The Globalization of Federal Express

As FedEx moved into the 1980s, the company wanted to expand internationally. The company acquired Gelco Express out of Minneapolis, which already served 84 countries.1 It also bought companies abroad in Holland, UAE, and the UK. Smith also set his sights on longtime competitor Flying Tiger Line, but was initially turned down; however, Flying Tiger, facing tough financial circumstances, eventually had no other choice but to sell.

The transaction to buy Flying Tiger Line was facilitated by Saul P. Steinberg, a New York financier who had purchased a large stake in the airline. Steinberg was an interesting figure, having started his career leasing IBM computers before acquiring Reliance Insurance Company in 1968. After the purchase, he hired the to-be budget motel mogul Henry Silverman to help run the company. To do so, Silverman left his job at the bank White, Weld, & Co., the Boston Brahmin institution involved in securing the initial funding for FedEx that I mentioned earlier.

Steinberg also notably tried to buy the Oxford-based publishing house Pergamon Press from Robert Maxwell but only controlled it for a few years before Maxwell bought it back in 1974. For the uninitiated, Maxwell was a British-Israeli spy as well as the father of the infamous child trafficker and accomplice of Jeffrey Epstein, Ghislaine Maxwell. Together, Robert and Ghislaine were involved in the selling of the bugged PROMIS software to several countries including the Soviet Union, as well as Sandia and Los Alamos National Laboratories in the United States. The purchase of Pergamon by Steinberg was initially supported by Maxwell but eventually became a hostile takeover after relations between the two soured. Steinberg accused Maxwell of cooking his books in an effort to overvalue Pergamon, and Maxwell accused Steinberg of purposefully trying to undervalue Pergamon so he could purchase it at a better price. I think it’s safe to say there was probably malfeasance on both sides of the transaction.2

During the takeover struggle, Steinberg remained in the background while the British Rothschilds, who acted as Leasco’s advisers in the bid, rounded up the crucial 15% of Pergamon’s stock that is controlled by staid bankers in London’s City. That stock, added to Leasco’s 38% holding in the company, put Steinberg over the top.3

Maxwell was eventually able to wrestle the company back under his control and Steinberg moved on to other targets like Chemical Bank and Disney, where he again tried and failed to achieve a hostile takeover. The tussle exposed a lot about Steinberg and Maxwell, however. Steinberg was advised by the Rothschilds throughout the debacle, and Maxwell had Isidore Kerman on his side, a lawyer whom he shared with Aleister Crowley.4

A Brief History of the Flying Tigers

Flying Tiger Line was founded in 1945, immediately after the end of WWII. It was made up entirely of former pilots from Gen. Claire Chennault’s Flying Tigers, a joint operation between the United States, the UK, and the Republic of China, which was controlled by Chiang Kai-Shek’s Kuomintang (KMT) party. The purpose of the Flying Tigers was to support the Republic of China against Japan in the Second Sino-Japanese War. Before the end of the war, the Tigers were transitioned into flying the Hump Airlift over Myanmar in support of the KMT against Mao’s Communists.

In his book, The Strength of the Wolf, Douglas Valentine wrote about the Flying Tigers’ attending physician, Margaret Chung, and her connections to big time Mobsters like Busy Siegel, Meyer Lansky, Frank Costello, and Lucky Luciano. Chung was an “honorary member” of the Chinese-American criminal organization Hip Sing Tong and close associate of Busy Siegel’s courtesan Virginia Hill, whom she joined on numerous trips between San Francisco, Mexico City, and Nuevo Laredo, where Hill owned a nightclub. Chung herself would sometimes take large cash payments from Siegel and Hill and would deliver packages to Hill in New Orleans, Las Vegas, New York, and Chicago. These deals, according to Valentine, involved Kuomintang narcotics, and yet, despite the fact that the FBN agents “‘kept her under constant surveillance for years,’ they ‘were never able to make a case against her.’ Why not? Because she was protected, of course. Admiral Chester A. Nimitz was just one of her many influential friends in Washington.”5 Chung was the personification of the intersecting interests of organized crime, the China lobby, and the American government. While this type of character is not uncommon in stories of espionage, it should be noted that Chung was an early prototype of well-connected, federally-protected drug trafficker that would become more commonplace later into the 20th century with names like Santo Trafficante and Barry Seal.

After the war, Chennault and most of the pilots continued on in the United States military, clandestine or otherwise. Chennault famously went on to create the drug-smuggling CIA-front airline Air America. However, ten Flying Tigers pilots led by Robert William Prescott left the military to start an air freight and commercial passenger line out of Long Beach, California called Flying Tiger Line. One of its primary funders was Samuel B. Mosher and his company Signal Gas & Oil. Signal later went on to purchase the aerospace giants Bendix and Honeywell, and adopted the name of the latter. Anna Chennault, General Chennault’s wife, joined the company as its “Vice President of International Affairs.”6 Flying Tiger Line struggled financially for the first few years of business but eventually survived only because of contracts from the military.

The company was an industry pioneer in many ways. They were one of the very first airlines to offer refrigerated flights for perishable items. They were also one of the first airlines to create a denser seating arrangement on flights in order to have cheaper airfare. Flights that normally had 40 passengers were now able to carry close to 100.

Not all of these innovations were positive, however. In the 1950s, Flying Tiger Line was contracted by the US Immigration Service to deport hundreds of illegal Mexican farm workers back to Mexico. Another one of their first large contracts was transporting 35,000 Yemenite Jews from Southern Arabia for the United Jewish Appeal organization as part of Operation Magic Carpet, “fulfilling the Biblical prophecy that the Yemenites would be returned to Judea on the wings of an angel,” at least according to the zionist Americans and the Israelis they were working with.7

The Flying Tiger Line changed its business in summer 1949 to become a scheduled carrier, and started operating on Route 100 from Los Angeles to New York. Whether by luck or a premonition, at the beginning of 1950 Bob Prescott bought a fleet of 25 Curtiss C-46 Commando aircraft - the same aeroplanes that he and his companions had piloted over the "Hump". Then on 25th June 1950 communist North Korea invaded South Korea. The United States reacted: some days later, the C-46s of Flying Tiger Lines disembarked the first reinforcements in Korea. The Korean airlift had begun.8

Their military support continued on into the Korean War where they became the largest “civilian” contractor during the war, transporting thousands of troops, military freight, and even infant Korean orphans. They did the same in Vietnam in the 1960s. Not all of Flying Tiger Line’s operations were out in the open, however. There has been plenty of speculation over the years about Flying Tiger Line’s affiliation with the CIA.

As part of an investigation into the drug smuggling and CIA-connected Australian bank Nugan Hand, Joe Volkman, a former U.S. Customs Investigator, wrote in a report to the Senate Intelligence committee, “the CIA was smuggling drugs to Australia in the late 1970s via the CIA's Pine Gap intelligence facility in central Australia. The drugs were said to have been flown in on regular U.S. Air Force planes supplying other goods to the CIA base. Flying Tigers airline, which used to fly into Pine Gap, was also said to be involved in the heroin smuggling operation. Flying Tigers, a US company, has a certain expertise in such business: it helped the CIA transport heroin out of Southeast Asia during the U.S. war in Indochina.”9

In 1980, Flying Tiger merged with Seaboard World Airlines, another CIA front company. In 1964, Seaboard took over Air America’s joint operation with USAID in Laos, after their reputation had soured in the country, having been painted by the Pathet Lao as a “paramilitary organization” instead of a humanitarian one they so desperately tried to portray themselves as. Famously, Seaboard was the airline used by the American government to extract Cuban Dictator Fulgencio Batista from the Dominican Republic after he fled there during the Cuban revolution in 1959.10 The company also openly transported supplies to the Mujahideen in Afghanistan for the CIA in the 70s and 80s.11

There are intertwining connections to Iran-Contra, the Savings and Loan scandal, and even the Reagan October Surprise plot, through Flying Tiger and its subsidiaries. According to the Oct. 23, 1988 issue of the Boston Globe, a pilot for TigerAir allegedly flew future CIA director William Casey and George H.W. Bush to Paris to meet secretly with representatives of the Khomeini government in Iran for the purposes of postponing a hostage deal until after Reagan’s inauguration, depriving incumbent U.S. President Jimmy Carter a huge victory before the election in November. The pilot, allegedly, was Kenneth Qualls, a manager for TigerAir, a subsidiary of Tiger Leasing, which itself was a subsidiary of Tiger International, the final iteration of the Flying Tiger Line parent company.12 The Boston Globe even referred to TigerAir as a “CIA proprietary.”13

This information came about as testimony from Richard Brenneke, a former employee of Air America, at a sentencing hearing for Heinrich Rupp, a former Luftwaffe pilot, who had been convicted of bank fraud in Aurora, Colorado.14 Brenneke told the court that he was on the plane flown by Qualls, along with Rupp, Casey, and Bush. Brenneke testified in the hopes of getting his friend Rupp a lessened sentence. Brenneke even called Qualls to try and enlist his help and, curiously, secretly recorded the conversation. The recording was then given to the Globe, who reproduced some select quotes. What Qualls said is rather illuminating.

