A Thousand Points of Blight (January 8, 1991)


January 8, 1991

A Thousand Points of Blight

ArmeriCares, George Bush’s Favorite Charity, Dispenses Bitter

Medicine Around the World

By Russ W. Baker

Three days after Thanksgiving, when planes from AmeriCares, the private Connecticut-based relief organization, landed in Moscow, the American networks were there to gush as crates of medical supplies and food were unloaded. Each box bore the words, “To the Soviet people from the people of the United States-with love,” a slogan even the Soviet television cameras lingered over, as the crates were lowered onto the tarmac by Russian soldiers and students. It was another media triumph for Robert Macauley’s fast-growing charity empire.

This was not AmeriCares’s first venture in the Soviet Union. In 1988, when the devastating earthquake struck Soviet Armenia, burying thousands under a sea of rubble, the USSR, for the first time ever, accepted significant amounts of foreign relief assistance. First on hand with aid was a Southern Air Transport plane, whose cargo bays opened to reveal the prominent red, white, and blue AmeriCares logo. On Christmas Eve, after flying in three large shipments of pharmaceuticals and medical supplies, AmeriCares played Santa Claus, bringing in 100,000 pounds of medicines, toys, blankets, and other items designated specifically for children. That time, each package was labeled, in Armenian: “From the kids of the United States to the kids of Armenia, with love.” The airlift into the region-the scene of considerable anti-Soviet unrest-was accompanied by Jeb Bush, the president’s son, and grandson George P. Bush. For his efforts in Armenia, AmeriCares founder and chairman Robert Macauley was named ABC News’s “Person of the Week.”

Unhindered by red tape, and with U.S. military and corporate largesse at its disposal, AmeriCares gets to earthquake scenes almost before the plates stop rattling. Time and again, American television makes Robert Macauley the star of the moment, a balding, preppy Mother Teresa. And, wherever AmeriCares goes, there’s often a Bush on board, whether it’s George, or one of his sons or grandsons. When AmeriCares sent 250,000 pounds of food and medicines to provinces in rebellion against the Marxist Ethiopian government in 1985, the then vice-president was in Khartoum with Macauley to meet the plane. Bush and Macauley turned up together again at a 1987 airport ceremony in Ecuador to recognize AmeriCares’s relief efforts following an earthquake there. Even the president’s personal physician, Burton J. Lee III, sits on the group’s medical advisory committee. (Macauley and President Bush are old, old friends, and their relationship dates as far back as kindergarten in Connecticut.)

A tidal wave of acclaim has made AmeriCares and Robert Macauley famous. People magazine raved that ” ‘Saint’ Bob Macauley applies the vision of an industrial magnate and the nerves of a corporate raider to helping the world’s poor” and photographed him with Mother Teresa. Reader’s Digest lovingly limned his devotion: Macauley, returning from a trip to Africa, “was sick from intestinal parasites,” the magazine said. “His doctor advised him to stay put. But workers in Honduras had sent him a needs list. So Macauley hopped on a plane and flew down. By the time he came home, he had malaria and pneumonia.” Time, The Atlantic, and a multitude of other publications joined the chorus. Not one of them bothered to take a deeper look at AmeriCares.

If they had, they might have noticed the disturbing way in which AmeriCares resembles a private foreign-policy operation of the U.S. government, and an agent abroad for some of America’s most powerful corporations. A six-month Voice investigation of the places AmeriCares goes, the type of aid it provides, and the players involved has raised questions as to the group’s ultimate agenda. Its founder, advisory committee, and benefactors are an unlikely bunch to be running a charity: They are almost exclusively powerful right-wingers with close ties to the intelligence community, president and ex-CIA director George Bush, and the most conservative elements of the Catholic church. They have been variously associated with coups, covert actions, military counterinsurgency operations, and groups dedicated to fighting reformist and progressive movements throughout the world.

The New Canaan, Connecticut, group’s proclaimed mission is to deliver medical supplies to needy people. But sometimes, it seems more interested in the needs of its corporate donors, many of whom give the charity unpopular or soon-to-expire medicines for which they get hefty tax write-offs. In one case, AmeriCares shipped more than one million doses of vaccine for haemophilus influenza-B to the Philippines on a U.S. Air Force plane. The vaccine’s distributor had first offered it to another relief organization, which turned it down after consulting with the Centers for Disease Control. (CDC officials said the drug wasn’t worth shipping-it had been designed for children 2 years and up, although haemophilus influenza-B, a fairly rare disease anyway, is most common in infants.) But Macauley’s charity was happy to dispose of it.

In the Philippines, though, the vaccine was angrily rejected. “We concluded it would not be good for our children,” says Dr. Linda Milan, chief of the Philippine health ministry’s Foreign Assistance Service. But AmeriCares insisted it be accepted. After much bickering, the charity was eventually forced to take the vaccine back to the States, where it was passed on to another relief group, SHARE, which has many board members in common with AmeriCares. SHARE shipped the vaccine to Mexico, where it was no more useful than it was in the Philippines. One aid official says that country accepted it because “the controls weren’t there.”

AmeriCares’s seeming indifference to the donation’s unsuitability characterizes many of its operations. Such an attitude wastes valuable resources and time in poverty-stricken countries, agree knowledgeable relief coordinators and U.S. officials. “They’ve sent some stuff that wasn’t acceptable,” says Bryant George, of the U.S. embassy’s relief office in Manila. “All they need to do is consult locally.”

AmeriCares president Stephen Johnson admits the Philippine minister of health raised questions about the vaccine. “We assumed he was disappointed it wasn’t consigned to him,” explains Johnson, noting that the Catholic lay order the Knights of Malta was the actual consignee.

AmeriCares’s worldwide mission is to deliver aid regardless of “race, religion, or political persuasion.” But the group often effectively contributes to armed conflicts that worsen the plight of the needy, takes sides in those clashes, and ships the vast majority of its goods into prime ideological battlefields. Much of the charity’s aid goes to Central America, but a sizeable portion is directed toward flashpoints in the decaying Soviet empire, including Afghanistan, Ethiopia, Armenia, and Poland. Meanwhile, many of the places that most critically need medical supplies but are not deemed of “strategic interest” to the U.S., especially in sub-Saharan Africa, have been virtually ignored by AmeriCares. In fiscal 1990, AmeriCares gave $17.8 million to newly emergent Poland but a scant $59,000 to Uganda, which, with its AIDS crisis, is experiencing one of the world’s worst medical emergencies.

Though AmeriCares gets most of its media mileage from high-profile disaster relief, 80 per cent of its supplies go to long-term “established health care programs,” according to Stephen Johnson. Much of the aid is channeled into war zones in Central America, an area of great interest to the White House.

Throughout the relief community, the politics of aid are much debated. Explaining why his group stayed out of Romania and Panama, two countries where AmeriCares helped bolster U.S. “interests,” Richard Walden of Operation California wrote in a relief publication that “both crises are intimately interlinked with current U.S. foreign policy objectives (in one case, a historical fantasy come true, the collapse of a Stalinist regime; in the other, a U.S.-as-cowboy shootout’s after-effects); both are media-genic tragedies beginning their recovery appeals; and both will countenance wholesale waste of supplies….” AmeriCares had no such qualms.

