“grouped data package.' It lists the entirety of CIA real property holdings and personnel assets in the United States as of 13 January 1975; accordingly, release, unauthorized disclosure, or loss of this information would have severe' operational impact on the activities of CI”
“Office of General Counsel. This internal board of the project made investment decisions. * Escrow accounts are established when an agent cannot receive his full payment from the CIA without attracting suspicion. The funds not paid to the agent go into escrow accounts and are”
“-107- $31 million, most of which are held outside the U.S. The companies do not write insurance in the United States, but rather reinsure with cooperating companies who then sell the risk to the CIA for a percentage -of the premium. The policies are written directly abroad.”
“new missions, as noted, would require CIA to amend the MUTUAL Administrative Plan. But this could be done quickly; the existence of the shells avoids the leadtime of creating new corporate entities, with all the complications of local laws and risk of exposure.. While CIA pr”
“so & SECT 009-. 53% Llko 87 MEMORANDUM SUBJECT: Project MHMUTUAL Project MHMUTUAL will be operated in conformance wit. appropriate legal restrictions. Arrangements are being made for the briefing of the appropriate Congressional committees.' particular attention wil”
“operational funds of the CIA into private fields without explicit DCI authoriza tion. Actually, the existence of proprietary enterprises which, on occasion, return sizable profits, affirms that private investment has indeed been a widespread Agency policy. Moreover, the Agen”
“fund" (presumably referring to MHMUTUAL), the procedures for reimbursing the State Department for cover and support, proprietaries (how created, their justification, value and effectiveness), safe houses and."CA cadres." Mr. Anderson reluctantly agreed to Mr. Shackley’s re”
“P hone (A re a 2 0 2 ) 5 4 4 -6 0 0 0 TOP SECRET 65 1 interest was in the foreign field. And I don’t remember them 2 staying, for instance, let's get into copper, it is going to o be in very short supply in Peru or whatever. I don't remember 4 any discussion of that sort.”
“6 C . MEMORANDUM • ' SUBJECT: Project MHMUTUAL Project MHMUTUAL will be operated in conformance with appro- priate legal restrictions. Arrangements are being made for the briefing of the appropriate Congressional committees. Particular attention will be given to avoiding”
“-144- that all CIA proprietaries have an operational charter approved by Congress which forbids launcing activities by proprietaries or using their funds which are contrary to the charter. This internal CIA standard would probably strengthen the existing requirement that co”
“SECRET PLANS, PROGRAMS, AND PROJECTS HR 230-8 8. ADMINISTRATIVE PLANS, LIQUIDATION PLANS, AND FISCAL ANNEXES a. GENERAL (1) In the furtherance of some Agency objectives it is necessary to establish, operate and support overt instrumentalities which do not have ostensible a”
“- 45 - LPBYZAS/3 A European company with no employees which holds the Agency’s interest in another European company which was used in the past to provide cover for one Agency employee. This company is being retained solely for the purpose of holding an Agency investment. Un”
“-145- providing the Agency services. Much more investigation is needed here, and we encourage the new oversight committee to study this issue in greater detail than we have been able. Probably this is one area where exclusion of the General Account- ing Office from CIA audi”
“-106- The Inspector General was invited in, according to Houston. In addition, the Finance Office kept its own books- in the proprietary accounts branch on MUTUAL. Such reviews were done, he said, "on a constant basis." We were very conscious of the amount of money in vol”
“/ SECRET under section 8(b) of the CIA Act of 1949. I am informed that when an expenditure of this type is recorded on Agency books, nevertheless, a memorandum account is maintained so that.the Agency has a record of the precise amount of Government funds invested in the pr”
“- 32 - PI 49. MHRUCHE A Liechtenstein anstalt which is a general use standby asset; no employees. 50. MHCLUMP A Liechtenstein anstalt which serves as a standby asset . for general reinsurance use; no employees. 51. BGJASMINE A European insurance and reinsurance company”
“reconcilable with Agency financial records; d. the highest degree of cover and security compatible with the overt ■ character of each instrumentality and its operation or support objectives; . the effective Agency control of funding to, and assets held by, the instrumentali”
“-139- levels of expenditure, and at least approximate indications of performance through comparisons of past and proposed funding by activity. As applied to proprietaries, the CIA, perhaps, should have been providing a whole family of schedules for the proprietaries which a”
“(ii) V. The Disposal of Agency Proprietaries 59 a. An Overview 59 Entities Dissolved 63 Entities Sold 68 Entities ’’Otherwise Disposed Of" 71 Description of Disposition of Entities Sold or Otherwise Disposed Of ...................... 74 b. The Sale of SouthernAir Transpo”
“- 16 - investment, and profits situations of the corporations in the context of the operational objectives and the cover needs of the corporations. In effect the annual project review is based upon an audit as searching as that required for statutory Government corporations.”
