The Deep State and the Bias of Official History - WhoWhatWhy

The Deep State and the Bias of Official History

Reading Time: 7 minutes

1How do Wall Street, oil companies and the shadow government agencies like the CIA and NSA really shape the global political order?

That’s the question author Peter Dale Scott examines in his forthcoming book “The American Deep State: Wall Street, Big Oil and the Attack on U.S. Democracy,” due out on Nov. 12. Scott, a professor emeritus of English at Berkeley and former Canadian diplomat, is considered the father of “deep politics”—the study of hidden permanent institutions and interests whose influence on the political realm transcends the elected.

In the “American Deep State,” Scott takes a compelling look at the facts lurking behind the official histories of events to uncover the real dynamics in play. In this exclusive excerpt—the first of several we will feature on WhoWhatWhy—he looks at the revolving door between Wall Street and the CIA, and what that demonstrates about where power truly resides. 


In the last decade it has become more and more obvious that we have in America today what the journalists have called… America’s “deep state.” (1)

This expansion of a two-level or dual state has been paralleled by two other dualities: the increasing resolution of American society into two classes—the “one percent” and the “ninety-nine percent”—and the bifurcation of the U.S. economy into two aspects: the domestic, still subject to some governmental regulation and taxation, and the international, relatively free from governmental controls. (2)

All three developments have affected and intensified each other—particularly since the Reagan Revolution of 1980, which saw American inequality of wealth cease to diminish and begin to increase. (3) Thus for example Wall Street—the incarnation of the “one percent”— played a significant role in creating the CIA after World War II, and three decades later the CIA and big oil played a significant role in realigning American politics for the Reagan Revolution.

There is an ambiguous symbiosis between two aspects of the American deep state:

  1. 1. The Beltway agencies of the shadow government, like the CIA and NSA, which have been instituted by the public state and now overshadow it, and
  2. 2.  The much older power of Wall Street, referring to the powerful banks and law firms located there.

Top-level Treasury officials, CIA officers, and Wall Street bankers and lawyers think much alike because of the “revolving door” by which they pass easily from private to public service and back.

But a much larger role for the private sector has come with the increased outsourcing of the government’s intelligence budget. Tim Shorrock revealed in 2007 that “about 70 percent of the estimated $60 billion the government spends every year on . . . intelligence” is now outsourced to private intelligence contractors like Booz, Allen & Hamilton (now Booz Allen Hamilton) and SAIC (Science Applications International Corporation). (4)

The Overworld

I shall argue that in the 1950s, Wall Street was a dominating complex. It included not just banks and law firms but also the oil majors whose cartel arrangements were successfully defended against the U.S. government by the Wall Street law firm Sullivan and Cromwell, home to the Dulles brothers. This larger complex is what I mean by the Wall Street overworld.

There seems to be little difference in Allen Dulles’s influence whether he was a Wall Street lawyer or a CIA director. Although he did not formally join the CIA until November 1950, he was in Berlin before the start of the 1948 Berlin Blockade, “supervising the unleashing of anti-Soviet propaganda across Europe.” (5) In the early summer of 1948, he set up the American Committee for a United Europe (ACUE), in support of what became, by the early 1950s, “the largest CIA operation in Western Europe.” (6)

The CIA never abandoned its dependency on funds from outside its official budget to conduct its clandestine operations. In Southeast Asia in particular, its proprietary firm Sea Supply Inc. supplied an infrastructure for a drug traffic supporting a CIA-led paramilitary force, PARU. [Two CIA proprietaries, Sea Supply Inc. and Civil Air Transport (CAT) Inc. (later Air America), initially supplied the KMT 93rd Division in Burma that organized opium mule trains down to Thailand, where opium sales were still legal.