As a result, the whole AmeriCares agenda is questioned by many longtime relief workers and by a host of specialists who track groups with links to the U.S. intelligence apparatus. They view it as a classic example of how Bush’s “Thousand Points of Light,” like many of the right’s “answers” to grave social ills, is being used not so much to benefit the sick and needy, but the powerful few.

The most obvious of many things wrong with AmeriCares’s claim to offer “humanitarian” aid is the charity’s one-sided distribution of help-which hardly meets Geneva Convention standards. These require that aid be given impartially to all sides in a conflict and state that assistance to military forces cannot be considered “humanitarian.” (Stephen Johnson says he’s not sure the Geneva accords have any applicability in humanitarian-aid situations.) Certainly, some other aid organizations are guilty of bias-on the left as well as the right. But AmeriCares is way off the chart. In 1988, for example, it failed to provide assistance to Sandinista Nicaragua, which had just suffered a devastating hurricane. “Our information from the press was they did not want aid from the U.S.,” says Johnson. “We’re only going where we’re welcome.” But other American aid groups, including the Red Cross, did deliver substantial amounts of relief to Nicaragua. At the same time, AmeriCares shipped many millions worth of medicines and supplies to other Central American nations with more pliant governments.

And AmeriCares couldn’t get the planes in fast enough once U.S.-backed Violeta Barrios de Chamorro defeated the Sandinistas. On February 28, 1990, just three days after the election, the charity’s first flight brought in 23 tons of medical supplies. “From the people of the United States to the people of Nicaragua-with love,” each box read, sending the familiar message that seems to be the very essence of AmeriCares: doing what the U.S. says has its rewards.

“Why didn’t they give aid to Nicaragua before Chamorro took over?” asks Lonnie Turnipseed of the Church World Service and Witness, an arm of the National Council of Churches. “The people were suffering just as much.”

When AmeriCares decided Nicaragua had earned assistance, rightist Cardinal Miguel Obando y Bravo went to the airport to receive the first shipment, and the well-connected Knights of Malta distributed it. President Bush’s son Marvin was aboard the next AmeriCares flight, which arrived just days after Chamorro’s inauguration. He was met by a Knights of Malta ambassador by the name of Roberto Alejos Arzu, who, beyond his recent role as an avuncular dispenser of charity, has a long history of association with some of Central America’s most reactionary elements.

The Knights, AmeriCares’s “partner” throughout most of the world, has the unusual status of being a recognized sovereign state without territory, which means it enjoys full diplomatic rights in many countries and can speed items across borders via “diplomatic pouch,” bypassing customs inspectors. The 900-year-old organization, formally called the Sovereign Military Hospitaller Order of St. John, of Jerusalem, of Rhodes, and of Malta, is modeled after an order of soldier-monks who fought in the Crusades. With more than 10,000 members in 42 countries, the Knights is a powerful Vatican order with extensive and close links to intelligence organizations in the U.S. and Western Europe.

In 1986, AmeriCares’s worldwide collaboration with the Knights culminated in Robert Macauley’s becoming the first non-Catholic to receive the coveted Cross of the Commander of the Order of Malta. According to Thomas L. Sheer, the executive director of the American Association of the Sovereign Military Order of Malta, the award “was based on his participating in meritorious acts along the lines of what we do-help the sick and poor.” Ronald Reagan was also honored by the Knights, receiving, in 1988, their Grand Cross of Merit, Special Class, the highest decoration for a non-Knight. Reagan’s spokesperson said the Knights wished to honor Reagan for his “devotion to Christian principles, his defense of the rights of the unborn, and his commitment to the dignity of the individual, and the importance of family values.”

The American branch of the Knights, with 1700 Catholic members, is a group with strong ties to the intelligence and military communities and to conservative politics. Members have included former CIA directors William Casey and John McCone (who helped direct the 1973 military coup in Chile); former CIA chief of counterintelligence James Buckley; Alexander Haig; and former Nixon-Ford treasury secretary, financier, and key right-wing ideologue William Simon. Reagan’s ambassador to the Vatican, William Wilson, was himself a Knight. Another Knight, former U.S. senator Jeremiah Denton (Republican, Alabama), authored the bill that made it possible for air force jets to use their “surplus capacity” to move supplies for organizations like AmeriCares.

As might be expected, for AmeriCares ideology often seems to outweigh altruism. In Iran, where it sent aid after last year’s earthquake, the group was criticized for taunting the still-hostile Iranians with a risky, pro-U.S. message. “They draped the stuff with American flags,” says an official of another relief agency. “We didn’t think it was necessary to rub people’s noses in ideological stuff when we’re trying to help disaster victims.” In a not-very-subtle 1985 brochure describing the charity’s work in Afghanistan, AmeriCares brayed that it “is committed to assisting the people of Afghanistan in their resistance to the persistent and methodical efforts at genocide perpetrated on that country by the USSR.”

Although the U.S. public-and Congress-clearly wished to stay out of Afghanistan, AmeriCares began pumping millions of dollars in supplies into that country in August 1983. Much of the impetus came from AmeriCares’s honorary chairman, Zbigniew Brzezinski, who as Carter’s national security adviser had used his supervisory role over the CIA to support a covert network against the Soviets in Afghanistan.

In one bizarre 1984 episode, AmeriCares shed any vestige of neutrality, evacuating wounded mujahideen soldiers to Walter Reed Army Hospital in Washington, D.C. The group also revealed that it had been smuggling medicine and doctors into rebel-held areas of Afghanistan, servicing 57 clinics inside the country. AmeriCares’s conduit in Afghanistan was Ralph Magnus, who also served on the board of the Federation for American Afghan Action, a pro-intervention group, which discussed “sending planes into Afghanistan to land and deposit arms,” according to the publication Afghan Update. A former employee of the U.S. Information Service in Kabul, Magnus later taught in the national security affairs department of the Naval Postgraduate School in Pacific Grove, California.

AmeriCares’s mission statement is full of double entendres. It says the group aims to provide “an immediate and effective response to emergency medical needs, wherever and whenever intervention is deemed appropriate.” Often, Macauley’s interventions immediately follow those of his friend George Bush: AmeriCares was in Panama with medical supplies exactly one week after 24,000 American troops invaded. “Those supplies are badly needed here,” army captain William Beverley told the Stamford Advocate. The AmeriCares transport was coordinated with top U.S. officials, including General Colin Powell, chairman of the Joint Chiefs of Staff. Once again, the plane was met by local members of the Knights of Malta. Panama got no AmeriCares funds from January to June of 1989, but received $2.5 million in the next twelve months, beginning immediately after the American invasion.

(Deciding what’s “appropriate” in an imperious manner is an AmeriCares trademark. In a letter to this reporter, Macauley declined a request for an interview at any time and any place, citing a busy schedule. Macauley did say that he was willing to consider written questions, but only “if the questions are considered pertinent and the information is not confidential.” After repeated requests over many months the Voice was finally able to meet with AmeriCares president Stephen Johnson, who has been with the group since 1987.)

