SEEKING THE HEAD OF THE OCTOPUS:
THE YEARS LEADING UP TO THE ALVAREZ EXECUTIONS
by Virginia McCullough 1/16/10
Among the many lives the patriarch of the Nichols’ family changed were those of his wife and children. In 1992 the second oldest child of John Philip and Joann Nichols was interviewed by author Ambrose L. Lane Sr. for the soon-to-be-published book Return of the Buffalo. At 32 years of age, nine years after his mother Joann’s death, John Paul Nichols said about his family:
I was thinking earlier today – I worked out this morning – that we’ve been 10 years on this Indian reservation –actually our family has been here for 13 years now. These stories I am telling you are not the stories of a typical guy that runs a hotel somewhere. In that sense, it’s exciting. I told you about the tension and stress and all that.
But this place has taken a huge toll on our family. In fact, it’s not the same family that arrived here in 1979. It just isn’t. I have to tell you, we’ve been through a catharsis where there’s evidence that exists, somewhat catalytic ([brought into focus] around the death of Mother, but even before and after, that you can’t live in this crazy environment, work as a family and expect the family to not suffer as a result. In fact, I think it’s a very high price to pay. I have had the luxury, and it is a luxury, to step out. I had to step out, because when you are in the midst of this, it makes perfect sense. But in fact, it is not a normal environment. It is not necessarily a healthy environment. It’s not a business that lends itself to a healthy environment. It is an inherently and politically unstable environment. It’s always the majority, but it is politically unstable nonetheless.
The “place” that took a huge toll on the Nichols family was an environment created by a visionary turned dictator who was enabled by state, federal and international politicians. No one man, no matter how driven, how matter how hard working or how dedicated could single handedly grease the thousands of rails necessary to send this train down the track this fast.
The white man’s control of the Cabazon Nation began in 1876 with President Ulysses S. Grant designating 1,700 acres of disparate desolate desert located approximately 20 miles north of California’s great Salton Sea as the Cabazon Reservation.
On February 8, 1887 Congress passed the Dawes Allotment Act (U. S. Statutes at Large, Vol. XXIV, p. 388 ff.), named after the author of the act Massachusetts Republican Senator Henry Dawes who had believed that owning private property would civilize the Native Americans. He defined “civilized” as being able to “wear civilized clothes…cultivate the ground, live in houses, ride in Studebaker [Conestoga] wagons, send children to school, drink whiskey [and] own property.”
In reality this Act would allow land that was not allotted to individuals and was held in trust by US government to be sold off to railroads, mining companies, ranchers, or other whites. Over the life of the Dawes Act approximately 90,000 Indians were made landless and the decimation of the contiguous reservation land eliminated hunting as a mean of subsistence. The website nebraskastudies.org states:
Tribal ownership, and tribes themselves, were simply to disappear. The story would be much the same across much of the West. Before the Dawes Act, some 150 million acres remained in Indian hands. Within twenty years, two-thirds of their land was gone. The reservation system was nearly destroyed.
In 1928 the Calvin Coolidge Administration issued the Meriam Report that found the Dawes Act had been used to illegally deprive Native Americans of their land rights.
The man who was a close friend of John Philip Nichols and who became the first attorney for the Cabazon tribe as they sought to legalize gaming on their reservation was the former Senator from South Dakota James George Abourezk. In his book Advise and Dissent published in November 1989 Abourezk commented on the Dawes Act:
The Act took the land out of tribal control and allotted each Indian adult 16 acres of land to be held in trust by the government. Because the land could not be sold, with the passing of each generation, ownership of the allotted quarter section had to be shared by all the heirs of the original allottee. As generations passed, an individual share of 1/256th of a quarter of land was not uncommon…The Allotment Act was intended to “civilize” the Indians and to get their land out of common, tribal ownership and into the hands of white men.
James Abourezk, son of Lebanese immigrants served South Dakota in the US Senate from 1973 until he resigned his safe seat on January 3, 1979.
Three days later, January 6, 1979, the Cabazon Tribal Council passed resolutions removing tribal spokesman Joseph R. Benitez and other supporting tribal members and replacing them with Art Welmas, Fred Alvarez, and James and Sam Welmas.
