WALLACE G. ROUSE

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005660960
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 5
• Document Creation Date: June 24, 2015
• Document Release Date: July 5, 2011
• Case Number: F-2011-01218
• Publication Date: May 24, 1960

TO. Director
Federal. Bureau of Investigation
Attention: Mr. A. J. Papich
ALL FBI INFORMATION CONTAINED
HEREIN IS UNCLASSIFIED
DATE 02-07-2011 BY 60324UCBAN/SB/CM4T
(b)(3)
4 f4IAY 1960
1.. The attached copy of a Department of State memorandum is
forwarded to- you through this channel at the suggestion of that
Department.
Attachment: One, as above? in duplicate
cc:: Department of State
&9gryq-s.
14
tC,Cn olwl WASHINGTON 25, D. C.
: \`JJJ J (b)(1)
APPROVED FOR RELEASE[]
DATE: 27-Jun-2011
 ALL FBI INFORMATION CONTAINED,
HEREIN IS UNCLASSIFIED
DATE 02-07-2011 BY 60324UCBALJ/SB/CMIJ
s
Qrnncz
OLUIIG I
From: The Counselor of Embassy for Economic Affairs
Political Tensions, Including Communist
Activities in Latin America; and Alleged
U.S. Intelligence Deficiencies.
While taking the diplomatic pouch from Ciudad ~jillo to Port-au-Prince
by air on the morning of February 23,,Mr. Wallace B Rouse, whom I had met and
talked with before when he was a member of Senator Cap ar s )unofficial"
party visiting Ciudad Trujillo in November, 1959, asked me to sit with him.
He was greatly upset by the apparent last minute failure of a large business
deal wit1~. Generalissimo Trujillo, during which Trujillo had called him and
n o w ~' Jno. JRens of Lehman Bros. '!thieves)., and after telling me with considerable
ianger, at the Generalissimo and his top cohorts about the whole deal, he
criticized the quality of U.S. intelligence and attempted to demonstrate his
thesis 'by giving me the following information, all or most of which he seemed
to think our Embassies and Ciudad Trujillo and other posts were unaware of.
yy~~' tpd /-,pc, _
1. He was quite close to ArtuelEsaillat along with other )unsavory
and xotteuiV characters in every country . a'tin America, not because he liked
or trusted them, but because in his business, he had to have every type of
informant, and especially informants with inf uence. He said Espaillat'had
admitted personally to him that he had been 4' ectly responsible for the
Galindez kidnapping. Espaillat was one of 'illots key men in his current
as well as past plotting to eliminate Fide ast through aiding Cuban
dissidents, and if this did not work, by assassination. CU b a
2. He, Rouse, had been contacted by a Obig bull'J in Washington, D. C.,
who had played golf with the President and JJis too powerful to make angry),
to furnish him the names of one or two tough men in Rouse% outfit who either
were or could pass as Cubans and were good gunmen. Rouse said he did nothing
for a week when he got another call from the J'big bull') and this time he sent
a man (not named) to him who was given a gun and money and told there would
be more when he shot Castro. This man made the mistake of going to Mexico
first where he was known to the police and jailed.
VrAmm
-70 EMI
ENCLOSURE 16-y-- 88429 ""(
 0
3. After the above failure, one Peter or Ped ~elesrele _:( resumab]y an
American citizen) was recently given $5,000 "earnest money" in Miami as a down-
payment to bump Castro off. Rouse implied this was arranged'by Espaillat
+~w- ----- ad .~..~~.V ,. WALL dLpv JJI&iJi J.vu Ntlav ivilucl U fl JUILUQU J OUVS I.iLLSC.UL
~ ~ awley was implicated. Rouse said that Morales would fly to Ciudad Truj- o
rom anti for a few days, and if "the U.S. Embassy were wise, it would bundle
him back on the next plane for the U.S." He hinted that the.GODR would smuggle
Moreles into Cuba, though be did not indicate how.. " .
4. He said that William Pawley had asked him why he, Rouse, had not sent
gunmen to kill Castro; that Pawley knew of the former attempt (item 2) and of
the Moreles deal; and that Pawley had told him-if that didntt work he would
send his own gunmen" to do the job.. (On arrival in Port-au-Prince the .P]nbassy
Administrative Officer by sheer coincidence, since he was not told anything
about the conversation with Rouse, said he had been seated next to William
Pawley on a flight from New York to Port-au-Prince during which Pawley had
made the identical remark to him.)
5. When asked if he knew what the $50 million in "extraordinary defense
expenditures" announced in 1959 by the GODR were spent on, Rouse temporized.
He mentioned the French tanks, Nato rifles, etc. When reminded this fell far
short of $50 million he asked if -I had tried to get into a certain area on the
north coast "around Monte Cristi." He said that there were 8 B-26 planes
stationed there and implied some "'heavy construction" (airfield, storage and
staging depot, warehouses and barracks, etc?) had been done there;. and that it
was possible for any outsider to enter the area. The B-26's all came from the
U.S. and were secured at a very small cost (he thought as low as $20,000 per
plane), but they had all needed to be repaired at very much greater cost.