AmeriCares, which receives government money via the Agency for International Development (AID), does more than wave the flag-sometimes it helps Washington plant it on foreign soil. The incestuousness is sometimes truly remarkable, as in a joint government/AmeriCares effort to aid the Philippine army in 1986. As the Associated Press reported on September 19 of that year, “the Reagan administration and a private relief agency today gave Philippine President Corazon Aquino a $20 million sendoff from her four-day trip to Washington: a planeload of medical supplies for soldiers fighting communist guerrillas … [they were] purchased with a $10 million U.S. government grant and an equal sum from the relief group AmeriCares.”

Not everyone has been so lucky with Washington. “The Air Force certainly doesn’t donate planes to us,” says Louise Simone, president of the Armenian General Benevolent Union, which played a major role in Armenian quake assistance. “We’ve been told the Air Force can’t loan their planes to anybody.” In most cases, AmeriCares doesn’t get its planes directly from the government either. It most frequently charters them from Southern Air Transport, a company associated with the CIA as far back as 1970.

But the fact that AmeriCares is no Red Cross is best underscored by its leadership. In addition to honorary chairman Brzezinski, there is a seven-member advisory board that includes J. Peter Grace, chairman of W. R. Grace and Company and head of the American Association of the Sovereign Military Order of Malta; William Simon; Prescott Bush, the president’s brother; and retired general Richard Stilwell, Ronald Reagan’s Pentagon intelligence czar.

Stilwell’s interest in winning the hearts and minds of the masses dates back to the Vietnam war, when he was a key proponent of the Strategic Hamlet Program, in which millions of villagers were forced from their homes into camps where their contact with guerrillas could be limited (the plan was later applied in Guatemala).

In 1983, as deputy undersecretary of defense for policy, Stilwell was involved in the formation of a super-secret Army spy unit, the Intelligence Support Activity, which operated in El Salvador, Nicaragua, and parts of Africa before being disbanded. The unit existed without the knowledge of the CIA, the Pentagon’s own Defense Intelligence Agency, or Congress-although William Casey appears to have known about it.

About the same time, Stilwell was trying to expand the Defense Department’s involvement in humanitarian assistance. The idea was to improve the image of the U.S. and its armed forces, while giving military personnel an excuse to check out strategic locales. In 1984, a Pentagon panel recommended expanding such aid to Central America and Ethiopia; it also proposed distributing “surplus property” as disaster relief. The program was run by Stilwell’s special assistant. AID-which has its own image problems-was unhappy with the operation because it felt that all American relief would be tainted by association, and so the Pentagon decided Stilwell’s group would keep its distance from AID.

In 1987, Stilwell, out of government, paid a private visit to the Philippines sponsored, according to the Associated Press, by a “private health-relief organization.” While there, he criticized President Corazon Aquino’s weak efforts against communist rebels and met with members of the Philippine military. Shortly after he left, there was an abortive coup; Stilwell denied Philippine media reports charging him with involvement. By 1988, Stilwell had launched a group called the Gray Eagles, made up of former military people, to train friendly Third World armies. Thousands of ex-soldiers volunteered, and according to a Stilwell aide, numerous Latin American, African, and Far Eastern countries had expressed interest in learning U.S. techniques. “Everybody in the security assistance business thought it was a good idea,” Herbert Y. Chandler, a retired colonel and Stilwell’s right-hand man in the Gray Eagles, told The New York Times.

AmeriCares contributes to a broad problem with disaster relief.. Along with genuinely useful aid, much of what’s sent is either poorly labeled, improperly packaged, or doesn’t match local needs-a result of aid organizations’s elevation of media splash above relief quality. AmeriCares’s compulsion to be first on the scene-and thus earn publicity, which its workers, and Stephen Johnson, have nicknamed “baloney” -can conflict with its ability to meet real needs. Describing AmeriCares’s methods, a project coordinator once told a reporter, “We don’t hold a lot of meetings, write a lot of reports or send a lot of fact-finding missions. We just get the stuff out there.”

That’s not necessarily good. “What’s definitely wrong is this methodology of ‘being the first,’ ” says Dr. Claude De Ville, head of disaster relief for the Pan American Health Organization. “You need to be the best. Most of these people arriving first, they do so for reasons at home, not because they care.”

The tremendous quantities hastily shipped into disaster zones by relief organizations frequently tie up personnel and resources desperately needed for more useful work, and anger and frustrate local relief officials racing against the clock. In Armenia, where AmeriCares was both the first private relief agency in and one of the largest suppliers of drugs, the British medical journal the Lancet has been harshly critical of the overall relief efforts.

“Most drugs arrived in Armenia unaccompanied,” noted the Lancet. “Often, aircraft simply dropped the boxes on the airstrip and left.” The journal went on to note the sloppiness of the operation, saying that 80 per cent of the drugs arriving in the early days were “unsorted,” inconveniently packed, and “difficult to identify.” In the most heavily affected area, “pharmacists wasted about two-thirds of their time merely looking for and identifying useful drugs.” The quantity of drugs wildly exceeded needs. For example, although Armenia needed about 250,000 tablets of the antibiotic doxycycline (one of the drugs AmeriCares rushed in), 7 million tablets were received, 95 per cent of which expired before they could be used. The quantities dumped in Armenia were so ridiculously vast that in took 50 people six months merely to gain a clear picture of what was present.

Stephen Johnson defended AmeriCares’s record in Armenia. “We knew from experience what was most needed,” he said. Though he conceded AmeriCares sent drugs due to expire to Armenia, he said they were actually good beyond their off-shelf date, and that letters were sent along certifying them. Johnson also admitted all the medicines were labeled in English, but said that two pharmacists went along to identify them (altogether there were five warehouses full of supplies in Armenia, each the size of a football field). Among what AmeriCares shipped were so-called “charity boxes,” usually packages of unsorted mixed pharmaceuticals, which “do waste time in sorting” according to an official of another relief group. His organization refuses to ship charity boxes until they’ve been repackaged, something AmeriCares doesn’t have the time to do. (One supplier contends that it sent only sorted pharmaceuticals through AmeriCares.)

In 1984, 18 months after AmeriCares began flying relief missions, President Reagan gave the organization his Voluntary Action Award. That same year, in addition to its Afghan activities, AmeriCares shipped $14 million in aid to Central America. In Honduras it went to contra-controlled refugee camps; in Guatemala to military authorities who distributed it while involved in brutal counterinsurgency programs that have left tens of thousands dead or missing.

Throughout Central America, AmeriCares hands its shipments over to the local Knights of Malta for distribution, following a “partnership” the two groups announced in 1983. In El Salvador the effort has been coordinated by local head Knight Gerald Coughlan, a retired FBI agent and executive of International Harvester, which has donated its warehouses to store the supplies. The Knights’ Salvadoran cochair, Miguel Salaverria, a manager of a large coffee export firm, described the U.S. embassy as “very helpful” in arranging transport, and said that the Salvadoran armed forces has helped move AmeriCares medical supplies.