Two more important matters would be addressed at the January 18, 1979 meeting (1) the tribe would request now former Senator Abourezk to use his political pressure to help expedite the Tribe’s application for a postal sub-station on the reservation [and] (2) plans were made to hire Abourezk as the tribal attorney if he would donate his services.
At the Cabazon Council meeting of March 10, 1979 under resolution No. 38-79 the business committee retained the law firm of Abourezk and Feldman to represent the tribe in legal matters and authorized a retainer of $3,000 and hourly rates for Abourezk of $200 per hour and for Feldman of $75 per hour. The resolution was signed by Chief Art Wilma's and Vice-chairman Fred Alvarez.
Simultaneously, a Gambling Ordinance and a Liquor Ordinance were unanimously adopted. A ½ cent use tax and a ½ cent sales tax per package of cigarettes sold by the Cabazons was initiated and a motion was made and passed to donate one cent per card sold at each Bingo game and donate it to designated religious groups.
The Cabazon tribe either ignored or never saw an open letter sent on April 14, 1978 to tribes in California and Arizona by Alexander Lewis Sr. governor of the Gila River Indian Tribe near Phoenix, Arizona warning that Pro Plan had spent $65,500 in tribal federal funds during a three-year period with little to no results. Lewis also warned that [John Philip] created “dissension among tribal boards and councils” and “once the forces were divided the firm [Pro Plan] would step in with proposals to patch up the destruction at the expense of the tribal funds”.
The train was now barreling down the tracks and no one would be able to stop this money driven machine. In Return of the Buffalo John Philip Nichols said, "Pro Plan, which is my family, just wants your [Cabazons] backing. Once we get things rolling, if things aren't running the way you want them to run, you're welcome to fire us. You're just hiring us is all you're doing."..... "Well, I'm talking about a 10-year plan and a five-year plan, then a 10-year plan---with a tentative additional 10-years on top of that." He said, "You'd be surprised. It goes real quick...especially if you're successful. One trick is to bypass the BIA (Bureau of Indian Affairs) and go directly to Washington."And that is exactly what the Nichols family did and it would be over twenty years before the last of the Nichols family was forced to relinquish control over the reservation.
If John Philip Nichols was the visionary with the political connection to usurp and retain power, than his son John Paul Nichols was the young man with the business acumen to make the old man’s vision come true and John Paul would be the power behind the throne from the moment the tribe secured its legal counsel.
Under the joint management of John Philip and John Paul Nichols the tribal minutes show that resolutions were quickly adopted for gambling and liquor sales, Cabazon sponsorship of an Indian Olympics and Telethon was approved, all tribal land was frozen in preparation of an overall development plan and a motion passed exploring the possibility of selling a little known wonder drug, DMSO, which was not authorized for use by humans by the FDA. This information contained in a Sacramento Bee article by John Berthelsen also discussed tribal development plans such as growing guayule for resale to rubber companies and shipping coal from Kentucky to the reservation where favorable Indian tax laws would make reprocessing profitable, and reselling it to fossil fuel plants.
One month after James Abourezk and Glen Feldman were hired John Paul Nichols left his position at the greater Miami Howard Johnsons and arrived in Indio, California in April 1979. Nichols’ father had secured two investors Al Pearlman and Bill Blank and together they formed a company called P.N. Associates (Pearlman. Nichols Associates). John Paul Nichols was a principal in this joint venture and the venture had a contractual relationship with the tribe. John Paul has stated that it was his job to run the cigarette enterprises and any related businesses that P.N. might develop in the future. The joint venture was financed by approximately $50,000 of Al Pearlman’s money.
The P.N. Associates contract with the Cabazons was in addition to the contract John Philip Nichols has initiated on behalf of his family members with this same tribe. The 10-year deal the patriarch had secured would give the family business Pro Plan 50 percent of the profits of any business the senior Nichols brought to the reservation. Less than one year after John Paul’s arrival at the reservation Pro Plan salaries would total $90,000 a year. There is no public record of the salary John Paul drew under the P.N. Associates contract.
Under John Paul’s guidance the Cabazon opened a shop selling tax-free cigarettes one month after his arrival at the reservation. Among the shop’s first employees were Cabazon Treasurer Welmas, the youngest Nichols son Mark and Brenda James-Soulliere.
