WALLACE G HOUSE ALSO MEMO OF CONVERSATION DEALING WITH CARIBBEAN POLITICAL TENSIONS,INCLUDING COMMUNIST ACTIVITY IN LATIN AMERICA: AND ALLEGED U.S. INTEL. DEFICIENCIES.

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06988540
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 5
• Document Creation Date: October 23, 2023
• Document Release Date: September 26, 2023
• Case Number: F-2023-00518
• Publication Date: May 24, 1960

Approved for Release: 2023/08/29 C06988540
ALL FBI INFORMATION
CONTAINED (b)(6)
��
� ����
�
�
BEREIN IS UNCLASSIFIED
,...(b)(7)(c)
7
DATE (37-26-2o17BY
inheriting case -
1...S.".�1
(b)(3)
TO:
CENTRAL INTELLIGENCE AGENCY
WASHINGTON 25, D. C.
s here. CIA document, so classification is on their end
Director
Federal Bureau of Investigation
Attention: I4 J. Papich
4Cfl
FROM: Deputy Dirt 6?
SUBJECT:. Wallace G. ROUSE
14 MAY 1980
b6
b7C per FBI
1. The attached copy of a Department of State memorandum is
forwarded to you through this channel at the suggestion of that
Department.. It is noted that your Bureau has interviewed Mr. ROUSE r
on several occasions in the past, and it is believed you may wish
to debrief hin further on his statements regarding Gramminist financing
of construction prodects in Latin America.�
csox.3/759, 658
Attachment: One, as above,, in duplicate
act Department of State
(b)(3)
(b)(7)(e)
REC-
MGT -12
(b)(3)
(b)(7)(e)
b3
b7E Per FBI
18
b3
b7E Per FBI
V.
CIA 105-HQ-88429, Section 01, Serial 1, FDPS Pages 1-5(5 pages)
Approved for Release: 2023/08/29 C06988540
Approved for Release: 2023/08/29 C06988540
1
To: The Ambassador
��
---SEGRET-7
(b)(6)
ALL FBI INFORMATION CONTAINED(b)(7)(C)
HEREIN IS UNCLASSIFIED
nATx 07-26-2017 BY
Attachment to CSOL�3/759,658 b6
b7C per FBI
February 214 1960
From: The Counselor of Embassy for Economic Affairs
Subject: Memo of Conversation Dealing with Caribbean
Political Tensions, Including Cormuunist
Aktivities in Latin America; and Alleged
U.S. Intelligence Deficiencies.
While taking the diplomatic pouch from Ciudad illo 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 Cape:art% "unofficial"
party visiting Gindad 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 wi,t1; Generalissimo Trujillo during which Trujillo had called him and
jno. J.agps of Lehman Bros. "thieves", and after telling me with considerable
janger, at the Gonerelissimo 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:
1. He was quite close to Artuzeesppillpt, along with other "unsavory
and rotten" charadters in every -66iiiitiy�iii7ritin America, not because he liked
or trusted them, but because in his business, e had to have every type of
informant, and especially informants with Ii4uence. He said Espaillat had
admitted personplly to him that he had been 4ire0t2,.y responsible for the
Galindez kidnapping. Espall 1 Pt was one of 'illots key men in his current
as well as past plotting to eliminate oJhrough aiding Cuban
dissidents, and if this did not work, by assassination. Co 1,2i
2. He, Rouse, had been contacted by a "big bulls in Washington, D. C.,
who had played golf with the President and "is too powerful to make angry",
to furnish him the names of one or two tough men in Rouses 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 "big bull" and. this time he sent
a man (not named) to hit who was given a gun and money and told there would
be more when he shot Castro. This men made the mistake of going to Mexico
first where he was known to the police and jailed.
(b)(3)
(b)(7)(e)
)3
)7E Per FBI
ENCLOSURE
Approved for Release: 2023/08/29 C06988540
 Approved for Release: 2023/08/29 C06988540
01*
--SECRET-
�
Attachment to CSCL.3/759,658
P.