6, When asked if he had any idea where the Generalisimo would turn to get
money for the Nisao dam project (which was the starting point of the conversa-
tion) if the deal with Rens really fell through,'"Rouse said there was a great
deal of Communist financing of projects (and bribes) going on in Latin America
that our Embassies (and presumably Washington) did not know about. He gave
four examples. One is inland in Venezuela between Maracaibo and Caracas 'and
is, strategically near the oil pipe lilies. No one can get into this area.
After hearing about it from one of his informants he rented a light plane and
tried to fly over it but was turned back by military aircraft. He then tried
to get into it first from Caracas and then from Maracaibo by car and was both
times turned back by the military. (He had first learned of this area from an
old and always reliable "island man" who had spent 38 years in the Caribbean
area. He referred to him as 'Mark" or 1Harka", if I recall correctly). A
second area was in Cuba near the Caribbean coast, somewhat south by west of
Camaguey; a third was an island in the Jardines de la Reina group off the
 Caribbean coast. The fourth was in Guatemala, and at a place he did not
identify, except to assert the U.S. knew nothing about it, and that it involved
the direct connivance of the Government of Guatemala.
7. Still on the subject of deficient U.S. intelligence, and defense
against Commie penetration, he said there was a "top secret island) in the
Bahamas which was a most important part of the U.S. long range missiles project -
where missiles launched on the west coast of the U.S. were zeroed in. He
watched the operation unmolested from a rowboat, He then went to the Crown
Land Office in Nassau and asked to buy 25,000 acres of land on this island.
There was no difficulty. He paid the required deposit and was told the papers
would be made out and given him when he paid the balance. He claims the papers
were made out at which point he said he was no longer interested and forfeited
his deposit. The island in question, according to Rouse, is Mayaguana.
8. Reverting to Commie political penetration of Latin America through
financing military and economic projects and plain bribery, he said that in
his business (which usually included large amounts of both) he had to know
what kind of competition he was up against. Through some of his contacts he
had gotten in touch with Commie agents who agreed to finance a large construction
project at a nominal 2:.1/2% rate of interest, which when carefully analyzed was
actually still only a shade higher than 3-1/2?.. A contract was drawn up, at
which point he was ordered to report to his U.S. headquarters, where the "top
boss) who had somehow gotten wind of it, blew his stack but quieted down when
House explained he had no intention of using Commie funds, but felt he had to
make an acid test of whether they were really available in large amounts and
at much better than U.S. terms. He again emphasized that the amount of Commie
financing for all purposes in Latin America was almost unbelievable. Chief
centers for negotiation and payment were Guatemala City, Geneva, Paris, Berlin
(he did not specify West or East) and Tangiers.
9. Other points of interest made by Rouse during a rather disjointed 145
minute conversation were:
/foN4er
1. He, Rouse, claims influential political r' in'Washington, D. 0. f)
in addition to the "big bull" and Senato apehart He also claims
highly important banking and other working contacts in the States.
2. Be said Senator Capehart during his last visit to Ciudad Trujillo
had warned him that his business deal with Trujillo might fall
through because of a change in Trujillo's attitude; and that
Capehart told him that he personally had become "disillusioned".
3. He stated flatly and with emphasis that after nearly 30 years of
experience in all of Latin America in the heavy construction
business, he had never found it so difficult to"do business in
many countries of the area as now. He didn't feel the present
(FDPS pg 5) Qronr^
 0
regimes were much cleaner, though in some cases, it was politically
more risky for the top people to get directly involved in payoffs.
The principal new factor, he felt, was political pressure against
American business (most of it Commie inspired) and the "serious; and
widespread undercover competition" being offered on an increasing
scale by Commie financing which was usually disguised as being:
European or other presumably "non-Communist" sources. It was
becoming more difficult for U.S. companies to match bona-fide non-
American competition, and even harder where the Commies were providing
the competition, either directly or indirectly.. The political tensions;
in the area helped make it easier for the Commies to make economic
as well as political penetration,
!j. He seemed convinced that nothing would effectively stop Trujillo, in
his plottings to destroy Castro. Obliquely in this connection he
referred to Senator Sinathers?'-visit and again mentioned Senator
Capehart's "disillusionment with Trujillo."
5? In addition to Espaillat as one of Trujillots foremost aides in the
Castro feud,. and . super ssingg democracy in the Dominican Republic?
he named Manuel Mo % onsd`as "the leading and worst who is up:
D K to his neck' of it?" He also referred to " de Moya's crowd's,
and by inference,. since he had just mentioned some of de Moya's "shady
business alsy imp d that this included such yell known associates
,..
-- -
S
10. Rouse said that as an engineer he had a theory about the mysterious
submarine (s) in the Goifo Nuevo. Sonar had picked up an. old sunken German sub
that still. had enough water tight compartments left to be almost but not quite
bouyant. Argentine Navy depth charges had not hit it, but had exploded on or
near the bottom close enough to dislodge it from the sand or muck and force it
upwards, after which it would again sink. He said that regardless of whether
or not this is the right explanation,. he is convinced there was no Commie sub
involved in the incident. It was not clear whether he meant to imply that his
intelligence sources (including Commies or those in touch with Commies) were
responsible for this conviction on his part, or not.
44K-