The infamous Gold Telex detailing the transfer of over 57 tons of gold and naming John Philip Nichols and giving his social security number “on behalf of all concerned parties” was dated Friday, June 27, 1979 and was designated by the code name “ALI-JVF Goldfinger 007”.
Half a world away events in Iran were having an impact on the small Indian tribe in Indio, California. The next year would see people in middle-eastern dress introduced to tribal members by their newly retained attorney James Abourezk and these guests would travel thousands of miles to meet members of the Cabazon nation.
Then on October 22, 1979 the very ill Shah of Iran, accompanied by his wife, entered New York Hospital-Cornell Medical Center to receive medical care. United States President Carter had made a fateful decision bowing to heavy political pressure and it would be a decision that would rock two nations and a tiny Indian reservation in California. The “student” revolution in Iran against the Shah and the United States culminated in the taking of the American hostages on November 4, 1979.
Even as the world political storms grew in strength there were some who tried to save the Cabazon Reservation from the wild winds tearing the tribe apart. In November of 1979 the head of the program office of the Indian Health Services wrote his Washington Superior, Assistant Surgeon General Emery Johnson a second memo of concern regarding John Philip Nichols. It stated in part that an investigation into events at the Cabazon reservation “were astonishing and leads one to speculate on the degree of competency, interest or ambivalence” of the agents who conducted the probe of Nichols’ activities. (Source: Sacramento Bee article by John Berthelsen)
Despite these concerns no regulators or politicians interfered with the Nichols family pursuit of new ventures to use in the name of the Cabazons. The politics influencing the future of the Cabazon nation were accelerating with each national and international event. Now the local disputes between the Cabazons and the City of Indio and the County of Riverside took a back seat. As the world wide events escalated the Cabazon nation would find itself right at the center of the horrific hurricane.
The “student” revolution in Iran against the Shah and the United States culminated in the taking of the American hostages on November 4, 1979. Then on November 12, 1979 all oil imports from Iran ended and on November 14 President Carter issued Executive Order 12-170 freezing about $8 billion worth of Iranian assets. Once again Nichols’ friend and Cabazon Attorney James Abourezk was involved as detailed in the excellent book 1983 book by Paul Hoffman entitled Lions of the Eighties:
The following day -- November 15 -- Chase Manhattan, citing the freeze, refused to make a $4 million interest payment on a $500 million loan to Iran from a consortium of eleven banks, led by itself. Chase Manhattan declared the loan in default on November 19 and on November 23 seized the accounts of Bank Markazi, Iran's central bank, to offset the debts of Iran's government. Six days later -- on November 29 -- Bank Markazi sued Chase Manhattan in London for release of $320 million deposited in Chase Manhattan's London branch. On December 6, Chase Manhattan filed suit in Manhattan's federal court against forty-seven Iranian concerns, including Bank Markazi and the National Iranian Oil Company for $366 million.
The great Iranian assets litigation explosion had started.
By the time the hostages were released fourteen months later, more than three hundred lawsuits attaching Iranian assets of more than $4 billion had been filed in federal courts around the nation. Other suits by American companies were started overseas. If the seizure of the Teheran embassy was a fifteen-month ordeal for the Americans held hostage there, it was a bonanza for the bar, generating millions of dollars in legal fees for more than one hundred major law firms. And neither the litigation nor the legal fees ended with the release of the hostages.
First, there was the handful that represented Iranian interests. The Iranian Government retained ABOUREZK, SHACK & MENDENHALL, the Washington law firm of South Dakota's James Abourezk, the first man of Arabic stock to sit in the U.S. Senate. Bank Markazi was represented by Boudin, Rabinowitz, Standard, Krinsky & Lieberman, P.C., the Forty-second Street firm of Leon and Boudin, a civil-rights lawyer best known for defending anti-Establishment radicals. (Click. The Cabazons: James Abourezk and Iran research.)
As the new decade descended upon the tiny Cabazon tribe it found itself intertwined with the events in the Middle East. In 1980 Nichols obtained the blue prints to Crown Prince Fahd’s palace in Tiaf, Saudi Arabiaand soon a plan was drafted for The Cabazons to provide security for the Saudi palace.