3. After the above failure, one Peter or PedrOmreles; ICS-resumably an
American citizen) was recently given $5,000 "earnest money" in 1.11c11111. as a down-
payment to blimp Castro off. Rouse implied this was arranged by Espaillat
ting rot Trujillo,. and also implied that former U.S. Ambassador 111 'Timm
awley was implicated. Rouse said that Monies would fly to Ciudad TrujITIo
ami for a few days, and if "the U.S. Embaesy were wise, it would bundle
him 'back on the next plane for the U.S." He hinted that the,GODR would smuggle
Morales into Cuba, though be did not indicate how. .
4. He said that WiiJi.m Pawley bad asked him wiay he, Rouse, had not sent
gunmen to kill Castro; that Pawley knew of the former attempt (item 2) and of
the Illoreles deal; and that Paley had. told him' mpif that didnit work 'she would
send his own gunmen" to do the job.. (On arriirel in Port-au-Prince the Embassy
Administrative Officer by sheer coincidence, since he was not told anything
about the conversation with Rouse, said he had been Seated next to William
Fawley 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 Gristi." He said that there were 8 B.,26 planes .
stationed there and implied' some ltheal7 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-264 all cane from the
U.S. and were secured at a very FR11R11 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 Generalisirao would turn to get
money for the Nisao dam project (which was the starting point of the converda-
tiot.) if the deal with Rena really fell through, 'Rouse said there was a great
deal Of Communist financing of projects (and bribes) going on in Latin America
that our Embeesies (and presumably Washington) did not know about. HO gave
four examples. One is inland in Venezuela between Maracaibo and Caracas and
ie strategically near the oil pipe lines. No one can get into this area.
After hearing about it from one of his infonnante he rented a 'melt 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 "Marks", 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
,SEGRET'
Approved for Release: 2023/08/29 C06988540
Approved for Release: 2023/08/29 C06988540
�
- 3 -
�
Attachment to CS01.3/759,658
Caribbean coast.i 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 stop 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 bribex7, he said that in
his business (which usually included large amounts of both) he had to know
what kind a 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 2i-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. headquarter, where the stop
boss') who had somehow gotten wind of it, blew his stack but quieted down when
Rouse 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 45
minute conversation were:
Homer
1. He, Rouse, claims influential politicalj.es in'Washington, B. .G ti
in addition to the "big btil.10 and Benet� also claims
highly important banking and other working contacts In the States.
2. He said Senator Capehart during his last visit to Ciudad Trujillo
had warned hin that his business deal with Trujillo might fall
through because of a change in Trujillo fa 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
businees, he had never found it so difficult to business in
many countries of the area as now. He didn't feel the present
Approved for Release: 2023/08/29 C06988540
Approved for Release: 2023/08/29 C06988540
.11^
otk,
-SECRET--
Attachment to CSCI-3/759,658
-
tegimes were much cleaner, though in some cases, it was political]
more risky for the top people to get directly involved in payoffs.
The principal new factor, he pelt, 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.
b. He seemed convinced that nothing would effectively stop Trujillo in
his plottings to dest.tOy Castro. Obliquely in this connection he
referred to Senator Sinatheral visit and again mentioned Senator
Capehart's "disillusionment with Trujillo."
5, In addition to Espailut as one of TrujilloIs foremost aides in the
Castro feud, and ' suppr ssinjg democracy in the Dominican Republics,
he named Manuel oylons6as "the leading and worst who is up.
to his neac in of it..." He also referred to " de Moyals crowd",,
and by inference, since he had just mentioned some of de Moya's "shady
business als,/imp � d that this inclpded such yell known associates
4Marc mess Dr �ester, -Alvare Sanchez* nilla, Jesus Maria.
oncoso, and Jor driguer.�
M. Rouse said that as an engineer he had a theory about the mysterious
submarine (s) in the Golfo 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 impl,y that his
intelligence sources (including Commies or those in touch with Commies) were
responsible for this conviction on his part, or not.
SECRET
Approved for Release: 2023/08/29 C06988540