Later, when the USG officially distanced itself from the KMT drug army, the CIA organized an offensive and defensive paramilitary unit, PARU, inside the Thai Border Police (BPP). Like the BPP, PARU financed itself by seizing KMT opium and turning it in to the Thai Government, receiving a bounty payment of 12.5 percent of the retail value.] (7)


The CIA appears also to have acted in coordination with slush funds from various U.S. government contracts, ranging from the Howard Hughes organization to the foreign arms sales of U.S. defense corporations like Lockheed and Northrop. (8)

The international lawyers of Wall Street did not hide from each other their shared belief that they understood better than Washington the requirements for running the world.

This mentality exhibited itself in 1952, when Truman’s Justice Department sought to break up the cartel agreements whereby Standard Oil of New Jersey (now Exxon) and four other oil majors controlled global oil distribution. (The other four were Standard Oil Company of New York or Socony [later Mobil], Standard Oil of California [now Chevron], Gulf Oil, and Texaco. Together with Royal Dutch Shell and Anglo-Iranian, they comprised the so-called “Seven Sisters” of the cartel.)

Faced with a government order to hand over relevant documents, Exxon’s lawyer Arthur Dean at Sullivan and Cromwell, where Foster Dulles was senior partner, refused: “If it were not for the question of national security, we would be perfectly willing to face either a criminal or a civil suit. But this is the kind of information the Kremlin would love to get its hands on.” (9)

Overthrowing Iran

At this time the oil cartel was working closely with the British Anglo-Iranian Oil Company (AIOC, later BP) to prevent AIOC’s nationalization by Iran’s Premier Mossadeq [or Mosaddeq], by instituting, in May 1951, a successful boycott of Iranian oil exports. “In May 1951 the AIOC secured the backing of the other oil majors, who had every interest in discouraging nationalisation. . . . None of the large companies would touch Iranian oil; despite one or two picturesque episodes, the boycott held.” (10)

Mohammad Mossadeq

Mohammad Mossadeq

But Truman declined, despite a direct personal appeal from Churchill, to have the CIA participate in efforts to overthrow Mossadeq, and instead dispatched Averell Harriman to Tehran in a failed effort to negotiate a peaceful resolution of Mossadeq’s differences with London. (11)

All this changed with the election of Eisenhower in November 1952 (with considerable support from the oil industry), followed by the appointment of the Dulles brothers to be Secretary of State and head of CIA.

In November 1952 CIA officials began planning to involve the CIA in the efforts of MI6 and the oil companies in Iran (12)—although its notorious Operation TP/AJAX to overthrow Mossadeq was not finally approved by Eisenhower until July 22, 1953. (13)

Dr. Mossadeq entering court for his trial.

Dr. Mossadeq entering court for his trial.

Nearly all recent accounts of Mossadeq’s overthrow treat it as a covert intelligence operation, with the oil cartel (when mentioned at all) playing a subservient role. However the chronology, and above all the belated approval from Eisenhower, suggest that it was CIA that came belatedly in 1953 to assist an earlier oil cartel operation, rather than vice versa.

In terms of the deep state, in 1951 the oil cartel or deep state initiated a process that the American public state only authorized two years later. Yet the inevitable bias in academic or archival historiography, working only with those primary sources that are publicly available, is to think of the Mossadeq tragedy as simply a “CIA coup.”


 1.          Mike Lofgren, “A Shadow Government Controls America,” Reader Supported News, February 22, 2014, -a-shadow-government-controls.

2.           To take a single telling example, six of Sam Walton’s heirs are now reportedly wealthier than the bottom 30 percent of Americans, or 94.5 million people (Tim Worstall, “Six Waltons Have More Wealth Than the Bottom 30% of Americans,” Forbes, December 14, 2011, -waltons-have-more-wealth-than-the-bottom-30-of-americans/).

3.           See Kevin Phillips, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath (New York:     HarperCollins, 1991).

4.           Tim Shorrock, Spies for Hire: The Secret World of Intelligence Outsourcing (New York: Simon & Schuster, 2008), 6.

5.           Gordon Thomas, Secret Wars: One Hundred Years of British Intelligence Inside MI5 and MI6 (New York: Thomas Dunne Books/ St. Martin’s Press, 2009), 98.