“continue. Today, the CIA operates 45 major proprietaries, of which 25 are in the process of liquidation. The 16 biggest proprietaries did a gross total of $4 million business in 1975, compared with an average volume of $75 million annually in the heyday period of proprietari”
“21 - IV. A DESCRIPTION OF THE VARIOUS PROPRIETARIES The operational needs of the Agency have required it to venture forth into many areas where proprietaries were a perceived necessary vehicle. These areas have included air support, media publications. proprietary manageme”
“as Miscellaneous Receipts and shall not be withdrawn or applied, except in consequence of a subsequent appropriation.. 7. Where the Agency makes funds available to establish a proprietary .or to add additional investments, the funds arc recorded on Agency books as having be”
“- 96 - of deposit. * LPDICTUM/LPSPICE was an investment company which was dissolved. As of March 31, 1973, it had invested $100,080 in Petrolcos Mexicanos, S.A. Mexico. . HBSANDSTRAP is a Delaware corporation located at Washington National Airport which has provided secur”
“- 97 - to collect the proceeds from the sale of Agency proprietary entities and to refund such proceeds to the Agency. At December 31, 1973, its total assets were $650,220 and its total liabilities were $633,897. Total stockholders equity was $16,323. It has no employees. As”
“these companies that we had in 21 this insurance complex appeared to have the substance any 22 insraance company would be expected to have. Actually, the 23 t : whole fund for all of them was managed as a central fund under 24 410 First thissone project officer. On t”
“-147- the current written policy of the Agency that "to the degree that domestic proprietary or cover companies are required, a clear justification will be developed as to the relationship of their support of our overseas operations. re In the one area of continuing large-s”
“- 6 - attributable to the U.S. Government. This function was broadened to include self-insurance for many risks involved in covert operations , including property risks incurred by operational activities of Agency- owned air and marine companies. From an early date, the comp”
“-133- Indeed, new proprietaries have, been formed within the last several years. In terms of U.S. budgetary impact, Table I indicates that proprietaries do not add much new capital to CIA available resources i.e., while they have a very large expenditure level and momentum ”
“to the White House or other Government agency has been carefully considered and approval at a higher level obtained when professionals were involved. 4. Project TWOFOLD: I believe the support we are providing to Project TWOFOLD is an activity that should be • reported under”
“-140- budget year ahead. For any other Federal agency, the notion of establishing a new publicly owned enterprise without advance notice to the Appropriations and substantive committees of Congress would be proscribed. For the small-scale proprietaries, those which require ”
“w MEMORANDUM SUBJECT: Domestic Proprietary Companies Corporate cover, as managed by the Cover and Commercial Staff, is an appropriate support for pur overseas operations. To the degree that domestic proprietary or cover companies are required. a clear justification wi”
“-134- kinds realized in 1975 ($4 million), the total gross income would have aggregated $116 million. Actually, the CIA reports that for this for this period gross income aggregated at $1,606 million. By this measure, CIA’s biggest proprietaries are shadows of their former ”
“information, supplemented by interviews with project personnel: 2. A11 but three of the 42 terminated but hither- to unexposed project organizations and 24 of the 55 or ganizations which actually had no Agency ties are some how related to project organisations or funding i”
“14-00000 . Ramparts • 203 W. 107th Street, Ant. 4C New York City, New York 10025 ■ April 5, 1968 .r. Jc Rosapepe Pudie information Division Internal Revenue Service 1111 Constitution Ave., N.W.. bashin-ton, D.C. 20224 Dear Mr. Rosapepe: Ramparts Magazine is under con”
