corrupting news stories.

The New York Post got the story right, along with stating that Israeli intelligence was involved in buying call service client information.

The New York committee, which conducted an investigation that should have been conducted by the U.S. Congress since the underage prostitution ring involved members of the U.S. Senate and House, was composed of Ralph J. Marino, the Republican chairman, and Senators Abraham Bernstein, Howard Babbush, John Calandra, John B. Daly, James Donovan, Dale M. Volker, and Owen H. Johnson.

Then-U.S. Representative Margaret Heckler (R-MA) wanted the House of Representatives to appoint an outside special prosecutor to investigate the involvement of House members with the underage prostitution ring but she was rebuffed by House Speaker Thomas P. "Tip" O'Neill. The charges of improper actions by House members with underage prostitutes, including House pages were brought by a page from Arkansas named Leroy Williams. O'Neill wrote Heckler a letter that stated: "If the Congress cannot conduct an honest and comprehensive probe of these charges and punish those found guilty of these illegal acts, then the Congress has no right to make the laws that govern this nation." Another member who urged a full airing of the charges against House members was Representative Robert K. Dornan (R-CA).

The House Ethics Committee named former Secretary of Health, Education, and Welfare Joseph Califano, Jr. as special counsel to the House Ethics Committee to investigate the charges involving male pages and outside underage prostitutes.

Williams allegations were backed up by two other House pages who said that 14-to-18 year old male pages were constantly subjected to sexual harassment by members of Congress.

O'Neill's cover-up of the early 1980s page sex scandal would serve as a template for a cover-up some two decades later of a similar page sex scandal by House Speaker Dennis Hastert.

The scandal was covered by the Washington investigative paper, "The Deep Backgrounder," for which former CIA agent Victor Marchetti served as a contributing editor. The paper named three congressman and a senator as being involved with the use of male underage pages and prostitutes for sex. Those reported as being named by Williams, the former House page, were Senator David Pryor (D-AR); and Representatives James Coyne (R-PA), who, after his defeat for re-election in 1982 went on to serve in the Reagan White House; James Hansen (R-UT), an unsuccessful candidate for Governor of Utah in 2004; and Larry Craig (R-ID), later elected to the U.S. Senate and found guilty in 2008 of propositioning an undercover police officer in a men's room at Minneapolis International Airport. Former Senator Pryor was nominated for a six-year term in 2006 by President Bush to serve on the board of the Corporation for Public Broadcasting. Pryor's son, Mark Pryor, currently serves in the U.S. Senate.

According to the Chibbaro notes, the FBI, Arlington County, Virginia police, Prince William County, Virginia police, Baltimore Police, and, possibly, the CIA were involved in investigating the call boy network that operated out of modeling agencies and gay bars in the Washington area. The principal modeling agency, used as a front for the out-call services, was Friendly Models, owned by Richard Kind. Another firm that dealt almost exclusively with 14-year old boys was "The Stables" in Arlington, Virginia.

There is also evidence from Chibbaro's notes that a runaway youth house run by Special Approaches in Juvenile Assistance (SAJA) in Washington, DC served as a nexus for underage male prostitutes. Apparently, straight runaways had problems at the house dealing with "cross dressers."

The Baltimore FBI field office investigated a Rockville, Maryland man who was alleged to have been part of a pedophile "masturbation club."

The multi-agency law enforcement probe also involved the distribution of child pornography. FBI agents raided a film processing lab in Syracuse, New York called "Spectra."

FBI agents termed their investigation of underage prostitutes and their clients as a "chickenhawk" patrol.

One gay bar of interest to FBI and CIA investigators was the Chesapeake House on a New York Avenue strip of such bars in Washington. The bar became of interest to the investigators after Lee Eugene Madsen, a Navy yeoman assigned to the Strategic Warning Staff at the Pentagon, tried to sell Top Secret documents to an undercover FBI agent masquerading as a KGB agent.