So what if somebody gave somebody $40 million for 52 hostages? They're alive aren't they? If they're alive, then who cares? I mean, who really cares? Who cares if he was there and he lied? You know, the fact is that he made a deal, and I said, deals like that are made in the Middle East all the time, and if you don't believe me, read the Koran. I said the potato farmer in Iowa is going to be pissed at Bush and want an impeachment. But the people that know about the world are gonna say, 'Hey, they did what they had to do.’ Carter wasn't going to do shit.15

Brenneke testified that, “Rupp was a CIA contract agent who had worked with Air America in Southeast Asia” and insisted that, “Rupp’s illicit banking activities were sanctioned by the CIA,” although the agency denied these claims, unsurprisingly. The testimony was apparently convincing enough to reduce his original sentence of forty years to just two. Brenneke himself admitted to trafficking arms to the Khomeini government as part of the Iran-Contra conspiracy.

Brenneke has a history of making controversial claims, especially about himself. It has never been fully verified whether Brenneke’s claims about the October Surprise are true. Curiously, the CIA went out of their way to say that neither Brenneke nor Rupp were ever involved in CIA operations, violating their own policy of never confirming or denying “whether a private citizen has worked for the agency as a contract agent or asset.”16 Following the release of the statement by the CIA, the Denver U.S. Attorney’s Office indicted Brenneke for making false statements but he was eventually fully acquitted. So while there’s no definitive proof of Brenneke’s claims, they have survived two entirely separate jury trials. On top of that, it was revealed in discovery that the CIA admitted that Heinrich Rupp received flying lessons at a CIA proprietary airline, Intermountain Aviation, which suggests the CIA was not being entirely truthful about Rupp (and, most likely, Brenneke) in the first place.17

The October Surprise wasn’t Qualls only rodeo, he was also the lead pilot for Charles Keating’s American Continental Corp., one of the “Keating Five” companies at the center of the Savings and Loan crisis. Additionally, Qualls was President Gerald R. Ford’s personal pilot for some time. President Ford, funnily enough, served on the board of Tiger International in the 80s.18 Even stranger is the fact that Charles Keating ended up becoming a large investor in Saul Steinberg’s Reliance Capital Group, partly owned by the infamous junk bond banker Michael Milken and his brother Lowell.19

Returning to the matter at hand, Fred Smith was eager to buy Flying Tigers out of fear of it getting bought by UPS first. The most valuable asset Flying Tigers really had were its routes into China– its tangible assets like 747s were in dire need of maintenance and repair. Smith struggled to consolidate the two companies, especially the newly acquired 970 unionized pilots and 5,000 ground workers from Flying Tigers. By 1991, FedEx was once again operating at a loss, this time of hundreds of millions annually.20

The acquisition of Flying Tigers in 1989 allowed FedEx to leapfrog to a powerful international position, giving it traffic rights in such key markets as Hong Kong, Singapore, Malaysia, South Korea, Australia, Brazil, and Venezuela. In Japan, where FedEx previously had government permission for just one daily flight in and out of the country, the Flying Tigers acquisition granted the company slots for six planes in Tokyo and the right to carry freight between the United States and Japan and other Asian destinations.21

FedEx was able to acquire even more routes in 1995, mostly into mainland China, through a deal with yet another CIA front, Evergreen International Airlines. Evergreen was in financial trouble and FedEx was able to trade straight cash for routes.22 Evergreen itself was the amalgamation of Intermountain Aviation (a CIA front) and Johnson Flying Services (a CIA-affiliated company).23

All in all, the purchase of Flying Tigers was not only a business decision but seems to be one of many consolidations of increasingly obsolete CIA fronts that had ceased to serve their purposes. Perhaps they had become too entangled in scandals like Iran-Contra, the Savings & Loan crisis, and the October Surprise plot, and just as dirty money needs to be laundered, so do front companies.

FedEx and the Stanford Research Institute

Around the turn of the 21st century, the Stanford Research Institute (SRI), another known CIA front, completed a comprehensive report on FedEx and its impacts on the “New Economy.” SRI coined this term to describe the shifting nature of the U.S. economy as it moved away from domestic manufacturing and towards a more service-based economy. This New Economy is also representative of the advent of the internet and other novel communication technologies. SRI describes FedEx as a “bridge” from the Old Economy into the New, highlighting the company’s adoption of new technologies that fundamentally altered the way FedEx conducted business. One of the most important of these technologies was the Customers, Operations, and Services Master On-line System (COSMOS) and the SuperTracker barcode scanning device (a proprietary technology exclusive to FedEx at the time) that allowed the company and its customers to track shipments as they moved through the system.24

Not only was FedEx a model company for this New Economy, the services it provided were instrumental in ushering entire industries into this new economic paradigm. The ability to ship materials at lightning speed (comparatively) shaped how companies did business moving into the 21st century. The integration of data networking and the internet also changed how businesses analyzed their own processes, as well as created an entirely new market venue through e-commerce.

One of the most important characteristics of this New Economy, especially as it relates to international shipping, is the dominating doctrine of “just-in-time” (JIT) logistics. Just-in-time logistics radically changed how businesses governed their inventory. “First introduced in Japan [by Toyota], the JIT manufacturing practice was fundamentally made possible in the United States by the availability of reliable, fast-turnaround express delivery companies such as FedEx.”25 The ability to shrink your on-hand inventory in favor of a more stable and reliable supply chain, that guaranteed you would have just enough supply to meet demand at any given time, allowed companies to cut costs related to inventory storage and management at all points along the supply chain. In fact, many companies opted to completely outsource their supply-chain to FedEx through a service called “virtual warehousing.” FedEx thrived in this new world of just-in-time logistics since rapid-turnaround was their specialty, and it quickly became one of their primary catalysts for growth.

Just-in-time logistics wasn’t without its own risks and disadvantages, however. This new way of managing and organizing your supply chain was completely dependent on novel, largely untested technologies. Just-in-time manufacturing required that materials be delivered at precisely the right time – materials arriving too early, or too late, would create problems in the supply chain, leading to cascading effects in all directions. Eventually, the technology and its users proved themselves capable of handling these issues and just-in-time logistics became the dominant paradigm of supply chain management heading into the 21st century.

This system worked well, until it didn’t, and this precarious arrangement that multinational corporations placed themselves in is exactly what Ansar Allah, aka the Houthis, in Yemen have identified as an achilles heel for Western imperialist capitalism. Following the ruthless escalation of genocidal violence in Gaza by the Israelis after October 7, the Houthis began targeting American, British, and Israeli ships in the Red Sea in an effort to pressure the Israelis into ending the genocide. The Red Sea is a major shipping bottleneck right off the coast of Yemen, used by every single vessel that needs to cross through the Suez Canal, into or out of the Mediterranean, or roughly 20% of global container shipping.26 This became such a problem for the West that in May 2025, President Donald Trump was forced to capitulate and come to an agreement with the Houthis that the Americans would end their bombing campaign in Yemen if American ships were left alone. This was an incredible accomplishment for the small but mighty Ansar Allah movement, and arguably the poorest country in the world, especially since this agreement did not extend to Israeli vessels or the Houthis’ targeting of mainland Israel with medium-range missiles. Ashok Kumar, professor of international political economy at the University of London, wrote about this historical moment in Jacobin in May 2025:

The United States and its allies, despite their overwhelming firepower, struggled to counter a campaign that targeted not just ships but the underlying economics of maritime trade. Where traditional military doctrine prioritizes brute force, Ansar Allah’s approach exploited systemic weaknesses — consolidated shipping routes, just-in-time logistics, and risk-averse insurance markets. The result was a crisis that could not be solved by missiles alone. This conflict has broader implications for how power is projected in the twenty-first century. Military dominance no longer guarantees control when economic pressure points — shipping lanes, supply chains, financial systems — can be contested by unconventional means. The tools of globalization, designed to maximize efficiency, have also created new vulnerabilities.27

Another novel, untested technology FedEx was eager to implement came in the aftermath of 9/11. Working in concert with the newly established Department of Homeland Security, FedEx contributed one of its jets to test the effectiveness of a high-tech infrared laser missile defense system mounted to the underside of a plane, for the purpose of defending against attacks from shoulder-fired missiles. “Calls for putting the defense systems on commercial planes took on new urgency in 2002. That year, two missiles were fired at a Boeing 757 in Kenya that had been chartered by an Israeli airline. Both missed.” However, the New York Times also reported that numerous security experts believed the focus on these kinds of missiles was misdirected. This really seemed to be nothing more than a cash grab for companies like Northrop Grumman and BAE Systems, taking advantage of the post-9/11 islamophobia frenzy. “One Northrop briefing featured photographs of men in long, loose robes taking a missile launcher out of a car and firing a round into the air.” The price itself, over $1 million per device, probably killed this thing before it ever took off.28

What does it really mean to be SRI’s poster child for the New Economy? Is there some inherent quality of FedEx and its founders that set them apart from other companies and allowed them to succeed in ways many could not? Or was FedEx given all the tools needed to succeed by those in power, in order to build yet another capitalist, imperialist behemoth? In 1990, FedEx donated four Boeing 747s and three McDonnell Douglas DC- 10s for transporting military cargo in Operation Desert Storm.29 That same year, FedEx “pioneered the expansion of air-express services to Russia and the former Communist-bloc nations of Eastern Europe.” FedEx also focused on establishing a presence in Taiwan and became the only express carrier with the permissions necessary to move cargo between Hong Kong and other parts of Asia, routes that were extremely restricted at the time. Similar gains were made in Latin America around this time, as well.30 It’s abundantly clear how valuable this company is to those who have a vested interest in maintaining American hegemony abroad, and you could certainly make the case that was true before FedEx even had their IPO.

