DC Madam had CIA ties - Wayne Madsen Report

July 22, 2009 -- DC Madam had CIA ties
publication date: Jul 22, 2009
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July 22, 2009 -- DC Madam had CIA ties

WMR has learned from a source who was involved in the sex escort business at the same time the late "DC Madam" Deborah Jeane Palfrey was operating her Pamela Martin & Associates escort agency that Palfrey had a relationship with the CIA dating back from the time she was released from prison in 1993. Palfrey was arrested in 1990 for "pimping, pandering, and extortion" after being arrested for running an escort service in San Diego, California. She attempted to flee to Canada but was arrested at the Montana border and was convicted of the criminal charges and sentenced to 18 months in prison.

Palfrey, according to WMR's well-placed source, cut a deal for an early release from jail with the CIA, specifically San Diego native Kyle "Dusty" Foggo, a longtime CIA "logistics officer" who spent a number of years in Germany and Austria. WMR has learned that among Foggo's logistics duties was running a CIA escort ring internationally and domestically that ensnared politicians and businessmen for purposes of later blackmail. Foggo's deal with Palfrey was for her to start up another escort service, Pamela Martin & Associates, after her release from prison. The quid pro quo was that Pamela Martin would carry out assignments from the CIA and, specifically, Foggo. During his CIA career, Foggo, was also assigned to Honduras where he worked under U.S. ambassador John Negroponte.

Palfrey's escort service operated from 1993 to 2006 without one arrest of either her or any of her "employees," all well-educated professional women, which included a psychologist, a U.S. naval officer, and a legal secretary for the powerful Washington, DC firm Akin, Gump, Strauss, Hauer and Feld.

Palfrey was indicted on March 1, 2007 on running a prostitution ring, as well as other charges. The indictment stated that employed more than 100 women between 1993 and 2006 "for the purpose of engaging in prostitution activity with male clients, including sexual intercourse and oral sex in exchange for money."

Interestingly, federal agents never seized Palfrey's phone records from her escort business from her Vallejo, California home. When the government realized its error, it succeed in having US District Court for Washington, DC judge Gladys Kessler issue two temporary restraining orders prohibiting the release of the records to the public. Kessler finally lifted her restraining order and expressed bewilderment why Bush-appointed federal prosecutors in Washington, DC were so intent on prosecuting Palfrey while letting her clients off the hook for engaging in what the government claimed was an illegal act -- prostitution.

The reason was simple. A number of powerful politicians and government officials were among Palfrey's clients. Those publicly identified included Senator David Vitter (R-LA); Assistant Secretary of State for Foreign Assistance and U.S. Agency for International Development (USAID) administrator Randall Tobias (also a former chairman/CEO of AT&T International and Eli Lilly); Harlan K. Ullman, a Defense Department consultant, friend of Dick Cheney, and author of the "Shock and Awe" military doctrine; Democrat-turned-Republican political consultant Dick Morris; and Ronald Roughead, a retired Marine Colonel, SAIC Project Manager and brother of Admiral Gary Roughead, the Chief of Naval Operations.

WMR also reported that Cheney was a "client" of Pamela Martin escorts while he was the President and CEO of Halliburton. However, we have learned more. In 1993, after the U.S. assault on the Branch Davidian compound in Waco, Foggo, Cheney, and Karl Rove set up an office in Dallas to handle the sexual blackmail of law enforcement officials who were sent to Waco to investigate the government attack but who may have felt compelled to become "whistleblowers" later. The CIA's interest was to prevent any revelations about the agency's involvement in the siege of and assault on the religious compound. Escorts from Palfrey's operation, as well as one operating out of Houston were used for the operation against the law enforcement officials.

In time, Foggo became the unofficial CIA chief of the agency's sexual blackmail operations. Rove used the service to bring to heel wayward politicians to ensure their loyalty to the Republican Party and, eventually, the Bush-Cheney administration.

A few weeks before Palfrey was indicted, her friend and "boss" Foggo was indicted on February 13, 2007, for fraud, as well as bribery in connection with the bribery conviction of San Diego Republican U.S. Representative Randy "Duke" Cunningham. But the cases against Foggo and Palfrey may have eventually included others, but U.S. Attorney for Southern California, Carol Lam, was apparently getting close to the Rove-Cheney sexual blackmail operation that also involved Foggo and the employees of Pamela Martin & Associates. Lam was on the target list for being fired by the Bush White House and the Justice Department under Attorney General Alberto Gonzales. Just two days after Lam successfully brought an indictment against Foggo and his friend and GOP lobbyist, ADCS (Automated Document Conversion Systems) owner Brent Wilkes was indicted for bribery in the Cunningham case, she abruptly tendered her resignation as U.S. Attorney. Wilkes had procured Pamela Martin escorts for "poker parties" at the Watergate Hotel and Westin Grand in Washington, DC. Allegedly in attendance at the parties were Cunningham, Goss, and Foggo.