“I’m AmeriCares around here,” Roberto Alejos Arzu once told a reporter. Driving a van emblazoned with “Knights of Malta/AmeriCares” the group’s Central American coordinator “will go around to small towns and villages” says Stephen Johnson. But Alejos says he couldn’t possibly handle all the aid himself. Instead, he turns shipments over to other organizations, including the Reverend Pat Robertson’s 700 Club and, in the past, the youth charity Covenant House. Another aid conduit has been the Air Commandos, a group of retired American military pilots, who have close connections with counterinsurgency operations and with the Reagan-Bush effort to aid the contras (the group’s leader, retired general Harry Aderholt served under general John Singlaub in Indochina and is Soldier of Fortune’s unconventional warfare editor.) “There are many U.S. organizations that come around here,” Alejos told the Voice in a phone interview. “They come with recommendations from the States. We try to service them.”

Alejos typifies the 2.2 per cent of Guatemalans who, according to UNICEF own two-thirds of the arable land and live in opulence while 90 per cent of their country-people live in abject poverty, and three-quarters of all children under five are malnourished. Through the Knights, landed gentry like Alejos have an opportunity to give a little to the poor, without sacrificing their own wealth and power. But “charitable” is not the sort of word usually used to describe Roberto Alejos. “He’s a thug in a business suit,” says Jean-Marie Simon, author of Guatemala: Eternal Spring, Eternal Tyranny.

Time and again Alejos, a wealthy plantation owner, has been implicated in kidnappings, coups, and death squad actions. According to the North American Council on Latin America, “as with most of the Guatemalan elite, there is circumstantial evidence linking Alejos to La Mano Blanca,” one of the most virulent of the death squads, which specialized in the disappearance of political opponents, routine torture, and machine-gun executions. Victims included students, priests, labor leaders, journalists, teachers, peasant activists, and members and leaders of moderate opposition parties-all perceived to be “communists” because of their calls for social and economic reform. A number of workers on Alejos’s sugar plantations who had tried to strike or organize were killed, according to researcher Allan Nairn, formerly of the Council on Hemispheric Affairs. On several occasions, Alejos refused to pay his workers, saying he was out of money and unable to come up with their wages of 50 cents to $2 a day.

Alejos denies any association with La Mano Blanca. “That’s a lie,” he says. “I don’t get involved in that-I’m a practicing Catholic, I don’t go into anything violent.” As for the deaths of workers on his plantation, El Salto, Alejos says, “in the two cases where labor leaders of El Salto were assassinated, they were no longer workers at El Salto. I can’t tell you why they were assassinated.” He says he never told his workers that he was unable to pay them. But, he says, “there might have been delays in the transfers of funds.”

Alejos’s plantation served as a CIA training ground for the Bay of Pigs invasion (although the actual invasion was launched from Nicaragua with the help of his old friend, dictator Anastasio Somoza). In the ’60s, he was exiled by the Guatemalan regime, and tried several times to overthrow it. He was later arrested for planning the kidnapping of the cardinal of Guatemala, Mario Casariego, but was never charged. He vehemently denies being involved. “I was a very close friend of the cardinal,” says Alejos. “I proved 100 per cent I was never involved in anything.” Stephen Johnson says he sees nothing wrong with using Alejos as AmeriCares’s Central American coordinator.

Alejos’s links to the Reagan-Bush administrations go back to1979, when he hosted a delegation from the private military lobby, the American Security Council (ASC). The group, led by generals Singlaub (later of Iran-contra fame) and Daniel Graham, met with the president of Guatemala and took helicopter tours of rural counterinsurgency operations. Alejos later came to California and met with Reagan. “Mr. Reagan was in favor of human rights as much as we were,” Alejos said at the time. “I have personal respect and great admiration for Mr. Reagan. I think your country needs him.”

Using tactics developed in Vietnam-and promoted there by AmeriCares advisory board member general Stilwell-the Guatemalan army has pursued a brutal scorched-earth policy, bombing and forcing the abandonment of whole villages. In 1983, more than a quarter of the 4 million Indians living in the highlands were pushed from their land, according to the Guatemalan Council of Bishops. Many tens of thousands have died, and the number of orphans is estimated in the hundreds of thousands.

Although many nongovernmental aid groups operating in Guatemala have faced harassment, banishment, and even the deaths of members because of their perceived “leftist” slant, certain groups have been welcomed with open arms. Among them is AmeriCares, whose aid, as confirmed by Alejos, is distributed in the so-called “model villages” -camps to which peasants are forced by the army in order to cut their contact with guerrillas-including those surrounding the highland town of Nebaj. The town often takes on the look of an old spooks’s convention, as legions of far-right activists, Evangelicals, and American former military types troop in and out, administering “humanitarian aid.” Meanwhile, the residents need army permission to leave, and the men have a choice of forced conscription in the government’s civil patrols or homelessness.

Further south in Nicaragua, Sandinista officials have long accused AmeriCares of being a CIA front. Whether or not that’s true, it did attempt to fly a planeload of newsprint to the anti-Sandinista La Prensa, with then vice-president Bush’s office calling the Nicaraguan embassy to get approval for the AmeriCares plane to land. Bush’s people pointed out that the plane had pharmaceuticals on board as well, but the Sandinistas refused to assist “either Mr. Bush’s presidential aspirations or AmeriCares’ pro-contra activities.”

AmeriCares’s aid to Nicaraguans during the Sandinista era was strictly to contras. Shipments from the charity arrived at contra-controlled camps just inside Honduras, where refugees were subject to constant harassment and abuse by contra troops, and heavily pressured to join their ranks. In contrast other aid groups, such as the United Nations High Commissioner for Refugees, provided relief only to Nicaraguan refugee camps further in the Honduran interior and out of contra control.

AmeriCares’s aid to the contras included an Ollie North-controlled effort to supply them with medical supplies, thereby freeing them to spend their own money on arms. It was run through a front group called the Nicaraguan Freedom Fund (NFF), which was headed by AmeriCares’s William Simon. Simon, a key advocate of counterinsurgency in the Third World, put his theory into practice in Nicaragua. North and National Security adviser Robert MacFarlane got funding for the effort through the Reverend Sun Myung Moon’s Unification Church. The supplies purchased by NFF were then flown into Nicaragua on an AmeriCares plane. A May 21, 1985, memo to Oliver North about the Fund said that “Macauley” (he was so well-known to North that no first name was required) “has put a hold on it [the plane] and will turn it over to the Fund; he just awaits the word.” Simon was ready “to announce that the first plane load of medical supplies [is] on its way from Florida.”

Asked by The Washington Post where the $350,000 in supplies was going, Macauley replied, “My feeling is that none of the aid goes to the contra forces, but I couldn’t say that absolutely none of it does.” But contra spokesperson Bosco Matamoros told the Post the NFF’s contributions would free up funds that the group could use “for other supplies.” And Roberto Alejos confirmed that other AmeriCares shipments went to Miskito Indians, who had been linked to the rebels. Macauley’s vagueness about whether AmeriCares was aiding the contras is strangely out of synch with the image he likes to project. According to a magazine profile, “If he can’t personally confirm that the aid will reach the right people, then none will be sent.”

Robert Macauley’s “charity empire” began in Vietnam, when he helped U.S. GI John Wetterer expand a rescue mission for homeless children in Saigon into the Shoeshine Boys Foundation, which enabled orphans to make money cleaning GIs’ shoes. In 1975, according to a Reader’s Digest hagiography, Macauley used a check-kiting scheme to finance a $251,000 airlift of U.S.-associated orphans who’d been injured in the crash of an earlier evacuation flight. “Macauley didn’t have the money, but he knew a check needs three days to clear. If I move today, he thought, and get the kids safely into the United States, I can worry about finances next week…. Not surprisingly, the check bounced.”