Today’s FedEx

Much like Flying Tiger Line was used by the federal government to traffic migrants both into and out of our country, FedEx plays an integral role in maintaining our nation’s border “security.” In 2011, Gen. Barry McCaffrey and Maj. Gen. Robert H. Scales were commissioned by the Texas state government to write a strategic military assessment on Texas’ border security. It revealed that companies like UPS and FedEx were brought into the network of agencies and other partners that share intelligence in the fight against gangs and cartels. In his book Drug War Capitalism, Dawn Paley talks about this network and its origins in the US military in yet another case of our imperialist chickens coming home to roost.

In 2006, Texas, under the governorship of Rick Perry, launched the Unified Command (UC) structure in six urban centers along the Texas-Mexico border, bringing together federal, state, and tribal organizations, including the Joint Terrorism Task Force, Border Patrol, US Immigration and Customs Enforcement (ICE), local police departments, Parks and Wildlife, state military forces, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the FBI. At the UCs, these armed groups work hand in hand with other government agencies, including the US Postal Service and the Department of Transportation; corporations, including UPS and FedEx; as well as nongovernmental outfits like the reactionary Texas and Southwestern Cattle Raisers Association.31

FedEx isn’t just deeply and actively enmeshed in U.S. military and intelligence networks, they’ve gone a step further to create their own armed force. In 2004, the company was unsurprisingly able to convince the Tennessee state legislature to change state law in order to allow FedEx to employ its own police force with full police powers. The company cited the use of private police by railroads, dating back to the 1880s. The legislation was sponsored by then State Senator, now Democratic Congressman, Steve Cohen. On top of conducting whatever investigations are needed by the company, the private FedEx police are also part of the FBI’s joint terrorism task force for the Memphis area, one of 66 regional task forces around the country. According to the Wall Street Journal, task force members “are entrusted with more-sensitive and specific data regarding terrorist threats than businesses usually receive. FedEx is the only major air carrier that is a task-force member.”32 This is really just the formalization of already existing, informal channels of information sharing and relationships between FedEx and the FBI. The WSJ went on to say, “Air carriers generally have a good relationship with the FBI because many of the airlines' security personnel are former agents.”33

From what I can gather, the FedEx Air Carrier Police Department’s (their official name) police powers officially end at the Tennessee border, at least when it comes to warrants and arrests, but I haven’t seen anything that would prevent them from operating and conducting investigations across the country, and frankly all over the world, covertly or otherwise, wherever FedEx operates.

FedEx has long been a pioneer and a testing ground for new technologies, ever since the creation of the Advanced Projects and Research Group in the 80s. The FedEx of today is no different and, as recently as last year, reports have come out about FedEx working with AI companies to implement surveillance systems on vehicles and inside warehouses, all in the name of “eliminating crime.”34 One of these reports from Forbes detailed a new relationship between the FedEx secret police and a burgeoning surveillance tech company, Flock Safety. The products sold by Flock are really nothing new: license plate reader cameras, home security systems, surveillance drones, and gunshot detectors (similar to ShotSpotter). What is new, however, is how these technologies are being used and shared.

Forbes has learned the shipping and business services company is using AI tools made by Flock Safety, a $4 billion car surveillance startup, to monitor its distribution and cargo facilities across the United States. As part of the deal, FedEx is providing its Flock surveillance feeds to law enforcement, an arrangement that Flock has with at least four multi-billion dollar private companies. But publicly available documents reveal that some local police departments are also sharing their Flock feeds with FedEx — a rare instance of a private company availing itself of a police surveillance apparatus.35

So not only is FedEx feeding video and data into the Flock system with cameras, they are also receiving data and video from the company and from police departments that also use Flock. At the time this article was written, two police departments were actively sharing camera feeds with FedEx: the Shelby County Sheriff’s Office in Tennessee and the Pittsboro Police Department in Indiana. So now we know that the FedEx Air Carrier Police Department is operating across state borders with very little, if any, oversight. Other police departments that Forbes confirmed having access to FedEx cameras include the Memphis Police Department and the Greenwood Police Department in Indiana. Flock’s Wikipedia page will have you believe that this was just a friendly startup among college friends after they graduated from Georgia Tech but, in reality, Flock got its start when it received $482 million in venture capital from the infamous Peter Thiel-connected firm, Andreesen Horowitz, run by the egghead himself, Marc Andreesen.

FedEx is far from the only company to tap into this ever-growing surveillance network, joining the likes of America’s largest health insurer, Kaiser Permanente, and Lowe’s hardware. Kaiser is itself tapped into the Northern California Regional Intelligence Center, where it shares its Flock camera feeds with California state law enforcement. Spokespeople for Flock have tried to downplay the possible violations of personal privacy it is infringing on, while also exaggerating their own impact on crime rates. Forbes journalist Thomas Brewster even found that Flock was blatantly breaking the law in some cases where they had installed cameras without the necessary permits.36

And don’t be fooled that Flock or FedEx or whoever is using these cameras and surveillance systems are doing this out of a genuine concern for fighting crime. A June 3, 2025, article from the Atlanta Community Press Collective revealed that the Atlanta Police Department was utilizing Flock license plate reader cameras on behalf of ICE.37 Unless you’ve been living under a rock, mass deportations have been sweeping across the country ever since Donald Trump took office in January and many innocent people and even American citizens, mostly children of undocumented immigrants, have been caught up in the dragnet.38 ICE has even made it protocol to arrest people as they show up for their citizenship hearings at court in a flagrant disregard for basic human decency or the law.39 Luckily, there does seem to be some backlash against Flock and the police departments that use it. There’s a good amount of negative media, mostly from Forbes, surprisingly, about the efficacy of Flock cameras and the privacy issues associated with the implementation of this new mass surveillance tool. Outraged community members in the city of Austin, TX were able to get the city to actually cancel their contract with Flock40 and San Diego is poised to do the same.41

If FedEx really cared about fighting crime so much, they should probably take a deep, hard look in the mirror because, after just a few minutes of searching the past twenty years of news articles about the company reveals an abundance of criminality at the hands of FedEx employees. In April of 2000, the DEA busted a Jamaican-based narcotics ring that involved at least twenty-two FedEx drivers and 121 tons of Mexican marijuana, supplied by the Arellano Felix cartel. Over a hundred people were arrested in total. The Feds also seized “8 firearms and more than $4 million in cash and assets.” The smugglers were also assisted by three FedEx customer service representatives, who provided forged shipping labels, and even a “FedEx security officer.” This was a huge operation that lasted for years and it’s hard to imagine it being able to continue for any amount of time without the knowledge and permission of some higher-ups, who are notably absent from the arrests.42 Cartels continue to use FedEx for shipping large amounts of drugs to this day, including in 2019 in San Diego,43 and in 2023 in Texas.44

In 2016, FedEx was indicted for knowingly shipping controlled substances from online black market pharmacies. These online pill mills would use FedEx to ship prescription medications to customers who hadn’t received any kind of prescription. The company even went so far as to open up lines of credit for these fake pharmacies. FedEx had been previously notified by law enforcement that they were aiding and abetting a criminal enterprise but FedEx refused to stop, claiming innocence all the way to the end. Curiously, the case was dropped four days into the trial, essentially on a technicality.45

“FEDEX knew that the Chhabra-Smoley Organization and Superior Drugs were each distributing controlled substances and prescription drugs based solely on a customer’s completion of an online questionnaire,” the indictment reads. “Nevertheless, FEDEX continued to ship controlled substances and prescription drugs for the Chabra-Smoley Organization and Superior Drugs.” …In 2004, the DEA estimated that FedEx had 200 registered online pharmacies. By 2010, it had more than 600. As early as the mid-2000s, the indictment reveals, employees in multiple states had allegedly expressed concerns to management about the dangers of delivering addictive pills. According to the investigation, deliverymen and women reported being “stopped on the road by Internet pharmacy customers demanding packages of pills” and “[being] threatened if they insisted on delivering a package to the address instead of giving the package to the customer who demanded it.” Others claimed that customers were “doctor shopping” and expressed concern that some of them had “overdosed and died.”46

It is abundantly clear that FedEx does not care about breaking the law or trafficking illegal drugs, especially when there is money to be made. They don’t even try to hide it. They did the exact same thing in 2019 for two cigarette smuggling companies and were fined $35.4 million by New York State and New York City for their criminal actions.47

What’s important to remember as we close out our investigation into the history of America’s largest mail carrier is that FedEx is not an aberration. It is an elucidating window into the intersections of government, military, intelligence, corporations, and organized crime. The history of FedEx is the history of the United States at the turn of the new millenia. Not only does it show us where we’ve come from but also where we’re going. FedEx continues to lead the way in testing technologies that increase the disparities between the technocratic ruling elite and the working masses around the world who are responsible for all of this country’s wealth. FedEx doesn’t discriminate when it comes to their participation in the genocide of Palestinans in Gaza or the eradication of law-abiding immigrants back across the southern border. FedEx is all too happy to violate our civil liberties in favor of testing horrifying AI surveillance technologies in service of the intelligence community or just simply their wallet.