“-3- need for proprietaries has declined as a result of a general shift in emphasis away from covert action; transfer of Radio Free Europe and Radio Liberty to the Board of International Broadcasting with funding through State Department; continuing liquidation of the assets ”
“stringent in the extreme. ’ The disposal of proprietaries has also generally proceeded along legal and ethical lines with more than due concern for con flicts of interest. Most notable in this spectrum of actions was the degree to which the Agency tried and did in fact avoid”
“13-00000 ATTACHMENT B (6) Item No. 107, 128, 129, 279 MSS pp. 123, 132, 133, 403 ■ (S) CCS states that all four items which refer to Fairways Corporation as a CIA-owned proprietary company . are still classified since they describe intelligence sources and methods by iden”
“-132- B. Size of U.S. Financial Stakes The size and variety of U.S. Government financial stakes in CIA proprietaries has already been described in great detail. The attached Table I gives an overview of proprietary income and expenditures over the years. Some 450 proprietar”
“paid to an OA by a foreign government or foreign intelligence service for goods or services rendered by the OA in legitimate, business transactions. 26. Payments to FCI assets - either OA or IA a. When deemed necessary and expedient, each SAC is authorized to expend up to $4”
“- 19 - Those proprietaries which engaged in the shipment of weapons or other items on the Munitions Control list required Agency assistance in obtaining the necessary export licenses., The ownership of the companies was discussed with State Department Office of Munitions Co”
“-131- of some 26 CIA-owned companies. In country locations where physical contact with the nearest CIA station is not operationally discreet, proprietaries can provide pay outlets and other adminis- trative services for CIA personnel and agents. On occasion, firms based in ”
“Te, 4 3 1 LUNU PROPRIETARIES :30iJK?s: .1 I. INTRODUCTION AND PHILOSOPHY OF USE Questions have arisen as to CIA's use of proprietary mechanisms to help carry out the Agency’s missions. In particular, concerns have been expressed about the Agency’s financial and management”
“spent by the proprietary f. for salaries, purchase of equipment, or for other purposes. The Agency 1 either supplemented its original expenditure with additional monies or the proprietary might have made a profit during these years. This proprietary, at Agency direction, now ”
“ostensibly by an Agency employee whose journalistic services are utilized in support of foreign operations. Proprietary Management LPPANDA Complex The below three companies support a one man accounting and management company in Europe which provides services to other propr”
“of liquidation must be returned to the Treasury as miscellaneous receipts and cannot be used to augment the Contingency Reserve or otherwise be applied to CIA operations. ’This ruling overturned the practice of the past which, on the few occasions where profits were not appli”
“14-00000 SECRET 17 July 1952 MEMORANDUM TO: Acting Deputy Director (Administration) FROM: . Acting Chief, Administrativo Staff (Special) SUBJECT: Conference with TPTONIC Management ro TPTONIC/CIA Agroamont 1. On 9 July 1952 Mr. Echolo and I conferred with the President”
“-2- and covert activities; and they provide services not securely available through normal commercial facilities. Because these instrumentalities are established as private organizations, they must be established and managed, to the extent possible, in accordance with practi”
“-104- ment. The IG looked at the investments from a security (i.e. cover) point of view in terms of MHMUTUAL’s operational support function. His concern was that each time MHMUTUAL bought a safehouse, for example, there was the possibility that audio surveillance of the hou”
“14-00000 xsil, — D * Gadauam 0279172 1 -3- press mention during NHCOWEL Annex B lists and discusses under several sub-categories the 42 organizations with which the Agency has had some direct or indirect operational ties in the past which were not cited in the press du”