6.           Richard Aldrich, The Hidden Hand: Britain, America, and Cold War Secret Intelligence (Woodstock, NY: Overlook Press, 2001), 343. Dulles also chaired the executive committee of the companion National Committee for a Free Europe (behind the Iron Curtain), whose legal affairs were handled by Sullivan and Cromwell (Wilson D. Miscamble, George F. Kennan and the Making of American Foreign Policy, 1947–1950 [Princeton, NJ: Princeton University Press, 1992], 204).

7.             Scott, American War Machine, 65–67, 87–96.

8.             Norman Mailer, “A Harlot High and Low: Reconnoitering Through the Secret Government,” New York, August 16, 1976 (Hughes); Michael Schaller, Altered States: The United States and Japan Since the Occupation (New York: Oxford University Press, 1997), 294 (Lockheed).

9.             Ovid Demaris, Dirty Business: The Corporate-Political Money-Power Game (New York: Avon, 1974), 213–14.

10.           J. P. D. Dunbabin, International Relations Since 1945: A History in Two Volumes, 
vol. 2, (London: Longman, 1994), 344. The boycott is denied without argumentation in Exxon’s corporate history (Bennett H. Wall et al., Growth in a Changing Environment: A History of Standard Oil Company (New Jersey), Exxon Corporation, 1950–1975, vol. 4 (New York: McGraw-Hill, 1988), 476:

11.           Mostafa Elm, Oil, Power, and Principle: Iran’s Oil Nationalization and Its Aftermath (Syracuse, NY: Syracuse University Press, 1992), 198–99 (Churchill); Robert Moskin, American Statecraft: The Story of the U.S. Foreign Service (New York: Thomas Dunne Books/St. Martin’s Press, 2013), 627–28 (Harriman).

12.           William Roger Louis, “Britain and the Overthrow of Mossadeq,” in Mark J. Gasiorowski and Malcolm Byrne, eds., Mohammad Mosaddeq and the 1953 Coup in Iran (Syracuse, NY: Syracuse University Press, 2004), 168. Cf. William R. Clark, Petrodollar Warfare: Oil, Iraq and the Future of the Dollar (Gabriola Island, BC: New Society Publishers, 2005), 125: “The Dulles brothers had already conceived a plot when Eisenhower became president in January 1953;” Tim Weiner, Legacy of Ashes: The History of the CIA (New York: Doubleday, 2007), 83: “[In November 1952] “The CIA was setting out to depose [Mossadeq] without the imprimatur of the White House.”

13.           Scot Macdonald, Rolling the Iron Dice: Historical Analogies and Decisions to Use Military Force in Regional Contingencies (Westport, CT: Greenwood Press, 2000), 98. Cf. Richard H. Immerman, John Foster Dulles: Piety, Pragmatism, and Power in U.S. Foreign Policy (Wilmington, DE: Scholarly Resources, 1999), 67. Allen Dulles played a personal role in TP/AJAX, by flying to Italy and persuading the frightened Shah to return to Tehran.

IMAGE: Peter Dale Scott

IMAGE: Dr. Mossadeq Waves

IMAGE: Dr Mossadeq enters Court

Where else do you see journalism of this quality and value?

Please help us do more. Make a tax-deductible contribution now.

Our Comment Policy

Keep it civilized, keep it relevant, keep it clear, keep it short. Please do not post links or promotional material. We reserve the right to edit and to delete comments where necessary.


15 responses to “The Deep State and the Bias of Official History”

  1. Title

    […]Here are a few of the sites we advocate for our visitors[…]

  2. Title

    […]Sites of interest we have a link to[…]

  3. Avatar vic_vega says:

    Daniel Estulin has been studying the bildeberg group for over 20 years. He also spent two years in the library at Venice, Italy looking over birth/death and marriage records for the past 1,000 years. He states that there are families that have been in power since the Roman times, much likely before. But certainly the powers during the Venetian Black Nobility are around today and more powerful than ever. He was shown a bank statement for the Krupp family (arms merchants since the late 1500s) for 112 Trillion usd. He says the families at the very top have a combined net worth of quadrillions of dollars. Henry Kissinger, G HW Bush, etc, all work for these powers.