This company, the people who created it, and the people who are bringing it into the future are all downstream of imperialist projects, theaters of war, and shadowy rooms where the rich plot against you. FedEx is far from the only company that embodies these principles. In fact, they’re probably far from the worst in a world of Palantirs, Metas, and Googles. But its tentacles do seem to reach all of these different corners of America’s hidden history and we can use it to see past what traditional media and institutions would have you believe about our past and our current.

My method has been far from perfect. This is only the first time I’ve attempted to put a segment of American empire under the microscope and dissect its disgusting entrails. I know I have a lot to learn from some of the great American investigators that have come before me like Peter Dale Scott, Doug Valentine, and Dr. Wendy Painting, just to name a few. But we need more of this. We need more people to take a critical eye at America’s corrupt and hidden infrastructures of power. And hopefully someday we will reach a critical mass of Americans who have become aware of their oppressed state and how much power we have collectively over the few who rule over us.

Frustration with the airplane brokerage business and its inefficiencies led Smith to explore other business ventures. Smith began looking into buying a fleet of Dassault Falcons (a smallish fanjet) that were being sold at a low price by PanAm, who was trying to get rid of them. He conferred with Irby V. Tedder, his company’s executive vice president at the time. Tedder was a retired Air Force colonel who served in the 70th Strategic Reconnaissance Wing (now the 70th Intelligence Wing).1 In the 50s and 60s, the 70th Wing was stationed in Little Rock and conducted surveillance missions using B-47s over Soviet Russia, taking aerial photographs and radar recordings of the path the nuclear bombers would take in the event of an attack.2 Some of these flights also launched from Thule AFB in Greenland.

Now that he had his eyes set on PanAm’s Falcon jets, Smith explored different business ideas to use them for. One of these early ideas was to privatize the postal service. "We sent a couple of guys up to Washington," Tedder told Vance Trimble in an interview. “They got permission to go into any phase of the postal service and, you know, check out the possibility of doing it better.” It sounds like the Nixon administration was toying with the idea of privatization as well. In fact, that same year there was a major strike by Postal Service workers, which led to the Postal Reorganization Act. While this new law did grant workers the right to collectively bargain, it also cut all federal funding, making it an independent agency that would have to “pay for itself.”3 This bill was the first of a string of legislation by Republicans that will ultimately bankrupt the agency, if action isn’t taken by future Congresses. As we will see, FedEx ultimately does become a sort of privatized Postal Service, since USPS discontinued airmail in the 1970s, and began outsourcing many of their air routes to FedEx and other companies as well. Not only is FedEx used today by every level of government, businesses large and small, there is also some evidence pointing toward FedEx being used by the intelligence community and some of the more secret aspects of our government.

Another early idea was to be a “flying courier for bond houses.” At the time, it was a lengthy and cumbersome process to move physical bonds between financial institutions. This plan didn’t gain any traction because they couldn’t get any insurance companies to cover it over fears of plane crashes or rogue pilots taking off with planefuls of bonds.4

A third idea along these same lines was to provide the Federal Reserve with a way to transport checks between different regional reserve banks as a way to solve the problem of lengthy delays for clearing the checks. Smith was so sure that this idea would work, he went ahead and purchased two Falcon jets from PanAm, using $3 million of Squibb-Beechnut stock (which Smith received from his father’s inheritance) as collateral. This is also when he decided to name his new business Federal Express. The Federal Reserve ultimately turned him down, however, and Smith was stuck with his two Falcon jets. The idea must not have been too bad, since the Federal Reserve actually adopted Smith’s hub and spoke system for transporting inter-bank checks several years later without him.

After the plan with the Fed fell through, Smith began exploring other ideas and investors. He was now focused on his original idea for a national overnight air shipping network that would become what we know today as FedEx. It was around this time he met Art Bass, a marketing consultant from New York, and Harmon L. “Buck” Remmell, VP of the Wall Street banking investment firm White, Weld & Company. Smith was introduced to Remmell through a banker in Little Rock (possibly Jackson Stephens?).5

A native of Newport, Arkansas, Remmell “talked our language” and understood the Dixie mind-set, which Smith believed would make it easier to deal with Wall Street men. Smith asked him about getting investors to put $15 million to $30 million in Federal Express.6

White, Weld, & Co. (WWC) was a historically Boston Brahmin-controlled investment bank that, at the time of their involvement with FedEx, was led by George Herbert Walker Jr., uncle of President George H.W. Bush. The Boston Brahmins are an elite group of wealthy New England WASP families that are largely descended from early English colonists. WWC was also providing loans to Sam Walton of Walmart to help build his fledgling business around this same time. Smith was already connected to the Bushes through his friendship with George W. at Yale – is this how he got put on WWC’s radar? Why was Arkansas such a focus of all this Boston Brahmin money at the same time in the early 70s?

In order to secure funding from WWC, Remmell advised Smith to hire consultants to do a thorough market research and analysis on his business proposal. Smith had already enlisted Art Bass’s Aerospace Advanced Planning Group (AAPG) for this purpose, but Remmell wanted Smith to use someone with a bit more name recognition. Smith ended up hiring Roger Frock of A.T. Kearny & Co. to perform a simultaneous analysis alongside Art Bass’ AAPG, although neither were aware of the other. This way Smith could sell his idea to banks and investors with the support of two independent research reports. They did indeed come to the same conclusion – the market was eager for a reliable express shipping company. At the time, the industry was dominated by companies like Flying Tigers and Emery Air Freight, but both were “erratic and frequently late.” Despite this, they were still raking in hundreds of millions of dollars in revenue annually. This was the market gap Fred Smith had been hawking about. In fact, according to both reports, it was even bigger than he estimated, with possible revenue estimates reaching up to $1 billion annually.7 There was also another gap that was identified – the fact that FedEx’s planes would be making most of their trips at night when most commercial airplanes were already grounded for the day, freeing up necessary runway and airspace. Frock’s proposal called for 30 falcon jets and up to $16 million more in additional funding.8 After completing their research, Roger Frock and Art Bass eventually joined FedEx’s executive team.

Smith started buying up all the falcon jets he could find. On top of the two he had already bought from PanAm, he also purchased an additional eight used falcons, one of which belonged to Frank Sinatra.9 He also agreed on an option with PanAm to buy the additional twenty-three falcons he originally wanted. The funding for these planes came from Little Rock’s own Worthen Bank. The only thing left was to get the Civil Aeronautics Board (CAB), a predecessor to the NTSB, to change a weight regulation that would allow Federal Express to operate modified falcons as air freighters. The company used Jackson Stephen’s Little Rock Airmotive (LRA) to modify the planes, and Smith spent considerable time and effort in Washington trying to get the regulation changed.

Jackson Stephens was, for most of his life, one of the wealthiest men in Arkansas. A graduate of the Naval Academy, Jackson started the Little Rock investment house Stephens Inc. with his brother, Witt Stephens. While the two brothers may have had different politics, personally, their bank played both sides of the political spectrum. The firm bankrolled Bill Clinton’s successful presidential run in 1992 and Jackson Stephens was a campaign chair for H.W. Bush in 1988.10 Most interestingly, the firm was instrumental in bringing the infamous CIA-front bank BCCI to the United States in 1981 with the help of Hillary Clinton’s Rose Law Firm in Little Rock.11 Another company owned by Stephens, Systematics Inc., was also involved with modifying and selling the infamous PROMIS software, used by American and Israeli intelligence to spy on its adversaries. Systematics even had an Israeli subsidiary that employed members of Mossad to carry out this work.12

Smith and his company plunged deeper into debt but in 1972, they got exactly what they needed and the CAB changed their rules in FedEx’s favor. Riding this wave of success, Smith tried to secure another loan, this time from Commercial Credit Corporation (CCC), but to do that, he would need his newly divorced sister Fredette to sign away all her shares as collateral. Fredette had always been willing to help her brother, but she also knew she needed some money to sustain herself, especially in the middle of an expensive and drawn out divorce with her husband Bryan Eagle. Instead of looking elsewhere for collateral, Fred tricked his sister into signing a document while she was in the middle of preparations for a large party at her home in McLean, VA. It wasn’t until she was able to read the fine print two weeks later that she discovered her mistake.13

Smith and CCC had been acquainted since his time in Vietnam, when he and his stepfather purchased Arkansas Aviation and were settling its debt burden with the corporation.14 At the time, CCC was a subsidiary of Control Data Corporation, a major defense contractor and supercomputer company. Control Data built supercomputers for the US nuclear program at both Sandia National Laboratory and Oak Ridge National Laboratory. Interestingly, Control Data also sold computers to the Soviet nuclear program in 1972, which resulted in a Congressional investigation. Control Data eventually sold CCC to Sandy Weill (previously of Bear Stearns) who turned it into Citigroup with the help of his young mentee Jamie Dimon.15

From Whitney Webb’s article, The Rise of Jamie Dimon:

In 1968, Control Data Corp. acquired the Commercial Credit Corporation (CCC) to “help its computer customers finance leases of company hardware and stabilize erratic earnings” that then characterized much of the early computer industry. A few years after the acquisition, both CDC and CCC would find themselves intertwined with the “private CIA” network developed mainly by Ted Shackley, the Agency’s infamous “Blond Ghost,” in the late 1970s and which later allied itself with George H.W. Bush. This is highly significant as this particular network was intimately involved with the illicit transfers of both weapons and technology, including during the Iran-Contra scandal, the related PROMIS scandal, and the subsequent “Chinagate” scandal of the mid-1990s…