Other Washington, DC "New York Avenue Strip" bars of interest to the FBI and police were Naples, Lone Star, and Frat House. FBI agents apparently called the bars "pederast cribs." Special investigator Smith also focused on similar bars on Manhattan's West Side. The bars had names like Lambda, Mineshaft, and "Toilet."

In their testimony before the New York Senate Committee, Washington police officers Anne Fisher and Carl Shoffler provided further details on the national pedophile ring. Shoffler said a major child porn operation operated out of Star Distributors in New York City. Fisher said for young girl prostitutes there was a definite "California connection." She said underage girls would be brought to DC from California and sent to ply their trade at 14th and K Streets in downtown Washington. She also said there was a young boy pedophile/prostitution network that involved Houston, Los Angeles, San Francisco, New Orleans, New York, and Washington, DC. She testified that boys would be sent from one city to another. Fisher also said the ring involved the use of credit cards that would be charged to photo studios, modeling agencies, and book stores that were merely fronts for prostitution.

Responding to a question from Senator Bernstein about whether she concluded that the boy prostitutes were not pressured into their activities, Fisher stated, "I think it's almost like if you get into this area of mind control. You take someone, you get them out of their normal society, and you bring them into this area. Perhaps, you start coming down on them a little hard, and then you treat them with niceness, and you have them basically sucked into you. They might want to get away, but they can't get away because they see no alternative, and that's a form of coercion. It's a mental coercion."

Chibbaro's notes about the New York scene contain a reference to "Det. Rothstein." New York Detective Jim Rothstein would later become a major investigator in the disappearance in 1982 of 12-year-old West Des Moines paper boy Johnny Gosch.

The Chibbaro notes claim that a driver for Friendly Models named "Phil" would regularly drive underage models to an East Capitol Street address that housed congressional pages.

The reporter's notes also indicate that the FBI task force investigating the pedophile prostitution ring had purchased two books by author Clifford Linedecker, "Children in Chains" and "The Man Who Killed Boys," the latter a book about serial killer John Wayne Gacy.

Investigator Smith testified that he first began assisting the New York City Police Department in 1977 and 1978 in the arrest of a juvenile call service operator named Paul Abrams operating out of the West Side of New York. Smith testified that Abrams' service involved children. After pleading guilty to the charge of prostitution, Abrams received probation. In answer to a question from Senator Bernstein, Smith said the courts were not doing enough to help law enforcement deal with the juvenile prostitution problem. He testified: "There doesn't appear to be any support from the courts."

In answer to a follow up question from Bernstein about legal services provided for call service operators, "Did you find any central attorney or firm of attorneys representing these people?" Smith responded, . . . in Washington, there have been various attorneys that will show up that will handle the defense for a number of call services."

Smith left New York for Washington after working at Policy Sciences Center in New York working on organized crime cases. Smith returned to New York from Washington in 1982 to assist the committee's investigation. Smith began investigating two bars in New York connected to the male juvenile prostitution trade. He named them in testimony as the Follies Theater and Dallas. He said the Follies had live sex shows involving "underage kids." Smith described drug use among the juvenile prostitutes that involved marijuana, cocaine, and amphetamines.

Smith also testified that he did not believe the New York State Liquor Authority had ever sanctioned the bars that were catering to juvenile prostitutes. The Haymarket and Follies Theater remained open after the news about the ring surfaced in the media. Smith proceeded to name a number of other New York bars that were employed underage boys, including the Gaiety Burlesque Theater at 201 West 46th Street; Eros II at 732 8th Avenue; Big Top Cinema on 49th Street; Male World at West 42nd and 8th Avenue; King's Cinema at 235 West 50th Street; the 55th Street Playhouse at 53rd Street near 6th Avenue; David at 236 West 54th Street; The Adonis at 8th Avenue and 50th Street; The Night Shift at 777 8th Avenue; and the Ninth Circle in Greenwich Village.