Out of this Vietnam experience Macauley and his wife formed a charity called Friends of Children. Wetterer had since moved on to Guatemala, where he was running Mi Casa, a program for homeless youths. Friends of Children soon became one of his major funders. (In 1988 Wetterer was accused by 60 Minutes of molesting a number of boys, and Friends of Children withdrew its funding. Though Guatemalan officials cleared Wetterer, he was indicted for fraudulently soliciting money to support his sexual abuse of children by the U.S. Attorney’s office last September. Wetterer continues to deny the charges.)

AmeriCares, incorporated in 1979, was to remain little more than a personal philanthropy until 1981, when Macauley and his friend Father Bruce Ritter of Covenant House flew to Rome (sources believe it was in the plane of Knight Peter Grace, who regularly ferried the two around) for a private audience with the conservative Pope John Paul II.

Macauley has long had an interest in things Catholic. Though raised an Episcopalian like President Bush, “I’ve done everything but take sacraments,” he once said. Macauley is fond of recounting his Vatican meeting for friends. “The Pope’s a regular guy,” Macauley tells associates, drawing a picture of a cigar-smoking type who enjoys political discussions with other powerful men. The story of AmeriCares’s papal inspiration has become so enshrined in the charity’s mythology that it even appears in its brochures: John Paul II-the first non-Italian Pope since the 16th century and a Pole-urged Macauley to send medicine to Poland, where unrest was growing and martial law had just been imposed. “It was the Pope’s request,” one pamphlet says, “to which Macauley answered, ‘Certainly, Your Holiness,’ that started AmeriCares on the road to delivering millions of dollars in aid to the needy at home and all over the world.”

Macauley got into Poland by helping to underwrite the flights of established relief groups. In 1982, on behalf of one private aid organization, Macauley telephoned the Pope’s office, asking if the Holy Father could help expedite an airlift of medical supplies. In March the planes landed and, as promised, the church had smoothed the way. (Macauley continued to boost the noncommunist opposition in Poland. In 1988, while Solidarity was still officially an underground group, Lech Walesa’s son Slawak stayed with the Macauleys in New Canaan and then toured the country for 10 weeks courtesy of AmeriCares.)

Shortly after his Poland debut, Macauley expanded his operation. In June 1982, when Israel invaded Lebanon, he again funded another relief organization’s airlift, this time offering to cover the entire transport cost, generosity made possible because AID had agreed to reimburse him for the price of the plane from New York to Cyprus. Macauley’s airlift partner initially balked, pointing out that it didn’t take government money. (Neither do many other respected groups, because, “Once one takes government money, particularly AID money, it does color where you work,” says Oxfam America’s executive director, John Hammond.) But Macauley persuaded the group to go along, and then said AID wanted to send a Public Health Service staffer to speak at a press conference announcing the airlift. When airlift personnel, accompanied by a Los Angeles Times reporter, arrived at the airport, they found the cargo had been completely covered with U.S. government stickers declaring it “A Gift From the People of the United States and the United States Government.” Staffers tore off most of the stickers, which angered Macauley, who offered to pay for an AID staffer to fly to Cyprus with more labels.

According to an associate, Macauley soon tired of working with established aid groups, and was particularly upset by what he saw as their “leftist” bias. He said he intended to do the same thing they did, but bigger and better, and with different politics.

Most of what AmeriCares distributes are pharmaceuticals and medical supplies donated by more than 200 U.S. pharmaceutical companies. AmeriCares shipped $70 million worth of such supplies in fiscal 1990, according to its own figures. Macauley proclaims that he is aiming to ship a billion dollars worth by 1993.

As in all corporate charity, the donor companies look gracious indeed, but there is a big-buck payoff. AmeriCares’s operation earns America’s pharmaceutical companies lucrative tax write-offs, of up to two times cost, for donating unpopular or soon-to-expire drugs that they would otherwise have to destroy at considerable expense. It is a kind of alchemy written into the tax laws.

Macauley has said in interviews that after getting small donations from pharmacies in New Canaan he quickly realized there was a better way. He says he ordered the annual reports of the 50 largest U.S. pharmaceutical companies and called in his big guns. “I have these two great friends you might have heard of-Peter Grace and Bill Simon,” Macauley told a reporter in a 1987 interview. He says he got in touch with Grace and Simon and found that between the three of them they had contacts on the board of 47 of the 50 companies. They were on their way.

Within a short time, AmeriCares was calling itself “the humanitarian arm of corporate America.” It was blunt about its appeal to drug companies: “These pharmaceutical companies often have surpluses and they have to dispose of them in a way that they can’t be recovered,” AmeriCares executive vice-president Charles Chandler told a reporter in 1990. “They can’t dump it in a landfill, because someone can get at it. They would have to pay people to dispose of it. So we provide them with a good, useful way to get rid of anything they don’t use.”

According to AmeriCares, all 40 of the biggest pharmaceutical firms contribute. Many have more at stake than taxes; they maintain operations in the same Third World countries where AmeriCares is active in supplying counterinsurgency programs and share an ideological bond with the group. Some, including Richardson-Vicks, GD Searle & Co., Eli Lilly, Sterling Drug, and Merck & Co., have affiliated philanthropies that have made large donations to other right-wing foundations active in covert-type operations, including the contra supply effort. And some companies are particularly close to the White House: on leaving the CIA in 1977, George Bush spent a year on the Eli Lilly board.

Although Robert Macauley says his goal is to spread love throughout the world, the study of his Connecticut home is filled with books about war and military affairs, according to visitors. His study of power began in Fairfield County, where he and the young George Bush became friends and schoolmates, going from kindergarten to Phillips Andover and, eventually, to Yale. After graduation, Bob Macauley joined his father’s paper brokerage, where he was a salesman. And a good one. “He could charm the Virgin Mary out of her drawers,” says one of his former customers. Another ex-client describes Macauley as “smooth, a charmer … a bullshit artist.”

Macauley, according to those who know him well, has alternately charmed and exaggerated his way to the top. He wooed his clients at New York hot spots, where he told wild tales. “Everybody in the world he knew, or said he knew,” recalls one. “He couldn’t stop talking about the Kennedys-this one and that one.” Macauley told customers about meeting Pablo Picasso in postwar Paris. Picasso, he said, excused himself and went off to make love to some young women, then came back to continue their chat. According to one source, Macauley also claimed that he’d served in the OSS, the forerunner of the CIA, during the Second World War (a statement Macauley now denies making). In Paris, Macauley met Peter Grace when, according to Stephen Johnson, the mogul wandered into “either a cathouse or a saloon where Bob was playing the piano. They’re both cut from the same cloth. They’re both very aggressive, very bang-gang, do-it-now kind of guys.”

Macauley eventually launched his own paper mill, which today helps fund AmeriCares. When he formed the Virginia Fibre Corporation in 1973, Macauley put up just $1 million of the $50 million total. He has managed to retain 93 per cent of the capital stock. “I can do pretty much what I want,” he told Forbes in 1985. Virginia Fibre has made Macauley a wealthy man: annual sales are about $100 million, and net profits climbed rapidly from $3 million in 1986 to a formidable $20 million last year. Nine per cent of the company’s pretax profits go directly to AmeriCares, $1.835 million last year.