On May 11, 2006, Kyle Sampson, Gonzales's chief of staff and counsel, e-mailed White House counsel William Kelley on "the real problem we have right now with Carol Lam." On May 12, 2006, FBI agents seized documents from Foggo's CIA office, where he served as Executive Director under CIA director Porter Goss, and his Vienna, Virginia home. Goss appointed Foggo Executive Director, the number three position at the CIA, to the surprise of many seasoned CIA professionals. At that point in time, federal prosecutors still did not have enough evidence to bring an indictment against Palfrey. On May 5, 2006, Porter Goss resigned as CIA director. Reports at the time say he had clashed with Director of National Intelligence John Negroponte. However, Goss and Negroponte had one tihing in common: they were both close to Foggo.

Foggo's background was logistics, not standard clandestine services. However, it is now known that Foggo's "logistics" services were the ultimate in clandestine operations: sexpionage and blackmail. Jim Olson, a former CIA station chief, was quoted in The Washington Post as saying Foggo "failed to report a number of his contacts with foreign national women." It has also been reported that Foggo frequented bars in Tegucigalpa, Honduras known as hangouts for prostitutes while he worked for Negroponte in the 1980s.

It now appears that Foggo's failure to report such contacts was part of his highly-classified sexpionage functions. WMR has learned that Foggo had offices in Vienna, Austria and Bangkok that coordinated the activities of CIA prostitute employees. However, WMR has also learned that more than one "madam" complained that Foggo was using American escorts to transport illegal drugs as "CIA mules."

On October 25, 2007, WMR's report was as follows: "WMR has previously reported that Pamela Martin & Associates (PMA) phone records showed phone calls from Poway, California, a suburb of San Diego, and the headquarters of ADCS, Wilkes' firm. On July 9, 2007, WMR reported: 'There are several calls between PMA and a Poway cell phone number in January 2006, just three months before the Shirlington Limousine-Wilkes-Wade-Cunningham story hit the newspapers. Palfrey maintained a residence in Escondido, also the home town of Cunningham, during this time frame. Palfrey does recall that someone using the first name of 'Brett' or 'Brent' did phone the agency on occasion from the San Diego area.'"Based on more recent information, it now appears that the calls from Poway were from Brent Wilkes, Foggo's friend and indicted co-conspirator.

WMR has also recently learned from another escort business source that the "poker parties" at the Watergate and Westin Grand entailed the guests viewing secretly taped videos of people set up in sex stings. The guests viewed the videos while playing poker. Some of the sting "victims" in the secret videos reportedly included Republican politicians, foreign diplomats, and Bush administration officials.

WMR provided details of the poker parties and limousine service that ferried escorts to the affairs on March 19, 2008:

Weeks prior to the beginning of the trial in Washington, DC of accused "Washington Madam" Deborah Jeane Palfrey, WMR has learned of a critical link between Palfrey's former Pamela Martin & Associates (PMA) escort form and Shirlington Limousine and Transportation Service of Virginia, the GOP-connected limousine service that not only received $21 million in contracts from the Department of Homeland Security but was connected to the "poker parties" at the Watergate and and the Westin Grand Hotel hotel involving CIA director Porter Goss, CIA Executive Director "Dusty" Foggo, House Intelligence Committee staffer Brant "Nine Fingers" Bassett, and California Representative "Duke" Cunningham were reportedly in attendance.

Palfrey contends that she and her escort service were singled out for selective prosecution because of the connections between her employees and top Republican officials. Her trial begins at the US District Court in Washington, DC on April 7.