Jonathan Littman, reported on September 6, 1991 in the San Francisco Chronicle:
The Saudis were interested enough to do a background check on the Cabazons. Mohammad Jameel Hashem, consul of the Royal Embassy of Sandi Arabia in Washington, wrote former South Dakota Senator James Abourezk: “According to our blacklist for companies, the Cabazon Band of Mission Indians/Cabazon Trading Company and Wackenhut International are not included.” Translation: Neither the Cabazons nor Wackenhut were Jewish-run enterprises.
Things were moving rapidly at the reservation and on February 9, 1980 the tribe celebrated the formal dedication of its new community building. The building was the first substantial indication that the Cabazons might actually benefit from the many deals Nichols had been promoting.
Then on May 22, 1980 Fred Alvarez’s sister Linda Streeter addressed 6 pages of questions that reflected her concerns about the Cabazon interaction with the Nichols family and their businesses. The questions were addressed to John Philip Nichols, Art Welmas, Fred Alvarez, John James and Sam Welmas.
The Cabazon cigarette shop closed August 1980 but the next month the Cabazon Security Corporation Inc. was formed. Then in October the Cabazons opened a poker-pan-lo-ball casino. Soon the City of Indio and Riverside County tried unsuccessfully to shut down the casino operation.
Then sometime between May and October of 1980 Fred Alvarez wrote a letter to Presidential candidate Ronald Reagan. That letter has never been located but interviews with various sources close to Fred Alvarez said Alvarez expressed his thoughts about the troubling events occurring at his reservation.
It is known that this letter was received by Ronald Reagan because Reagan’s reply to Alvarez and the envelope it was mailed in were discovered in Fred’s papers following his assassination. The envelope was addressed to "Fred Alvarez, 1st Vice Chairman, Cabazon Band of Mission Indians, 83-203 Indio Blvd., Indio, CA 92201." Ronald Reagan’s return address was "8941 Airport Boulevard, Suite 1430, Los Angeles, California 90045." The letter mailed on October 7, 1980 reads as follows:
Dear Mr. Alvarez:
Thank you very much for your thoughtfulness in sharing a copy of your letter to me. I found your comments to be very interesting.
Sincerely, Ronald Reagan
The politics influencing the future of the Cabazon nation were accelerating with each national and international event. Now the local disputes between the Cabazons and the City of Indio and the County of Riverside took a back seat. As the world wide events escalated the Cabazon nation would find itself right at the center of the horrific hurricane.
On November 15, 1980 Cabazon member Joe Benitez was taken before a tribal tribunal and found guilty of charges involving the misuse of tribal funds but local law enforcement in Riverside County was not involved. The attorney for representing Joe Benitez at the time was Steve Rios, a man whose advice was later going to be sought by Benitez and Fred Alvarez regarding the alleged misuse of Cabazon funds by John Philip Nichols.
The1980 annual Christmas Party for the Cabazons was held at a country club in Rancho Mirage under very unusual circumstances. During past Christmas parties wine was served to those assembled. This year, as in the past, wine glasses were set out on the banquet tables, but this year the wine glasses were quickly whisked away as John Philip Nichols explained that partaking of alcohol would offend the religious beliefs of this year’s guests and so there would be none served.
Shortly thereafter Nichols introduced Cabazon attorney and now attorney for the Iranian government James Abourezk. According to those in attendance Mr. Abourezk gave a short speech asking the Cabazon members and their guests to think about what they could do to help President- elect Ronald Reagan gain the release of the hostages held in Iran.
The coming decade would see many new business ventures come and go at the Cabazon nation.
In January 1981 the U.S. Supreme Court ruled Indians could not sell cigarettes without collecting taxes on them. As a consequence the Cigarette Shop on the reservation later filed for bankruptcy.
In April 1981 the Wackenhut Security firm of Florida entered into a joint venture with the Cabazon tribe. At the time this new business began the huge Wackenhut Corporation already had a $24 million contract to provide security to the Saudi Arabian government. That same month a young man named Jimmy Hughes trained in Special Forces was hired by the Cabazon/Wackenhut Joint Venture according to a time line written by the venture’s President Peter Zokosky four years later.