CCC, for its part, also had odd connections to the networks around Shackley. For instance, one of the key components of this “private CIA” was a company created by Shackley and another CIA operative and long-time associate of Shackley’s named Thomas Clines. That company was known as the Egyptian-American Air Transport and Services Corporation, or EATSCO. It seems that EATSCO functioned as a middleman in arms sales made by the Pentagon to Egypt and, later, other countries.16

Around the same time that CCC issued its loan to FedEx, it was also issuing a loan to Farhad Azima’s Global International Airways. Azima, an Iranian national who was connected to the Shah’s intelligence apparatus (SAVAK) before the Islamic Revolution in 1979, was also involved with Ted Shackley’s “private CIA,” and James Cunningham, a veteran of the CIA’s Air America in Laos. Azima and his airline were later involved in running guns for the CIA during Iran-Contra and the breakup of Yugoslavia.17

In the early days of FedEx, two of Smith’s first employees were his secretary, Charlotte Curtis,18 and pilot George P. Eremea, both of whom he had poached from Arkansas Governor Winthrop Rockefeller. Instead of sending his pilots to flight school, he started his own and somehow got the VA to pay for it because all of his pilots were former military. Their first charter was for IBM, who needed four airplanes just to move one of their computers.19 FedEx also won a few contracts for six midwest routes from the USPS and even some business from Ford and General Motors.20 After the first year of incorporation, the company operated at a loss of almost a million dollars, and Fred Smith had gotten himself, his family, and his company over $20 million in debt.

This did not stymie Smith’s efforts in the slightest. In order to get his planes modified faster, Smith ended up buying Little Rock Airmotive from Jackson Stephens for more than three times what it was worth.21 Another problem that needed to be solved was the fact that Adams Field in Little Rock lacked much of the necessary infrastructure that FedEx needed, including a second runway and a facility to sort packages. They found their solution a hundred miles east in Fred Smith’s hometown of Memphis. Around this time, Smith hired Michael Basch, Mike Fitzgerald, and many others from UPS. Supplementing the hub and spoke system, FedEx borrowed much of their strategy from the United Parcel Service, including “price schedules, the report forms and even the selling techniques.”22

FedEx’s financial troubles got even worse when White, Weld, & Co. sent a letter demanding Smith contribute $1.5 million more of his own money or they were going to pull out as investors, a blow to the company that it probably wouldn’t survive. At the same time, FedEx representatives in New York were fighting to keep their option on the twenty-three PanAm falcons despite falling behind on their payments for those as well. Smith was left with no choice except to borrow more money. He couldn’t borrow anymore money from Worthen Bank, since he owed them half a million, so he went to Union National Bank in Little Rock and convinced them to loan him $2 million, which covered all of the debts he owed, at least in that moment. The problem was that in order to get the loan from Union National, he decided to forge the content and signatures of a board meeting of the Fred Smith Enterprise Co., with the help of one of his secretaries. This meant that the collateral promised to Union National was fraudulent, and Smith was breaking several federal banking laws in the process. This $2 million dollars didn’t even last very long and Smith needed more money quickly. He pulled the same forgery stunt again, this time with First National Bank in Memphis. Shortly thereafter, Fred Smith decided it was time to formally launch Federal Express as an overnight service. In an attempt to persuade Charles L. Lea, Jr., executive vice president of New Court Securities Corporation, Smith invited him to Memphis to see FedEx in action. Charles Lea and New Court were no run of the mill investors, however.

The international banking dynasty of Baron Rothschild of Paris was behind New Court. Lea’s firm, an offshoot of Amsterdam Overseas Corporation, had been formed in 1967 principally to handle the Rothschild family’s American investments. With the baron’s approval, Lea was looking to risk part of the $100 million he managed in a promising venture.23

Lea was initially skeptical and declined to invest in the fledgling operation but later changed his mind when Colonel Henry Crown, head of General Dynamics got involved. Colonel Crown was keen on FedEx’s business model and was willing to use General Dynamics to loan the company a little over $30 million. Colonel Crown also helped convince Prudential insurance to chip in $5 million of their own money.

Despite the new investments and attention, FedEx still struggled to pay its bills. The company fell behind on payments for rent, fuel, and couriers. The situation reached a boiling point when an unpaid courier held a station manager at gunpoint, demanding payment. “If I don’t get my money right now, I’m going to blow this sucker’s head off, and shit in the hole!”24 Safe to say, he got paid quickly. Another group of investors convened, this time including Allstate Insurance, the First National Bank of Chicago (led by A. Robert Abboud), and Chase Manhattan. This deal almost fell apart because of the October 1973 oil crisis but was salvaged by Abboud. This rollercoaster of fortune turned out to be too much for Colonel Crown and General Dynamics and they decided to pull out completely in the first quarter of 1974.25 Under pressure from investors (primarily Charles Lea), Smith was replaced as CEO by General Howell “Howling” Estes Jr., the Air Force’s youngest four-star general, although Smith retained his position of president of the company. This hire was more for show than anything. Even Charles Lea referred to Estes as a “store-front dummy” for the purpose of courting more investors.26 The company kept growing, although never quite becoming profitable, yet some felt they were getting close. Art Bass ended up flying to France to make a direct appeal to Baron Rothschild, who conceded $9 million more after some convincing.

Union National Bank eventually learned of the fraudulent documents and began working with the FBI and U.S. District Attorney W.H. “Sonny” Dillahunty to indict Fred Smith for bank fraud. A Grand Jury was convened and several witnesses were called to testify. The same day he was indicted, Fred Smith hit and killed a pedestrian with his car in Memphis. Instead of stopping and getting out to help the man, Smith sped off, fleeing the scene. A police officer that observed the incident was eventually able to pull him over. The victim, George Clifton Sturghill, a fifty-four-year-old black handyman, died in the emergency room.27 The story was mostly covered up in the media, with only a paragraph tacked onto the end of an article about Smith’s fraud indictment, several days after the fact. Sturghill’s own family wasn’t even made aware of the fact that he was killed by a car, let alone who was behind the wheel, until well after his death. Smith brushed the incident off in the next meeting at work and blamed his “ignorance” of the accident on a loud and “rowdy negro bar” he had passed. Smith went to federal trial but was acquitted, and his car accident case in Memphis was dismissed less than a month later.

Smith returned to Washington in 1976 to lobby Congress some more, this time advocating for mass deregulation of the airline industry. This time, he wasn’t alone. According to a report from SRI International, “After failing to sway Congress in 1976, FedEx organized other freight carriers and commuter airlines; together they presented a strong case to Congress and the Administration, revealing the costs of regulation and benefits of deregulation.”28 Following a signature by President Jimmy Carter, the Air Cargo Deregulation Act of 1978 and the Airline Deregulation Act of 1978 were the largest, most sweeping pieces of legislation affecting airlines since the Civil Aeronautics Act of 1938.

Until 1978, the U.S. government, through the Civil Aeronautics Board (CAB), regulated many areas of commercial aviation such as fares, routes, and schedules. The Airline Deregulation Act of 1978, however, removed many of these controls, thus changing the face of civil aviation in the United States. After deregulation, unfettered free competition ushered in a new era in passenger air travel. The CAB had three main functions: to award routes to airlines, to limit the entry of air carriers into new markets, and to regulate fares for passengers.…There was stiff opposition to the bill—from the major airlines who feared free competition, from labor unions who feared nonunion employees, and from safety advocates who feared that safety would be sacrificed….In general, freed from the rules of the CAB, regional and major airlines inaugurated new routes in droves….Unfortunately for the airline industry, fuel costs, economic recession, and wanton over-expansion in the wake of deregulation began to have serious negative consequences.29

The deregulation didn’t even end there. Over the next two decades, the Federal government would go on to deregulate the trucking industry, energy and utilities, telecommunications, rail, maritime shipping, the financial sector, you name it! It all started here.Smith returned to Washington in 1976 to lobby Congress some more, this time advocating for mass deregulation of the airline industry. In 1977, Smith once again got what he needed and the CAB rules changed to allow FedEx to use whatever planes they wanted. FedEx upgraded from their Falcon-only fleet to include the much larger DC-9 and eventually Boeing 727s.

With Flying Colors

In December 1977, Fred divorced his wife and married his secretary Diane. The business had now become very successful and paid off all their deficient loans. FedEx successfully went public on April 12, 1978.30 By 1983, FedEx was a billion dollar company. Despite inheriting much of his wealth, Fred Smith, like his father, was never really accepted into the old money circles of Memphis’ elite. This newfound wealth had Smith butting up against the local moneyed establishment, and he did not mince words when speaking to the media.