The revelations about the PMA connections arise from a phone call made to Harper's magazine on May 9, 2007, just as the Pamela Martin story and its links to top Republicans were hitting the main stream media, particularly an ABC 20/20 report on the firm's top Bush administration clients. WMR has learned that a one-time escort for PMA phoned the magazine with a story about her experience in being ferried around Washington for encounters with important clients by Shirlington Limousine. Apparently, the phone call from the escort was taken by a Harper's intern who subsequently "lost" her number requiring the magazine to publish the following appeal:

TITLE
Missed Connection
DEPARTMENT Washington Babylon
BY Ken Silverstein
PUBLISHED May 9, 2007

A very important phone call regarding Shirlington Limousine came through the Harper’s offices today, and unfortunately the person who called was not provided with my phone number. Could that person please contact Harper’s again–(212) 420 5740–and ask for Paul Ford, who will provide, in strictest confidence, all the information she needs in order to contact me.

The escort reportedly never re-established contact. [WMR extends an invitation to the aforementioned individual or any other escort of PMA to contact us at wmreditor@waynemadsenreport.com. Strict confidentiality is assured from this end].

On July 9, 2007, WMR reported on the nexus between PMA and firms associated with the Cunningham and GOP lobbyist scandal:

"An examination of the phone records of PMA from the mid 1990s to about 1997 reveals that calls were placed by the agency mostly to land line phones at offices, homes, and hotels. Calls were also placed by PMA to the escorts, who were independent contractors for the firm. Towards the end of the 1990s and the new decade, more cell phones were used to make calls and landline use drastically tapered off.

As cell phone numbers became more portable, the records from 2001 to 2006 show a number of non-Washington area cell phone numbers increasingly used to phone PMA from the Washington DC area, particularly numbers from Georgia (Atlanta), Texas (San Antonio), West Virginia, North Carolina (Raleigh), South Carolina (Columbia), Illinois, Florida (West Palm Beach), and California (La Jolla and Poway).

Poway, just north of San Diego, was the headquarters of ADCS, Inc. and its subsidiaries. ADCS was the company headed by Brent Wilkes, a key GOP figure involved in the scandal that sent San Diego Republican Congressman Randy 'Duke' Cunningham to prison for various felonies, including bribery. Cunningham was also linked to the use of prostitutes on his MZM, Inc.-supplied yacht, the 'Duke-stir,' Cunningham's party boat located in the Washington Marina. MZM was headed by GOP contributor Mitchell Wade who pleaded guilty to paying bribes to Cunningham in February 2006.

Wade admitted to federal investigators that he had an arrangement with Shirlington Limousine, which had an arrangement with an escort service to transport prostitutes to suites at the Watergate Hotel and the Westin Grand paid for by Wilkes. The suites often hosted 'poker parties,' at which Cunningham, former CIA Director Porter Goss, Goss' House Intelligence Committee staffer Brant 'Nine Fingers' Bassett, and Goss' Executive Director Kyle 'Dusty' Foggo were reportedly in attendance.

There are several calls between PMA and a Poway cell phone number in January 2006, just three months before the Shirlington Limousine-Wilkes-Wade-Cunningham story hit the newspapers. Palfrey maintained a residence in Escondido, also the home town of Cunningham, during this time frame. Palfrey does recall that someone using the first name of 'Brett' or 'Brent' did phone the agency on occasion from the San Diego area.

Cunningham resigned from Congress in November 2005 after pleading guilty to receiving bribes from Wilkes and Wade.

WMR has determined that the PMA escort business was, in addition to several other notable Washington hotels, centered on two hotels close to the White House: the St. Regis Hotel and the Capitol Hilton, which are across the street from one another on 16th Street, a few blocks north of the White House.

The nexus of the prosecution of Jeane Palfrey and the Cunningham-Wilkes-Wade-Shirlington Limo case is noteworthy. Palfrey's case also involves the sacked U.S. Attorney for Baltimore, Tom DiBiagio, who was investigating Republican Governor Bob Ehrlich's staff for use of prostitutes and other corruption. DiBiagio was fired by the Justice Department for pursuing the case against Ehrlich. U.S. Attorney for San Diego Carol Lam was fired, in part, for her aggressive prosecution of Cunningham and his cronies."

Wilkes was sentenced to 12 years imprisonment on February 19, 2008 for bribing Cunningham in return for lucrative government contracts. Mitchell Wade, the former owner of MZM, Inc., who pleaded guilty to paying more than $1 million in bribes to Cunningham in return for defense contracts, admitted that Wilkes set up a prostitution ring using Shirlington. The deal between Wilkes and Shirlington reportedly extended back to 1990. PMA started its business three years later. Cunningham pleaded guilty on March 3, 2006, to multiple charges against, including bribery and wire fraud, and was sentenced to over eight years in prison.