Ambrose L. Lane, Sr., recounted in Return of the Buffalo (pp. 84-85):
On April 9, 1981, “To Whom It May Concern” letter, R. Barry Ashby, Intersect’s Vice-President and Director, wrote the following:
This letter serves as evidence that Dr. John P. Nichols is authorized to convey and use two items of night vision equipment in his possession. These items are the model M 802 night vision goggle and the model M 841 night vision pocket scope. This equipment is for demonstration purpose and none other, as has been authorized by the manufacturer (Litton Industries), the sales representative (INTERSECT Corporation), and the United States government licensing agent (Department of State), to be in the care of Dr. Nichols.
A year earlier, Intersect provided a draft proposal and briefing booklet for Integrated Security Systems through Dr. Nichols for the United Arab Shipment Company of Jeddah, Saudi Arabia. The systems were proposals, ostensibly, for a Saudi palace. Dr. Nichols would later report to the Tribe that they had been misled about getting the Saudi contract.
During this period of optimism that federal contracts were probable, the Tribe –secure in its control of the CIS/WSI Joint Venture – placed Peter Zokosky on CIS’s Board of Directors, making him President and Security Officer, and Robert Frye Vice President. It was an attempt to maximize whatever clout these people may have had in the defense agencies. The payoff was small, but there was a payoff.
The CIS/WSI joint venture, with Wackenhut as its patron and Zokosky as its president, sought and secured Department of Defense security clearance from the Defense Investigative Service (DIS).
Then on April 15, 1981 2-page unsigned letter Preliminary Profit and Loss Statement reflected a total $292,826.71 and a net profit/loss of $35,476.48 to “Cabazon Business Committee, Mr. Rocco Zangari, Dr. John Nichols, Mr. Al Pearlman” from John Paul Nichols, Project Manager and an excerpt set forth:
....expenses you will find a preliminary profit and loss statement on the Cabazon Indian Casino operation for the period from November 15, 1980 to February 27, 1981. These are rough figures and must be confirmed by our CPA but are nonetheless accurate.
They include no capital expenses during this period but do include costs that could not be capitalized as they were expenses beginning with i.e. payroll for R. Zangari, F. Galea, etc. …(p 1)
In reality as we normalize our business, our profit picture at sales of $329,000 should show a profit of approximately $77,000 assuming our costs will be cut back to approximately $252,000 for a three month period – or $154,000 profit per year for Pro-Plan/Nichols family (p 2)
Between May 11 and May 22, 1981 John Philip Nichols, Peter Zokosky and Robert Frye met with a John Vanderwerker of Intersect Corporation at various US government facilities including the Picatinny Arsenal. Discussions were also held regarding Dr. Gerald Bull’s firm Valleyfield Chemical Products Corporation and another company called Canadian Resources International Limited which was seeking to conduct oil and gas exploration on Indian lands through the United States.
Throughout the month of May Fred Alvarez was surreptitiously entering the offices of John Philip Nichols and gathering the paperwork that documented these many deals around the world. He would call his sister Linda telling her what he was uncovering.
Fred Alvarez was threatened many times after it was discovered that he was opposing the Nichols regime. His mail box was shot up and his brand new motorcycle sabotaged. He received verbal warnings from friends and threats from his enemies. Fred sought help from many different people from private investigators and security firms to former college associates who lived out of state. It is reported that he even confided in the man now accused of his murder, Jimmy Hughes. Jimmy Hughes, in turn, allegedly talked to others that Fred Alvarez had confided in about his life being in danger.
Fred visited his parents, his sister and his aunt in Truckee, California and he also traveled to Utah to discuss his plight with old friends there asking if he could hang out at their home. They welcomed him but, like many others the stories that Fred told them about the contract out on his life by his own government seemed unbelievable. After all, who would have believed that a small Indian tribe would be involved in international revolutions and money laundering?
On June 5, 1981 Fred Alvarez went to a local reporter at the Daily News asking for help and detailing the corruption he had uncovered and he laid it at the door of John Philip Nichols. He told the reporter that he was going to get killed over this story.
On June 6, 1981 the Cabazon Tribe held an election and Brenda James defeated Fred Alvarez for 1st Vice Chairman.
23 days later Fred Alvarez, Ralph Boger and Patricia Castro were executed.
Virginia McCullough © 1/16/10
vmccullough@hotmail.com