The “landed gentry” came in for most of his assaults. He was singling out the city’s business elite, for the most part executives from old-line pre-Civil War aristocracy, whom he accused of clinging to “the plantation mentality.” In a number of speeches he hammered this group as “insular, extremely conservative, and exclusionary. . . . They claim to be broad-minded, but they are not.” Smith criticized Memphis for having a “police problem.” Roger Frock recalled: “I think he thought the police were picking on the black employees we had, because they were stopping them when they were driving home from the hub. Saying what business did minorities have being out at that time of night. I know he was riled up about that for a while.”31

In order to decrease his own tax burden, Smith successfully lobbied Washington, with the help of Congressman Henry Ford, to change the capital gains tax from 49 to 26 percent. Despite advocating for more conservative tax policies that would benefit himself financially, Smith’s local politics became more nuanced. He opted to support W. Otis Higgs for Memphis mayor, who would’ve been the city’s first black mayor, had he won. This greatly upset the incumbent mayor Wyeth Chandler, who had helped FedEx get set up in Memphis in the first place. Chandler accused Smith of being a “zealot on civil rights.”32 Smith’s politics never quite reached the level of being “progressive,” let alone coherent. “We’ve [Federal Express] supported various candidates. I would say I’m much more independent than anything else. I believe more in betting on the man.”33 Smith continued “attacking the influx of ‘parochial, very doctrinaire’ rural whites; the blacks who mistakenly saw ‘each and every issue as a civil rights battle’; and the patricians, the ‘landed gentry,’” which didn’t earn him many friends, but at that point he didn’t need them. Business was booming and he was on top of the world.

While Smith was no stranger to politics, having spent so much of his time lobbying in Washington for airline deregulation or lowering his tax burden, but Smith formally entered the political realm in 1979 when he became national finance chairman for TN Sen. Howard Baker’s Presidential campaign. He held this job for only four months before he decided that he either wasn’t very good at it or that it wasn’t worth his time.

In January 1981, construction was completed on the new “superhub” at Memphis International. This new facility allowed FedEx to sort up to 750,000 packages a night all under one roof. FedEx also spent $300,000 to install weather sensors at Memphis airport, a technology that had only previously been used at military ammunition depots.

Any time news leaked that Smith was considering moving the Memphis hub elsewhere, all hell would break loose. At one point, Smith considered building a company town at an abandoned military airfield in Illinois. The explosive reaction to this news in Memphis inspired Smith to threaten a move any time city officials weren’t acting quickly enough to approve the things he or FedEx needed.

In 1983, the first book about FedEx was published. Absolutely Positively Overnight!, was written by University of Memphis economics professor and Stanford Research Institute alumnus Robert A. Sigafoos. Sigafoos was given full access to FedEx’s archive of documents, as well as interviews with executives, but the finished product infuriated Smith, so much so that, according to Sigafoos, “after my book came out, there was a time or two when I went home late at night that I’d look up and down the alley. Because he was pretty sore at me.”34 Sigafoos chalked some of Smith’s frustrations up to his political aspirations at the time, and figured that this book at least appeared to be airing Smith’s dirty laundry. Sigafoos actually had a favorable view of Smith and said he was deserving of accolades for his success.

Despite FedEx’s rapid growth and success, Smith was terrified of potential challenges that threatened the company. Smith wanted to maintain the esprit de corps among employees and executives that existed in the early days. Smith did this by focusing on promoting from within and almost guaranteeing that there would never be layoffs. What Smith was really trying to avoid was a union. Even in the early days of FedEx, employees attempted to unionize several times, each time unsuccessfully. The first of these attempts was supported by the United Pilots Association. The second attempt was in 1974 with the help of the Teamsters, who had represented UPS employees since the 1930s. The constant threat of unionization forced FedEx to share some of its wealth with its employees and has created a corporate environment with a “no furlough policy.” After a spate of conflict and unrest in the 1980s, employees were given the ability to communicate concerns to upper management through a grievance policy. Other ways that Smith tried to keep his employees happy included, “dinner for two” vouchers and “Bravo Zulu” stickers, a Navy flag tradition that Smith carried over for employees that went above and beyond. By 1984, FedEx was bringing in $1.72 billion a year, far surpassing its competitors UPS and others, who weren’t even close to breaking a billion.

Smith’s penchant for exploring new ideas in business extended to the structure of the organization itself. At one point, Smith brought in Charles Kepner, a former RAND Corp. employee, to conduct some “strategic planning.” After meeting with several consultants, Smith explored decentralizing the company, which ultimately didn’t work. Smith rented 6,000 ft of office space and created his own RANDian think tank, the Advanced Projects and Research Group (APRG), nicknamed the “turkey farm.” The office had a mainline connection into the FedEx computer system. APRG explored the use of unconventional vehicles like the newly released supersonic Concorde as well as using dirigibles for heavy freight. Neither of these ideas panned out, but APRG did end up doing work that was useful to more than just the FedEx boardroom. APRG tested a “magic window” prototype developed by California’s Flight Dynamics Corp. by installing them on a few of their 727s. This “magic window” was essentially a heads-up display (HUD) that allowed pilots to see through foggy conditions and land the plane safely. Their research eventually included adding infrared technology to the concept and was even (allegedly) sold to the US government for military applications. Another technology tested by APRG was Autoland, which could land a plane (usually in less than favorable conditions) with only the supervision of a pilot. Other ideas that were considered but ultimately didn’t pan out included a Ultra High Frequency television station for business news and information, as well as building booster rockets for Space Transportation Company to launch global communication satellites.

In the late 70s and early 80s, Smith found himself on a couple enigmatic international trips. The first of these was with his old friend and lawyer, Lucius Burch, who took Smith along with him to Rhodesia, which was on the verge of collapse at the time. According to Burch,

“I had this money from selling my lodge in Ireland. It was like finding it in the road. I hadn’t done a day’s work to get it. So I was looking for a place to put that money at great risk, and if it hit I’d really have something big out of it. It looked like Rhodesia was such a place. War was going on, and it began to look like Bishop Abel Muzorewa was going to come out as head guy in the government. And I knew about Muzorewa. He was born in 1925 into the Manyika tribe, eldest of nine siblings, and aspired early to the clergy. Muzorewa was sponsored by the Methodist church and came to the United States. I knew about him from Nashville because he attended Scarritt College there, and got a master’s degree. So Fred and I went over to Rhodesia. And Fred liked to go out with the government patrols at night. Just for the fun of it. It wasn’t attractive to me; it was bad enough as it was. The guerrillas would come around shooting at the houses, putting mines in the goddamn roads, and everything. But Fred enjoyed that. He’d go out with the soldiers on what they called “sticks”’—four- or five-man patrols. He stayed in Rhodesia as long as he could. But he had a baby on the way, and he had to go home. I remained over there a month or more. The sort of life he led in Vietnam, I think, was something that was congenial to his nature.35

Burch continued on, now talking about another enigmatic trip Smith would take in the early 80s, with some context from Vance Trimble,

“Fred did the same thing later over in Israel, when they had the fighting in Lebanon. The last big one they had. He went over there to go around with the Israeli guys, flying some, I think, watching the operations.” Indeed, Smith surfaced in west Beirut in the middle of fierce hostilities on his thirty-eighth birthday, August 11, 1982. This adventure had a prosaic origin years earlier. The FedEx chairman was given an award at a dinner in Memphis by the international Jewish fraternity B’nai B’rith in the spring of 1979. Smith told the dinner chairman, Ira Lipman, head of a Memphis security firm, that he wanted to visit Israel. Lipman offered to take him. “He didn’t get around to it then,” said Lipman in an interview for this book, “what with having all those children. But we finally settled on 1982. We left Memphis on August 9, just after Israel invaded Beirut—the war was going on. We didn’t tell our wives we were going into the battle zone until later.” Smith and Lipman were flown by the Israeli army to west Beirut and spent several hours in a bunker during an artillery and bomb barrage.36

Sigafoos, in his book, refers to the Israel foray as a “business trip.” “His close advisors at Federal Express were convinced Smith went there to get the smell of battle so he could inspire his staff for the upcoming air battle with UPS.”37 Around this time, Smith was also apparently toying with the idea of becoming Secretary of Defense.

In a 1982 feature article on his life, the [Memphis] newspaper [the Commercial Appeal] observed: Smith talks about the “natural camaraderie” that developed among members of frontline outfits [in Vietnam]. “It is a small, enclosed fraternity. There were only four hundred thousand who saw any real conflict. The rest of the country did their own thing. There is a real bond there.” He keeps in contact with a number of his war buddies. Some are in a variety of occupations; others have risen quite high in the military service. From time to time there have been whispers about the company and its security-cleared executives cooperating with the nation’s intelligence community. The company’s research into the potential “magic window” system of electronic vision, for example, has obvious benefit to the military. Federal Express does a huge volume of time-sensitive shipping for the Defense Department. . . . As for Smith, he smiles a Cheshire grin when asked about the Central Intelligence Agency making use of Federal Express, saying, “Even if it were true, I couldn’t talk about it.”38

While Smith obviously never became the head of war for the United States, he did get very close. Incredibly, he was George W. Bush’s first choice for Secretary of Defense over Donald Rumsfeld, but Smith declined the job. When Rumsfeld resigned in 2007, Bush offered him the position again but he refused, with the reason given that he needed to spend more time with his terminally ill daughter.