The DiBiagio firing is also noteworthy. On January 26, 2007, just a few weeks before the indictments of Foggo, Wilkes, and Palfrey, and the resignation of Lam, another Pamela Martin escort, Brandy Britton, a former University of Maryland professor who was later charged with, was found hanging in her Ellicott City, Maryland home. Britton had been charged with prostitution by the state of Maryland in 2006. Her clients had, according to Britton, included police, attorneys, and judges. One named client in seized records was named "Robert." U.S. Attorney for Maryland DiBiagio was investigating top Maryland officials for corruption and involvement in prostitution. DiBiagio was one of the first U.S. Attorneys fired after George W. Bush's re-election in 2004. One of DiBiagio's targets was Maryland Republican Governor Robert Ehrlich.

DiBiagio had already won a conviction against Ehrlich's state police superintendent Ed Norris for using police funds while he was Baltimore police commissioner to pay for prostitutes, including those from Pamela Martin. At the time that DiBiagio was investigating Ehrlich, Palfrey came under investigation by the Internal Revenue Service in Baltimore for tax fraud and the US Postal Inspection Service for mail fraud, both arising from her escort business. DiBiagio, knowing that Palfrey could lead him to "bigger fish," never apparently entertained indicting her in his jurisdiction.

Britton was found hanging by her daughter. Ironically, on May 1, 2008, Palfrey would be found hanging by her mother at the mother's home in Tarpon Springs, Florida. Both hangings were concluded to be "suicides."

Palfrey was convicted on fraud and prostitution charges on April 15, 2008, in Washington, DC. She committed "suicide" on May 1, 2008, prior to her sentencing in July.

Foggo originally pleaded "not guilty" at the U.S. Courthouse in San Diego to 30 counts of fraud, conspiracy, and money laundering. However, the CIA convinced the Justice Department to move the case from San Diego to the Eastern District of Virginia in Alexandria, where the CIA has substantial influence to limit fallout from such cases involving its personnel.

Foggo ultimately pleaded guilty on September 28, 2008, to a single count of wire fraud after the government dropped 27 other charges in the U.S. in Alexandria. Foggo had earlier threatened to expose the CIA's most hidden secrets in an earlier prosecutors court filing: "[Foggo threatened] to expose the cover of virtually every CIA employee with whom he interacted and to divulge to the world some of our country's most sensitive programs—even though this information has absolutely nothing to do with the charges he faces." It now appears that among those "sensitive programs" was sexual blackmail involving Palfrey's escort service, among sleect others.

Foggo successfully turned "blackmail" into "graymail" and received 37 months in prison in February of this year. He could have received 20 years. US Judge James Cacheris, who, along with his brother, defense attorney Plato Cacheris who has defended a number of CIA and FBI agents charged with espionage, acts as the CIA's protectors in the eastern Virginia district, told Foggo his lawyers "have done a good job for you in this case." The deal meant that Foggo would remain silent and the CIA's involvement with blackmailing U.S. politicians and foreign officials, said to include Russian and Chinese diplomats in Washington, as well as Arab princes and oil ministry officials, would remain safe from disclosure However, as reported by WMR, Pamela Martin's clients also included Dick Cheney while he was the head of Halliburton. Cheney's secret was that he engaged an escort at least once and paid her to straddle a glass top table with Cheney underneath. The escort then evacuated her bowels on the table while Cheney watched. CIA sources told WMR that Cheney used the name "Bruce Chiles" when dealing with the escort service and that most of his encounters took place in McLean, Virginia.

WMR has also learned that Foggo traveled to Vienna, Austria a number of times since his wife is an Austrian national, itself an oddity for a senior CIA official. WMR previously reported: " . . . it is a certainty that one of the actual 'corporate clients' of the PMA [Pamela Martin & Associates] agency was the CIA itself."

On September 1, 2007, WMR reported:

"WMR has learned that on August 31, Deborah Jeane Palfrey, the indicted Pamela Martin & Associates proprietor, filed a 'Motion for Pretrial Conference to Consider Matters Relating to classified information' under the 'Classified Information Procedures Act' with the U.S. District Court in Washington, DC. The purpose of the filing alerts the government that Palfrey's defense will likely involved the disclosure of evidence and identities presently deemed 'classified" by the U.S. government.'"