Smith identified the operator of the Follies as a William Oates and said he operated a similar establishment in Washington called Cinema Follies, as well as one in Pittsburgh called The Best of Both Worlds. Smith said the kids would be transported between New York, Washington, and Pennsylvania. Smith also said there was a Florida connection to the juvenile prostitution business that involved a south-Florida based magazine called "Blue Boy" and a Fort Lauderdale hotel, the Marlin Beach Hotel. Smith assisted Florida police in their investigation of the Florida ring as well as the Arlington, Virginia police in their investigation of two call services, Friendly Models and The Stables. Smith also investigated a pedophile magazine published in New York called "Laddie."

Smith identified other Manhattan bars involved in the juvenile sex trade, incluidng The Haymarket on 8th Avenue.

But it was Smith's testimony about what Washington call service accountant Robert Koehler told him about foreign intelligence agents buying juvenile call boy clients lists that was the bombshell dropped during the committee hearing. The following is the verbatim transcript:

"MR. SMITH: Through an investigation I worked on in Washington, I was able to go in under cover and interview the owner, one of the owners of the Stables' call service.

MR. MCKENNA: Did he tell you anything that surprised you concerning their operation?

MR. SMITH: Basically, this individual confirmed several vital pieces of information that I had received from other sources. He had also added that a lot of the money from the call service was being invested in real estate in the Washington area.

MR. MCKENNA: Did he discuss with you any sidelines that had become very profitable?

MR. SMITH: The operator of this service, no.

MR. MCKENNA: Did you ever have occasion to talk to a Mr. Koehler?

MR. SMITH: Yes, I did.

MR. MCKENNA: And what was his function in these operations?

MR. SMITH: Mr. Robert Koehler is an accountant for several years of several call service operations in Washington.

MR. MCKENNA: Did he discuss with you the profitability of these operations?

MR. SMITH: Yes, he did.

MR. MCKENNA: Did he tell you they were making profits besides call service itself?

MR. SMITH: Yes, they were.

MR. MCKENNA: How were they doing that?

MR. SMITH: Through the sale of information on the sexual proclivities of the clients to agents of foreign intelligence services.

MR. MCKENNA: Were there any other call service operators you were able to interview?

MR. SMITH: Yes, there was.

MR. MCKENNA: Do you remember what his name or their names were?

MR. SMITH: One call service operator in Alexandria, Virginia, by the name of Johnathan Christopher Reynolds, III.

MR. MCKENNA: And what was the name of his call service?

MR. SMITH: It was Brian's Boys and Fantasies Unlimited.

MR. MCKENNA: And was he also selling information out of the call services?

MR. SMITH: He stated so.

MR. MCKENNA: Did he say who he was selling them to?

MR. SMITH: To British and Israeli intelligence.

MR. MCKENNA: Did you have occasion to investigate in Washington a person by the name of William Oates?

MR. SMITH: Yes, I have.

MR. MCKENNA: Did he have any operations going in Washington?

MR, SMITH: The Cinema Follies.

. . .

MR. MCKENNA: Did you ever develop information as to any other intelligence aervices that were buying information, foreign intelligence services?


MR. MCKENNA: Which one was that?

MR. SMITH: The Soviet Military Intelligence was named as one of the agencies of the foreign intelligence services that was purchasing information from the call services in Washington.

MR. MCKENNA: Did you ever more or less confirm that on your own?

MR. SMITH: I don't know whether I had confirmed it to the satisfaction of the committee or not.

MR. MCKENNA: Were you satisfied?

MR. SMITH: I was satisfied.

MR. MCKENNA: Were you debriefed by someone you thought was a foreign intelligence officer?

MR. SMITH: No, I was not personally -- I -- I -- I was not personally debriefed by a foreign intelligence officer.

MR. MCKENNA: Were you questioned?

MR. SMITH: I have had contacts with foreign intelligence officers."