The emergence of Fred Smith, of his company, of the corporate culture which Smith has created should suggest a series of questions which need answers. Who is Fred Smith? What kind of background created his drive? Is this successful Southerner a one-of-a-kind entrepreneur who has emerged from a region of the country not generally known as a spawning ground for founders of large nationwide corporations? Or is he simply a new version of an old breed? Is Federal Express really the forerunner of a new generation of company? Or is it the same old “Dark Satanic Mill” William Blake identified at the beginning of the Industrial Revolution, albeit now dressed in high-tech finery? Who is this dynamic young business leader who conceptualizes his company as an heir to military strategist Von Clauswitz and the Marine Corps? Is he the prototype for a new generation of American business man? Or is he the rich kid, born to the purple, as the saying goes, managing an electronic plantation where cotton — now transformed into Courier-Paks, Priority 1 packages, and Overnight Letters — is still king?
(From Robert A. Sigafoos book, Absolutely, Positively Overnight!)

Anyone who has ever lived in Memphis will tell you that FedEx looms large over the city. The multinational conglomerate is Memphis’ largest employer, with more than 33,000 workers in the city itself and over half a million across the globe. The corporation has all but taken over Memphis International Airport, and their pilots make up a good portion of the local middle class. What they might also tell you is the famous story about how Fred Smith originally came up with the idea for FedEx as an undergraduate at Yale, only to be given a C on the paper by his professor. A few might also recount how Smith fled to Vegas and gambled the company’s last dollars to save it from bankruptcy. What they probably wouldn’t tell you, however, is how Smith was a member of a secret society at Yale, or about the multiple people he has killed over his alleged negligence, only to escape any responsibility or punishment. And they certainly wouldn’t describe him as a deep state actor or as someone who influences our government from the shadows.

In 1913, in the town of Marks, Mississippi, just south of Memphis, Walter Brownloe, a Black man, was imprisoned for the crime of attacking a white farmer’s wife. Before he could even be brought to trial, a mob entered the jail, took him to a barn and lynched him. At the time, opinion was divided on Brownloe’s guilt. This extrajudicial lynching was so heinous that, later that very day, the town of Marks gathered to vote to condemn the awful act.1 The following year, Brownloe’s widow was raped but the perpetrator was acquitted.2 This kind of racial violence was all too common at the time in Mississippi and unfortunately never really ceased. The state has always been an epicenter of racism in America. The University of Mississippi’s mascot was an old plantation owner until just a few years ago. Their football team is still known as the “Rebels,” harkening back to the treasonous confederacy. To this day, Mississippi is one of the poorest states in America, with its Black population disproportionately so.

It was in this same town that, 55 years after the lynching of Walter Brownloe, Martin Luther King Jr. chose to start his Poor People’s Campaign. In a visit to the town in March 1968, King saw poor black children starving and walking barefoot in the streets. This, he decided, is where he wanted to start his next march to Washington. It’s not clear if King was aware of the murderous history of the town when he made this decision. Less than a month after the visit, King was shot dead at the Lorraine Motel in Memphis. The Poor People’s Campaign began a month later without him in Marks and would continue all the way to Washington, DC, culminating in a protest camp on the mall that lasted for six weeks.3 It comes as no surprise, then, that this state and this town of Marks would produce a scion of the confederacy that would go on to become one of America’s spookiest business magnates, and a pillar of the white supremacist secret government.

Much of my research draws from journalist Vance Trimble’s book Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator. The book’s intentions are not readily apparent – it vacillates between fluff piece and hit piece, with the hits not landing quite as hard as one would hope, at least in hindsight. It is, however, the most thorough book about Fred Smith I’ve come across. Trimble sourced much of his information from archives and in-person interviews with people from various parts of Fred’s life and Fred Smith himself. For those reasons and because of the nature of the details themselves, I have no reason to doubt the details I’ve included here, although one can only imagine how much has been omitted. The book does recall many details of Fred’s life that go unmentioned elsewhere. I would like to highlight those details here, given new understandings of the CIA and its role in drug trafficking and other multinational criminal enterprises. Limited hangout or not, Overnight Success gives us an incomparable look into the life of Fred Smith and his family.

Another book that I’ve sourced from is the original book about FedEx- Absolutely, Positively Overnight! by University of Memphis economics professor Robert Sigafoos. The professor offers a surprisingly and refreshingly grounded look at the economic forces behind FedEx’s success. Fred Smith gave Sigafoos unfettered access to the company’s archives and employees.

Like so many “self-made billionaires,” Fred inherited a vast estate from his father, James Frederick Smith. The son of a steamboat captain, James started his career working for Clarence Saunders, founder and pioneer of America’s first self-service grocery store, Piggly Wiggly.4 During WWI, James was recruited into the military and worked as a truck procurement inspector. Following the war, James hired two lawyers in Memphis who were a part of the corrupt Crump political machine. Boss E. H. Crump controlled the government and politics of the city of Memphis from the 1910s up until his death in 1954, very much in the style of Boss Tweed and Tammany Hall in New York. While Crump initially came to power with the support of Memphis’s Black population (by paying for their poll taxes and improving some of the city’s basic services), he ultimately solidified Jim Crow as the city’s modus operandi towards Memphis’ Black population, as was the case in most of the southern US at the time, and oversaw the incorporation of the Ku Klux Klan into the Memphis Police Department. According to Professor Michael K. Honey, author of the book Going Down Jericho Road, “Crump put Ku Klux Klan leader Cliff Davis in charge of the police and then made him a congressman for thirteen terms. …white police officers, many of them straight from the plantation districts, functioned like Klansmen in blue uniforms, brutalizing and insulting African Americans and union organizers with support from white judges, FBI officials, and federal attorneys.”5

“Crump was first elected Memphis mayor in 1908; thereafter, he built his political machine by collecting money from illegal gambling dens, houses of prostitution, and, during Prohibition, from illegal liquor joints. Crump’s ward and precinct heelers used these funds to pay for people’s poll taxes and for city employees to get people out to vote for his candidates. Under Crump, “The colored people, they voted plenty,” recalled Republican black political activist George W. Lee. In fact, he said, “People’d vote four and five times,” and they voted just the way Crump wanted them to. Crump modernized city services while entrenching segregation, and his control over the most populated city in Tennessee increasingly gave him power over state and national elections and the Democratic Party.”6

Crump went on to make millions for himself in real estate, banking, insurance, and investments. Crump made it clear that his administration would be as hostile to unions as possible. Of course, this anti-union sentiment disproportionately affected black workers. Many white union workers, mostly from the American Federation of Labor (AFL), actually benefited from Crump’s Jim Crow policies and they even participated in the beating and killing of black workers to solidify their position within the Crump regime. “In 1919, 650 white railroad workers from Memphis led a five-day wildcat strike in an attempt to eliminate blacks from the industry. AFL unions routinely excluded blacks from skilled work, even in federally funded construction jobs during the New Deal.”7 When the mostly black-led Congress of Industrial Organizations (CIO) began organizing in Memphis, tensions boiled over. “Whites beat and nearly killed Thomas Watkins, a black longshoreman who led a strike of black and white Mississippi River workers in 1939, as Crump denounced the CIO as ‘nigger unionism’ and ‘Communism.’”8

Several years earlier in 1925, James was able to use his connections within the Crump machine to pass a state law making intercity bus lines a public utility. Conveniently, James was also in the meetings where these new bus lines were being planned and was able to secure contracts for himself to run the buses. The first of these bus routes was the “Governor’s Special,” a daily 450 mile round trip bus between Memphis and Nashville, the state’s capital, which also won James many favors with Governor Henry H. Horton. This business grew to dominate bus travel in the Mid-South. 9James built his own $100,000 plant to manufacture buses, and his wealth grew to $17 million at its peak.

After building his bus empire, James started another successful business, a chain of diners called The Toddle House. By the 1950s, Toddle House had exploded in popularity, with more than 200 locations in 90 cities across the country. The Toddle House business model was used by one of their former employees, Joe Rogers, to start Waffle House, one of the most successful diner chains in American history.10 Not all of James’ endeavors were successful, though. One idea that ultimately didn’t pan out was Golden Eagle airlines, an airline that would have operated short-haul flights between Memphis and Nashville. While this airline didn’t come to fruition, James’ attempt does anticipate his son’s future business ventures into aerospace.