To ensure tight control of AmeriCares and Virginia Fibre, Macauley places his best players on both teams. The officers of the mill and charity are nearly identical, and Virginia Fibre executives frequently go on AmeriCares missions. President Charles Chandler is also an executive vice-president of AmeriCares; Virginia Fibre VP Clark Johnson is also a VP of the charity. AmeriCares board member Bert Schwarz is a Virginia Fibre board member, as was Father Bruce Ritter, who was also on the AmeriCares board until the Covenant House scandal forced him to resign (see “The Ritter Connection,”)

The charity is also funded by Macauley’s 17 per cent share of the voting stock in Greif Brothers Corp., a closely held Delaware, Ohio, packaging manufacturer. Greif, a considerably larger firm, has made heavy loans to Virginia Fibre, and owns convertible nonvoting stock in the company that gives it the right to take Virginia Fibre over. Both Macauley and Charles Chandler sit on Greif’s board. The company has sales exceeding $400 million and has 102 plants scattered throughout the U.S. and Canada. Macauley has told people his Greif stock is worth several hundred million. He is also a favorite of Greif chairman John Dempsey and is rumored to be in line to succeed him. According to one major shareholder, Greif corporate meetings are frequently dominated by Macauley, who spends most of his time talking about AmeriCares. (Macauley also put Father Ritter into Greif. The biggest portion of a secret Covenant House trust fund set up to benefit Ritter was, according to The New York Times, made up of Greif Brothers stock Ritter purchased in 1982 on Macauley’s advice. By 1990, it was valued at $627,000.)

Greif is distinguished in part by its meshing of religion with business. Every year the back cover of its annual report features a photo of a conference table with a portrait of Jesus centered above it. The caption: “Beneath this portrait and at this conference table for the past 42 years have been made the major decisions of the corporation.”

In addition to Greif, AmeriCares’s most devout supporters include the Reverend Pat Robertson, the fundamentalist former presidential candidate. Robertson’s Christian Broadcasting Network runs Operation Blessing, which distributes tens of millions each year to relief groups, including AmeriCares and the Knights of Malta. Robertson has sometimes been AmeriCares single largest contributor, especially during the years in backed the contras. (There’s another odd wrinkle to the tale: Robertson was also once employed by Peter Grace’s company in Latin America. Grace and Robertson later served together on various political committees, including the one that planned the April 15, 1985, Nicaragua Refugee Fund dinner at which President Reagan began a new campaign to restore official funding to the contras.)

Although AmeriCares is Robert Macauley, nobody better illustrates its ideology than advisory committee chairman Peter Grace, whose $7 billion-dollar conglomerate is involved in chemical production, cocoa processing, oil and gas exploration, and other businesses in 44 countries. He’s also the president of the Knights of Malta in the U.S.

Grace has packed his company’s board with people involved in various ways with rightist political activity. (At least eight Grace directors have been Knights of Malta.) In addition to Macauley, the Grace board is stocked with the likes of Roger Milliken, chairman of Milliken & Company and a large contributor to right-wing groups (including the John Birch Society and Western Goals, a private intelligence-gathering agency that kept data on U.S. activists and supplied it to police departments, which are barred from keeping such files; the group honored Salvadoran death squad leader Roberto D’Aubuisson at a 1984 dinner).

Grace has an unfortunate attraction for those with Nazi roots. In one case, in 1958, he petitioned the U.S. ambassador in Germany to allow the emigration of Dr. Otto Ambros, a brilliant scientist who’d worked during the war for I.G. Farben, the firm that developed the Zyklon-B gas used in the extermination camps. Ambros had been convicted by the Nuremberg Tribunal of mass murder and practicing slavery for his role in providing Farben with 200,000 laborers from Auschwitz. In his petition, Grace said that he admired Ambros “not only for his ability but-more important-for his character.” Grace hired him as a technical adviser for the company.

AmeriCares favorite region, Latin America, has been a Grace family playground since the mid-1800s. There, it has presided over a multibillion-dollar empire encompassing textiles, printing, shipping-materials production, and chemical manufacturing. Business and government have dovetailed nicely for Grace: highly placed members of the government-including the police-have worked for W. R. Grace.

Although a tireless anti-union crusader in his own U.S. plants, Grace trickily cofounded an organization dedicated to creating Latin American labor unions, albeit ones that would be subservient to U.S. companies. The American Institute for Free Labor Development (AIFLD), founded in 1961 and funded primarily by AID, called for “cooperation between labor and management and an end to class struggle.” The group took public pride in the role of its trainees in overthrowing reformist governments, including the Goulart administration in Brazil in 1964. A Senate Foreign Relations committee staff report once described AIFLD as having “the appearance of being little more than an instrument of the cold war.”

Grace embodied the corporate agenda of the right, and when Ronald Reagan took office, he immediately sought Grace’s guidance. Grace more or less appointed himself head of the President’s Private Sector Survey on Cost Controls. It was to recommend strategies for eliminating wasteful government spending. The panel ended up largely blaming the deficit on federal employees-rather than immense government subsidies of business, bailouts of failing corporations and banks, or the cleanup costs connected with corporate toxic and nuclear waste, some of which W. R. Grace is directly responsible for -and called for slashing the benefits and pensions of government workers. During this period, the “Latin Americanist” Grace was criticized for saying that Puerto Ricans “are all on welfare.”

As Grace was advancing the right-wing agenda at home, Robert Macauley was furthering administration interests overseas. As communist influence has waned around the world, AmeriCares has been there to welcome the dominoes into the American box, dispensing a sizeable dollop of Catholic orthodoxy in the process.

On January 7, 1990, a contingent of 25 AmeriCares workers and German and Hungarian Knights of Malta, arrived in Romania with 86,000 pounds of supplies, valued at $1.4 million-“the first privately organized, large-scale relief effort following the revolution,” according to AmeriCares. Accompanying them: White House physician Dr. Burton Lee III. Ironically, the group visited doctors at a hospital in Lipova, who told them that dictator Nicolae Ceausescu had been responsible for the deaths of many women because of his “virulent anti-abortion policy,” according to the Stamford Advocate. The paper, added, “Ceausescu’s policy for population growth called for prison terms for women who had abortions unless they had already borne five children.” (The Romanian doctors could not have known about the medal the Knights gave Reagan for his efforts to “protect the unborn” by making abortions more difficult to obtain.)

Asked once whether AmeriCares transports arms, Macauley answered that it did not. However, he hastened to add, he would do so at the request of the U.S. government. “As a citizen, it is incumbent on me to carry out the orders of the commander-in-chief.”

The White House has long had an interest in charity. Back in 1970, in a memo to Richard Nixon, aide Patrick Buchanan outlined ways to sidetrack “liberal” nonprofit group (see “Guess Who’s Not Coming to Dinner). Today, the right’s favorite humanitarian group dominates a growing share of pharmaceutical donations. One group recently received a letter from G. D. Searle & Co. saying that from now on only AmeriCares would get its donations. Said an official of the other charity, “This is not a commercial thing, there isn’t competition, there’s no reason for that.” He says a staffer at another firm, Johnson & Johnson, told him the White House had called there asking that the drug company give aid to victims of the Iranian earthquake only through AmeriCares. Johnson & Johnson spoke person Bob Andrews denies the company ever got such a call.