  4. Avatar johnny says:

    You want to read some great quotes. Here is my suggestion

  5. Avatar Howard456 says:

    Here is an account of the MI6/CIA organized coup to overthrow the
    democratically elected Iranian PM Mohammed Mossadegh posted on line at
    Lobster, a UK based “journal of parapolitics”.

    A ‘great venture’: overthrowing the government of Iran
    by Mark Curtis

    From Lobster 30

    is a slightly abridged version of part of chapter four of Mark Curtis’s
    book The Ambiguities of Power: British Foreign Policy since 1945 (Zed
    Press, 1995).

    In August 1953 a coup overthrew Iran’s nationalist
    government of Mohammed Musaddiq and installed the Shah in power. The
    Shah subsequently used widespread repression and torture in a
    dictatorship that lasted until the 1979 Islamic revolution. The 1953
    coup is conventionally regarded primarily as a CIA operation, yet the
    planning record reveals not only that Britain was the prime mover in the
    initial project to overthrow the government but also that British
    resources contributed significantly to the eventual success of the
    operation. Two
    first-hand accounts of the Anglo-American sponsorship
    of the coup – by the MI6 and CIA officers primarily responsible for it –
    are useful in reconstructing events. (1) Many of the secret planning
    documents that reveal the British role have been removed from public
    access and some of them remain closed until the next century – for
    reasons of ‘national security’. Nevertheless, a fairly clear picture
    still emerges. Churchill later told the CIA officer responsible for the
    operation that he ‘would have loved nothing better than to have served
    under your command in this great venture’.

  6. Avatar JasoninMissouri says:

    Watch Bill Moyers PBS doc “The Secret Government” on youtube

  7. Avatar Jay Diamond says:

    C. Wright Mills is the father of deep state investigation !

    • Avatar Jay Diamond says:

      And then William Domhoff.

    • Avatar Sherlock says:

      I’d include Charles Beard as an academic pioneer investigator of America’ power elite, and whose critical historiography complements Mills’ sociology.

  8. Avatar walter says:

    D. Orlov and I. Panarin, among others and presaged by no less that Szilard, the inventor of The Bomb, argue that the Soviet “collapse” and the collapse of the American State trace to fundamental similarities and similar internal contradictions. Obviously each “collapse” is unique in history, (or “eimalig in der Geschichte”, as nazi propagandists used to spout). What Dr Peter describes, it might be argued, is the post-collapse simulacrum of America. Collapse, in such a view, has already happened and this scene to-day is what it looks like. This, however, would be an error. A more nuanced view would see to-days scene as a snapshot of a process wherein political collapse comes first and is followed by economic collapse – something unspeakable and yet obvious. Thanks Peter! Nice job.

  9. Avatar Orangutan. says:

    “There exists a shadowy government with its own Air Force, its own Navy, its own fundraising mechanism, and the ability to pursue its own ideas of national interest, free from all checks and balances, and free from the law itself.”
    — Senator Daniel K. Inouye at the Iran Contra Hearings (1987)

  10. Avatar Patriarch says:

    Worth the time:

    Fx Hollywood director Nathan Folks on EBOLA & Boston:

  11. Avatar omniadeo says:

    Indeed. Peter Dale Scott is not just a researcher, journalist and author. He is living proof that you can live with this stuff for a long time and remain sane. I think he is one of the 25 sane people in North America. (I ain’t on that list, but I am inspired by them.)

  12. Avatar Bryce says:

    Gotta love PDS. Keep him posting!

  13. Avatar John Casey says:

    Great work, but I think you need to consider all the money and diverted funds that have gone into the USG special access projects weapons projects, which has run into the trillions since the end of WWII. Where did all that money go? What weapons systems were developed? Do those systems bear in the present geopolitical situation for the Deep State? I know it is more or less impossible to get information on special access programs, but to ignore their existence seems wrong.