The Chibbaro notes contain a statement from someone who worked at Washington's Chesapeake House, one of the juvenile prostitution bars under FBI and CIA surveillance. The source stated on May 26, 1981, that "all sorts of international intrigue surrounds the gay outcall services that would shock the general public. Many U.S. officials in the military and in civilian life patronize these services." Another source said the Naval Investigative Service (NIS) was conducting a major investigation of sexual blackmail of the out call services clients involving Naval personnel at the Pentagon.

One Chibarro source who worked for the Stables said he met a man at Chesapeake House who claimed to work at the British embassy. The source claimed the man had some sort of "State Department-issued" diplomatic ID card. When the British man discovered that the source had worked as an intern in the office of Representative Mickey Edwards (R-OK), he was asked to provide "information regarding government contracts for tanks (and other military equipment) to be provided to NATO bases. In particular the British man wanted information on a Chrysler tank contract and bids and prices. The source said the man seemed to be more a corporate intelligence collector rather than a foreign intelligence agent. The source was paid $1500 cash by the British man for the information obtained by the source's contacts on Capitol Hill.

That international intrigue was involved in the call boy scandal was an understatement. According to Chibbaro's notes, other members of the House of Representatives linked to underage call boys, included Rep. Larry McDonald (D-GA), who was the second President of the extreme right-wing John Birch Society and an opponent of federal aid to homosexuals [McDonald was a passenger on the ill-fated Korean Air Line flight 007, shot down by the Soviets on September 1, 1983. In 2001, the International Committee for the Rescue of KAL 007 Survivors, based on the research of an Israeli research center, claimed McDonald survived the KAL 007 shootdown and was taken to Moscow for interrogations and debriefings]; Rep. Roy Dyson (D-MD), who became embroiled in a scandal involving his chief assistant Tom Pappas over Pappas' sexual proclivities with young male staffers; Tom Pappas, Dyson's aid who was said to have leaped from a New York City hotel to his death on May 1, 1988, the day the story concerning his alleged sexual misconduct in Dyson's office hit the papers; Rep. Micky Edwards (R-OK) who was a founding trustee of the right-wing Heritage Foundation but who said he voted for Barack Obama in the last election; and Rep. Gerry Studds (D-MA), censured by the House in 1983 after he admitted to having an affair with a 17-year old male page. Studds died in 2006 after suffering a pulmonary embolism.

Ironically, Dyson's predecessor Bob Bauman (R-MD) resigned after he was charged with propositioning a 16-year old male for sex.

The list also contains the names of Robert Gray, Ronald Reagan's 1981 Inaugural Committee co-chairman. Gray was a board member of Consultants International, the suspected CIA front company founded by Edwin Wilson, a close colleague of the CIA's infamous "Blond Ghost" Ted Shackley. "The Deep Backgrounder," in its July-August 1982 issue, described Gray as a "specialist in homosexual blackmail operations for the CIA" in an article with the headline, "Reagan Inaugural Co-Chairman Powerful 'Closet Homosexual'?"

Wilson's colleague Frank Terpil described Wilson's main function at the CIA as "to subvert members of both houses [of Congress] by any means necessary... Certain people could be easily coerced by living out their sexual fantasies in the flesh... A remembrance of these occasions [was] permanently recorded via selected cameras... The technicians in charge of filming. . .[were] TSD [Technical Services Division of the CIA]... The unwitting porno stars advanced in their political careers, some of [whom] may still be in office."

There is an interesting postscript to the Marino Senate hearing. The Follies Theater sued Marino for slander made about the establishment during the testimony by Smith. Smith had mentioned that judges and courts were not helpful in stopping the juvenile prostitution. Based on the actions of one New York judge, Smith appears to have been right on the money. Judge Arnold Fraiman refused to dismiss the slander claim against Marino in the case Oates v. Marino. In effect, Fraiman, in his ruling, permitted the operator of the Follies Theater to conduct discovery of all materials and information collected by the Senate investigation, including the identities of confidential informants.