The humanitarian aid community is almost unanimously wary of AmeriCares, but officials of other nonprofit organizations are reluctant to speak publicly about Macauley, saying he can make life difficult for them. Those who will speak for the record are cautious. “[AmeriCares’s] approach is not the same as other groups’,” says Doug Siglin, public policy director of InterAction, a coalition of most private, nonprofit humanitarian organizations, which AmeriCares joined last year. Indeed, other relief groups complain AmeriCares refuses to coordinate with them to avoid duplication of efforts. And unlike CARE, the Church World Service, and other groups that lobby Congress through InterAction to make aid responsive more to human need than to military and political objectives, AmeriCares usually doesn’t get involved in urging a moral component to government relief.

Siglin says that in spite of its size, “I know virtually nothing about AmeriCares. Frankly, I don’t think anybody knows too much about their operations. Private operations are private.” There’s a certain irony to that, since the charity has done everything it can to keep its operations in the eye of the camera.

As an officially sanctioned Point of Light, AmeriCares typifies the glitzy self-serving response of the very establishment responsible for many of the problems that plague the Third World: debt, hunger, militarization, and dictatorships. Meanwhile, dozens of other aid groups work quietly to transform the lives of the world’s impoverished without making the nightly news. Groups like World Neighbors, Oxfam America, TechnoServe, and the American Friends Committee supply more than Band-Aid solutions to endemic problems. They teach basic skills, build infrastructure, and enable people to help themselves. That sure beats retired spooks making foreign policy while dumping surplus pharmaceuticals on the tarmac.

Picture 1: Would ‘Saint’ Bob Macauley ship arms? Yes, if the White House asked nicely. “As a citizen it is incumbent on me to carry out the orders of the commander-in-chief.”

Picture 2: Fathers know best? Pope John Paul II, Macauley, and Ritter met in 1981. Here they look at pictures of Ronald Reagan and Mother Teresa.

The Cast of Characters

Roberto Alejos Arzu: On the heels of an easy life on his plantations and a career full of paramilitary affiliations (troops trained for the Bay of Pigs invasion on his land), he became interested in helping the poor through Covenant House, AmeriCares, and the Knights of Malta.

George Bush (and family): His childhood chum Macauley is one of his brightest points of light, and George and the rest of the Bush clan back him to the hilt. The president’s children and even George’s personal physician, Burton J. Lee III, escort AmeriCares shipments into recipient countries. But AmeriCares is no kinder or gentler than might be expected from a charity founded by a close associate of an ex-CIA director.

Zbigniew Brzezinski: AmeriCares’s honorary chairman certainly knows his way around the world. As national security adviser to President Jimmy Carter, he oversaw an extensive covert operation against the Soviets in Afghanistan. In 1984, AmeriCares evacuated wounded mujahideen soldiers from Afghanistan and transported them for care to Walter Reed Army Hospital in Washington, D.C.

Jeremiah Denton: A Knight of Malta and former Republican senator from Alabama, Denton gave AmeriCares a boost when he sponsored a bill allowing the United States Air Force to use its “surplus capacity” to ship goods for groups like AmeriCares-although other charities say no such help is available to them.

“Amazing” J. Peter Grace: With a direct line to the Vatican and history of playing Latin America like a board game (he has been associated with CIA-assisted coups and is known for his desire to derail progressive labor movements around the world), Grace loved groups like Covenant House, the Knights of Malta, and AmeriCares.

The Knights of Langley: The Knights of Malta, which use AmeriCares to further their international goals, has more spooks than a Halloween party. Among them: former CIA deputy director James Jesus Angleton and former CIA directors John McCone and the late William Casey.

“Saint” Robert Macauley: He grew with George Bush, then met Peter Grace in a postwar Parisian saloon, but it was not until the early ’80s that he got his own piece of the power scene. He funded Mother Teresa’s efforts, then, through AmeriCares and with the help of the press became a “saint” himself.

Ollie North: It just wouldn’t be intrigue without the colonel, who through AmeriCares shipped $350,000 worth of medicine to the contras so the contras could better use their cash-on arms. A 1985 memo to North that mentions Macauley by last name suggests just how tight the connections were.

The Reverend Sun Myung Moon: At the request of North and AmeriCares’s William Simon, Moon paid for that contra shipment through the Nicaraguan Freedom Fund.

Ronald Reagan: In 1984, Reagan gave AmeriCares the presidential Voluntary Action Award; four years later, the Knights of Malta gave him its Grand Cross of Merit, Special Class-the highest honor the group gives a non-Knight. Reagan was awarded, in part, for his “devotion to Christian principles.”

Father Bruce Ritter: Letting Macauley into his humble charity may have been his first misstep. Then came Grace and Simon, expansion and fame, and finally, ignominy.

Pat Robertson: Out of law school, he worked for Peter Grace in Latin America. Then he found his calling and became the world’s number one fundamentalist television preacher. But religious differences didn’t stand in the way of alliances with Catholics with shared agendas-including Peter Grace and the Knights of Malta.

William Simon: A king of mergers and acquisitions, he collected corporations while building a comparable empire of private, political organizations dedicated to fostering the corporate political agenda. He advocated supporting “nonegalitarian” scholars; he loved the AmeriCares brand of charity.

Retired General Richard Stilwell: An architect of counterinsurgency tactics in the Philippines and Vietnam, he was delighted to see them further refined in Latin America. AmeriCares was one of the vehicles that has helped insure that old soldiers need not fade away.

Guess Who’s Not Coming to Dinner

A Blueprint for AmeriCares?

In spite of the direct participation of Bush family members in AmeriCares, the White House sometimes winkingly denies involvement. William Simon told the Washington Post he talked with then White House communications director Patrick J. Buchanan about NFF/AmeriCares 1985 shipments to the contras, and that Buchanan said “they appreciated our efforts and thought what we were doing was very constructive.” But according to Buchanan, his comment did not reflect official administration position on the Nicaraguan fund. “I haven’t talked to anybody about it,” he told the Post. “Bill Simon is an old friend, and I just picked up the phone to say congratulations.”

Buchanan had an early interest in right-wing “charities” like AmeriCares. Back in 1970, he authored the following lengthy memo at Richard Nixon’s request, laying out the notion of conservative “philanthropic” groups that might derail nonprofit groups perceived as “leftist”:

March 3, 1970

The President directed several of us to give thought to how to combat the institutionalized power of the left concentrated in the foundations that succor the Democratic Party.

Following are recommendations both of an offensive and defensive nature-the major one being the creation of a countervailing power outside the Federal government.

The President should direct an in-house group of people preferably outside the Administration to quietly undertake a study of the top 25 foundations in this country; to identify both their leadership and power structure; and to indicate which are friendly, which are potentially friendly; which can be co-opted to support projects the President supports …

Buchanan suggested the White House put together a group that “would be charged with reporting to the President specific options on how we could either influence, take over or create a major institution to accomplish Administration objectives.