The CIPA is only invoked in cases when classified national security information must be revealed. It is now clear that Palfrey, who never admitted to this editor any links between her agency and the CIA, was a contractor for the spy agency. Palfrey's citing of CIPA is an indication that she signed a non-disclosure agreement with the CIA stating that she would never reveal classified information as a result of her special relationship with the agency unless authorized to do so. Palfrey's non-disclosure agreement would have resulted in her making no comment to the press about any relationship However, it must be stated that Palfrey always insisted to this editor that it was quite possible that some of her employees may have had a relationship with U.S. intelligence but that she would not necessarily know that to be the case.

Palfrey was never comfortable with her court-appointed attorney Preston Burton. Burton once was a partner in the law office of Plato Cacheris in Washington. Cacheris' name is synonymous in DC circles with CIA scandals, particularly those dealing in espionage. Burton's resume of clients is a "Who's Who" of the past two decades of spy scandals: the CIA's Soviet spy Aldrich Ames, the FBI's Soviet spy Robert Hanssen, Oliver North's secretary Fawn Hall, Watergate convicted Attorney General John Mitchell, and Monica Lewinsky. Burton, himself, was involved in the defense of Ames, Hanssen, Lewinsky, as well as Ana Belen Montes, a former Defense Intelligence Agency analyst convicted of spying for Cuba.

The top CIA cases involved the US Eastern District of Virginia court in Alexandria, where Plato Cacheris' brother, James Cacheris, serves as a senior judge. Known as the 'rocket docket,' Plato and James Cacheris have overseen a number of espionage cases, including Ames, that saw quick pleas and lifetime prison sentences. Mention the name Cacheris in Washington, DC and CIA comes instantly to mind among those who know the game. Palfrey was obviously aware of the CIA's past use of 'rocket dockets' in Alexandria and Washington and the 'exchange' of emails between U.S. Judge James Robertson, federal prosecutors William Cowden and Daniel Butler, and Burton on the weekend before Burton agreed to not call any defense witnesses and allow the case to be sent directly to the jury was a sure indication of outside interference in the case. Robertson, who replaced Kessler after she requested to be reassigned, promised to reveal the emails to the public, indicating he was legally required to do so. To date, to our knowledge, they have not been released. . .

There is another interesting postscript to the Palfrey case. Palfrey, after deciding to close down PMA and move to Europe, chose to buy an apartment in the former East Berlin. This editor discussed this with Palfrey and the consensus was that, for European prices, there were some good deals on real estate in eastern Berlin as the former Soviet sector has lagged behind in improving infrastructure. However, it was intriguing that Palfrey, who spent her time mostly in California and Florida, would have known about a good deal in East Berlin. Or did one of her agency handlers recommend it as the perfect place to get away from the 'game' in Washington?"

Based on Palfrey's relationship with Foggo, it now appears that Foggo, as the CIA's logistics chief in Frankfurt, Germany, would have known about the availability of CIA safe houses for sale, including the East Berlin apartment that Palfrey was to purchase for $70,000. Foggo reportedly saw Palfrey while every time she visited Germany. After Palfrey wired $70,000 to Germany on September 28, 2006, the IRS and Postal Inspection agents ratcheted up their investigation of Palfrey. At the same time, the Justice Department and Lam were closely on the heels of Foggo.

Other than Palfey's desire to invoke the CIPA, there are two other indications that she was involved with the CIA's sexpionage operations. One is that U.S. District Judge Gladys Kessler, Palfrey's original trial judge and a person who seemed sympathetic to Palfrey's plight and demanded to know why federal prosecutors were not interested in pursuing the escort service's clients, was asked to be reassigned rom the case in December 2007. U.S. Judge James Robertson, who had connections with U.S. intelligence as a one-time member of the Foreign Intelligence Surveillance Court, replaced Palfrey. The second is more personal. After Palfrey requested this editor to take the stand in her defense and testify about the identities of her service's clients, including Cheney, I visited the law offices of her attorney in Washington, DC. Present was a disagreeable individual who grimaced every time I mentioned a possible connection between Pamela Martin and the CIA. I was later told he was there to protect the interests of the CIA in the case.

There is yet another postscript to this story. WMR has learned that the political fallout from the CIA's sexpionage program still affects politicians. Senator John Ensign (R-NV) was warned by the Gonzales Justice Department and Rove not to make waves over the firing of U.S. Attorney Dan Bogden in the massive firing of U.S. Attorneys following the 2004 presidential election. Bogden had been recommended by Ensign. Ensign's current sex scandal involving a legislative aide on his staff who was also his mistress and who received "hush money" is an outcome of his refusal to back down on investigating the Bogden firing matter.