“The Administration should begin … to initiate a policy of favoritism in all future Federal grants to those institutions friendly to us … and we should direct future funds away from the hostile foundations, like Brookings….”

Buchanan proposed several ways to fund the operation: “The money men who are behind the Administration could provide the seed money” to get it rolling. In addition, he suggested that it be “pointed out to all Big Contributors to other Institutions, and all the Big Contractors who get Federal money” and to “all the high rollers we know” that it was in their interest to support the new institute, “one of the President’s favorites.”

“The Big Supporters would find themselves on White House Guest Lists, while the friends of Brookings would stay in outer darkness,” he warned.

Buchanan realized that “some of the essential objectives of the Institute would have to be blurred, even buried, in all sorts of other activity” and that “we would have to have people there who knew what was up and agreed to it….” He went on to caution that “if we get the wrong people on the board, or the wrong individuals running it, we would be pouring money down a sewer….”

To run the new institute, the administration was looking for someone who “knew this business and its purposes intimately. Wrong fellow here, a softliner or a hustler, and forget the whole thing.” In the White House, he would have to work closely with “two individuals at the top level-who had the ear of the President at all times…”

Buchanan warned that if, at any time, the conservatives lost control of the White House, “the new incumbent would put a sword to this operation…. Those involved in the operation would have to carry heavy political insurance. At any time there might be a sudden distribution of assets to stockholders.”


The Ritter connection

Robert Macauley’s name is associated with AmeriCares, but he has a lengthy history with another powerful institution, Covenant House. Although Macauley rarely made it into news accounts during the turbulent winter and spring of discontent at Father Bruce Ritter’s youth shelter, he was the power behind the throne-the man who transformed it from a nearly bankrupt, obscure outfit into one of the largest, fastest-growing charities in America.

AmeriCares and Covenant were flip sides of the same coin: AmeriCares, the Reagan-Bush vision of private international charity; Covenant House, the domestic version.

In 1977, Macauley (who’d read about the fledgling charity in the Daily News) called Ritter to offer his help in expanding the operation. To associates, Ritter expressed doubts about Macauley, his grandiose promises, and intentions. But after badgering the dubious Ritter, Macauley eventually succeeded in becoming one of the priest’s closest allies and advisers.

Ritter, a frequent guest at Macauley’s Delray Beach, Florida, home, soon started loaning members of Covenant House’s volunteer Faith Community to Macauley. Twice a year Covenant volunteers ferried Macauley’s cars between his Connecticut and Florida house (after dropping Macauley at the airport, of course). Macauley, through a spokesperson, admitted using Covenant volunteers to drive his cars, but says they were reimbursed for any expenses and given plane tickets home.

Macauley, who was soon calling Ritter his “best friend,” brought Peter Grace and William Simon onto the Covenant board, of which he became chairman. It was these three wise men “who made Bruce go big time,” as a board member told the L.A. Times. In 1978, Grace, who helped Covenant House get its main Times Square area shelter, and Ritter went to Rome, where Ritter addressed an international meeting of the Knights of Malta. At the same time, progressive Pope John Paul I asked the order to return to its hospice roots. (In 1981, Ritter and Macauley met with his successor, the conservative John Paul II.)

According to a source, Macauley told people he was the one who persuaded a reluctant Ritter to raise money by writing monthly anecdotal letters about his “kids.” (Macauley denies any involvement with the letters.) The result: Covenant House received 95 per cent of its fast-growing budget from individual donations, most of them from direct mail. Letters hyped the plight of blond, blue-eyed runaways from Kansas who ended up selling their bodies on the mean streets of New York. However, the vast majority of Covenant’s clients were inner-city minority youth suffering from the loss of social services under Reagan.

Meanwhile, Ritter was being shown other ways to expand. In 1981, Ritter told staffers that the group would open in Phoenix, Arizona, thanks to banker Charles Keating-chief of the failed Lincoln Savings and now indicted for banking fraud-a devout Catholic who flew Mother Teresa around in his plane, as did Grace and Macauley. Keating later loaned Covenant House more than $40 million to finance its real estate acquisitions, which included the Times Square Hotel, a welfare hotel that became a moral hot potato and big money-loser for Ritter. Ritter became involved in Keating’s antipornography group, as well as the Meese Commission on porn, yet another of the White House gang’s favorite distractions from pressing social ills.

Covenant was a single-city operation until one winter day in the early ’80s, when the empire-builders struck. Grace flew Ritter and Macauley on his plane from Florida to Westchester, and Ritter returned to headquarters excited, telling staffers that Grace was ready to put big bucks into making Covenant House grow. “Peter Grace says we can be a $40 million charity one day,” he said. Pushed by Macauley, Grace, and Simon, Ritter was hell-bent on going global. In his office, maps with little flags showed current shelters and proposed new sites.

The first foreign expansion was to be into Latin America. Grace flew Ritter to Rio and other cities, to look for prospective Covenant House sites. In most places, they visited local members of Grace’s group, the Knights of Malta. They eventually settled on Guatemala. Father Jim Joyce, a Jesuit priest now at St. Peter’s Prep in Jersey City, New Jersey, who was a Covenant House child-care worker from 1978 to 1981, objected to the shelter’s expansion there, arguing that Covenant House was playing into the Guatemalan government’s efforts to harass the activist church and promote controllable charitable activities. His complaints were brushed aside by Ritter.

In Guatemala, one of the people instrumental in setting up and running the Covenant operation was Roberto Alejos. The Guatemala shelter, which opened in 1982, was run by a man named John Boyle until he was forced out; Boyle told associates it was because he’d alienated Alejos. To replace Boyle, headquarters sent down 22-year-old Pat Atkinson, a former child-care worker. Last year’s in-house investigation of Covenant House looked into Atkinson’s alleged sexual activities with boys under the shelter’s care. No findings have been made public; nor have charges been brought.

Macauley and William Simon were active in promoting Covenant House’s domestic expansion as well. When plans were announced in late 1988 to open a 100-bed shelter in Hollywood, it was Simon who made the announcement at a Los Angeles area Chamber of Commerce luncheon. However, officials of private L.A. social service agencies had urged Ritter not to open there, saying there were already enough beds in the area, that the shelter was too large, and that it would draw children into the seamy area. Although he had solicited their advice, Ritter now ignored it. The boys were going Hollywood.

Following allegations that Ritter had slept with young male Covenant House residents, it was revealed that he had secreted some of the young men in question at “safe houses,” saying they were on the run from organized crime. According to a source, Macauley’s upstate New York farm was one of the safe houses. Macauley says only that many people from Covenant House were guests at the farm.

Through all of their friendship, and in spite of Macauley’s considerable charm, Ritter felt there was something a bit scary about the AmeriCares founder. “I wouldn’t want to be on Bob Macauley’s wrong side,” Ritter once told a staffer. “The people he knows…”


1 Comment

  • By Sterling Seagrave, October 29, 2011 @ 11:01 am

    Really terrific piece, Russ. I’ll need some time to absorb it all. Just one note is that Southern Air Transport goes back much earlier than 1970, was set up by the same guys who set up Air America from CAT. And I think Aderholt’s name is “Heinie” (to those who like him, which I do, not Harry). More later. Sterling

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