Having divorced his first wife, James remarried to a woman named Charlotte Clark. A blood disorder had apparently left him sterile, so James and his wife adopted their first daughter Laura Ann Smith from the Tennessee Children’s Home Society, a criminal baby stealing operation disguised as a legitimate adoption service and orphanage, run by the infamous Georgia Tann.11 For decades, Tann and her associates would steal babies from poor mothers, sometimes within minutes of their birth. The operation was facilitated by Judge Camille Kelly, who approved the necessary paperwork for the adoptions. Tann trafficked children to high profile customers such as Joan Crawford, Albert Steele, June Allyson, Dick Powell, and NY Governor Herbert Lehman, among others. Famous wrestler Ric Flair was one of thousands of children trafficked to their new parents by Tann. Both Tann and Kelly were deeply enmeshed in Crump’s machine, which is the primary reason their operation was able to continue unabated until Tann’s death in 1950. Sources claim that James was unaware of these crimes when he adopted his daughter, but the fact that he was already connected to the Crump machine, as well as the fact that he donated $15,000 to the Society for a new building and even served on its board, raises questions about the true nature of his involvement.12 James was, unsurprisingly, not the most standup guy. Charlotte confessed that he hit her at least once, and he often philandered with other women, including the daughter of Tennessee Congressman (and Crump machine lawyer) Walter Chandler.13

His profits – and his morals – culminated in the decision to purchase two plantations in Mississippi, cementing his status as a true son of the confederacy. The plantations did not sit empty. James employed several hundred poor Black workers who lived and worked on the plantation amidst deplorable conditions. There was no running water, electricity, or bathrooms. This was a plantation in the truest sense, except it was almost a century after emancipation. Smith claimed to have built new facilities for his workers after he purchased the plantations, but these too fell into disrepair, and it was all too little, too late for his suffering laborers, whom he woke every morning at 4am to a loud air horn he had installed.14

Remarkably, Charlotte was able to get pregnant and had their first non-adopted child, Fredette Smith, but this good fortune wouldn’t last long for Charlotte. James was caught up in a Federal investigation for not paying his taxes and convinced her to divorce him so he could square up their finances. Charlotte did as she was told, willing to do anything for her husband and children,15 but after the divorce, James left her with nothing and moved on to marry his next wife Dorothy Dickman just three days later. Trimble writes:

In her rage, Charlotte Smith went to their home on East Parkway to collect her thoughts. She intended to stay there until she could find a suitable apartment in Memphis. She collected so much that when she signed a lease at the Parkview Apartments, she needed a moving van. When her ex-husband came back he discovered she had taken "without his knowledge or consent" furniture, rugs, ornaments, paintings, and a grand piano, all valued at $2,500. Fred Smith took her to court. "They belong to me," said Charlotte Smith. On May 23, 1940, the Chancery Court decided otherwise and let him send sheriff's deputies to bring it all back. Charlotte felt powerless – and bitter. "Memphis is full of in-trigue," she said. "Charleston, South Carolina, is the same way. If you belong to a certain clique, you can murder your own mother and nobody cares or will do anything about it. If you're not in that circle, you are in deep trouble."16

The marriage to Dorothy didn’t last long either, and they divorced a little over a year after their wedding. During WWII, James worked a “desk job” in Washington, despite also being commissioned as a lieutenant commander of the Eighth Naval District in New Orleans by Secretary of the Navy Frank Knox.17 After resigning whatever commission this was, James returned to Memphis and married Sally Wallace West, a widow with two sons of her own. In 1944, they had their first child together, little Freddie Smith.

It was also in the mid-1940’s that James’ Dixie Greyhound bus drivers went on strike. Unsurprisingly, he did not immediately cede to their demands for higher pay and shorter work weeks and instead hired replacement drivers. Negotiations did not end there, however; at one point, the replacement scab drivers found themselves being shot at on the highway. One of the managers received a death threat shortly after. Within days, a new contract was signed with the union, granting drivers higher pay and shorter hours.

A few years later, James would die after having complications from a heart attack. His crimes did not cease with his death, however. Despite his total assets being worth roughly $22 million, his bankers and lawyers handling the will were able to convince the IRS of an appraisal of a little more than $700,000. His half-finished yacht, the Lysander, a former Navy patrol gunboat, was almost sold to King Paul of Greece. However, after an uproar within the State Department, who objected to the lavish purchase since the United States was currently funding much of the postwar reconstruction of Greece, the boat was sold to Smith’s Toddle House business partner, J.C. Stedman, instead.18 The vast majority of his assets were held in the Frederick Smith Enterprise Company, which was, unsurprisingly, incorporated in Delaware. Forty percent went to young Fred, with the rest split between his two half sisters.

Fred Smith’s Early Life

Having lost his own father at the age of four, Fred's childhood was shaped by various military personnel who served as surrogate fathers for him -- figures who were deeply enmeshed in imperialist projects. Early on, Fred spent time at Fort McClellan, Alabama (not far from Huntsville), with Fred’s uncle (Sally’s brother), Major General Sam T. Wallace in the Tennessee Guard Encampment around 1952. At this time, Ft. McClellan was being used as a training ground for various states’ National Guard regiments. Interestingly, it was also where the US military’s Chemical Corps conducted their chemical warfare training. As part of Operation Top Hat, unwitting soldiers at Ft. McClellan were subjected to radioactive material, vesicants, phosgene, and nerve agents such as napalm and agent orange. This was very much a predecessor of the experiments conducted at Edgewood Arsenal outside of Baltimore after the Chemical Corps relocated there in 1973.19 Veterans who trained at Ft. McClellan have started to suffer serious health effects as a result of their time spent on the base. Some members of Congress have been pushing forward a bill that would create a registry of veterans impacted by the chemicals they were exposed to at Fort McClellan,20 although this effort has been unsuccessful due to pushback from the Department of Defense.21 We know that Nazi Paperclip scientists were working on mind control experiments at Edgewood.22 Were they also at Fort McClellan? Wernher Von Braun was working closeby in Huntsville, AL at Redstone Arsenal and according to the military, there are 26 German and 3 Italian “POWs” buried at Ft. McClellan.23

Fred’s mother elaborates on the role her brother had in her son’s life and her own influence over his worldview. From Trimble:

"My brother was in the National Guard forty years, and Freddie's interest in the military came from our family background. That goes back a long way—Wade Hampton, the Confederate general over in South Carolina, was a relative of ours," said Sally Smith.

His mother encouraged him to read the history of the War Between the States, saw to it that he acquired a large collection of toy soldiers with which he could reenact the famous battles between the North and South, and took him several times to the Shiloh battlefield on the Tennessee River. As a boy he considered a military career via West Point.24

A friend of Sam Wallace, Colonel Fred Hook, a Memphis air force officer and Pentagon liaison to the Air National Guard, encouraged young Fred to follow his dream of becoming a pilot. Fred’s mother would go on to marry Col. Hook in 1965. A seasoned pilot himself, Col. Hook’s resume included barnstormer, crop duster, pilot for Chicago and Southern airlines, and most interestingly as a Flying Tiger in China serving under General Claire Chennault.

As an air force officer in the Pentagon, Hook was sent to Cuba as an American military attaché, became friendly with President Batista, and got involved in the 1959 Castro revolution. For his efforts to save a Cuban officer from the firing squad, he gained Castro's hatred. Dictator Fidel reportedly ordered him assassinated, but Hook, his wife, Jewel, whom he married right out of high school, and his daughter, Linda, who was born in Havana, safely escaped.25

Fred Smith wasted no time starting his own business endeavors in high school. While he was a student at Memphis University School, he had already learned to fly crop dusters by the age of 15. With the help of some of his friends, he also started Ardent Records, a music label and recording studio. Even though Fred quit the label before graduating high school, Ardent would go on to become a significant label in Memphis under the direction of his friend, John Fry. Their studios were used by big names such as Led Zeppelin, Bob Dylan, James Taylor, ZZ Top, R.E.M., Stevie Ray Vaughan, Al Green, the Allman Brothers Band, B.B. King, the White Stripes, the Replacements, and Three 6 Mafia. Stax Records would also utilise their studio, sending over any overflow work they had. Roughly 1/5 of Stax’s artists recorded there, including Cat Power, M.I.A., and Big Star.26

Shortly after turning 18, Fred Smith gained another mentor, Lucius E. Burch Jr. Burch was a well-respected lawyer in Memphis who represented MLK in the Memphis sanitation strike case27 and was a staunch opponent of the Crump political machine.28 Burch invited the 18-year-old Smith to his lodge in Ireland where he was apparently hazed by the family. Smith and Burch would end up growing close, spending much of their time hiking, hunting, diving, and engaging in philosophical debates.29 I wonder if Burch, a liberal through and through, was trying to influence young Smith, who was clearly very intelligent but was also still holding onto his father’s dream of the confederacy. One of Fred’s peers, Jeanne Coors, recalled of their youth together, “Fred was very respected by his peers. Very interested in history. He collected and painted those little lead toy soldiers, and he would study great battles. He was particularly interested in Napoleon, and General Nathan Bedford Forrest…”30 Fred’s first experience with real-life politics would come just before he left for college and also at the hands of Democrats, flying around Bill Farris, the Memphis City Commissioner who was campaigning for Governor, and current Governor Browning, to campaign events across the state. Even though Farris would lose that election, he would go on to become a political kingmaker for Democratic politics in Tennessee. He is credited with bringing the 1978 Democratic National Convention to Memphis.31 Bill Farris was also, probably unsurprisingly, a member of the Al Chymia Shriners Temple and the Park Avenue Masonic Lodge in Memphis.32

After high school, Smith went to Yale to study economics and political science. According to Vance Trimble, “Fred Smith arrived in the Yankee precincts of New Haven, Connecticut, somewhat sensitive about being a southern boy. He took along a Confederate flag, which he proudly hung on his dormitory wall… His ebullient Confederate panache won him important student friendships.”33 He joined the Marine Corps reserve as a freshman, which would require him to spend every summer at Quantico. At the end of the summer after his Freshman year, while he was home, he and a group of friends headed to Pickwick Lake, not far from Memphis, for a weekend. At some point, the car flipped and crashed, killing his passenger and friend, Mike Gadberry. Mike had previously told his father that “Fred drives too fast. I tell him to slow down,” so his father, Dr. Gadberry, had made sure to tell them before they left, “You all boys be real careful now and don’t get yourselves hurt.”34 The scene was gruesome, and Fred reportedly seemed in shock. Fred claimed someone turned in front of him, causing him to crash. His story became more elaborate once he made it to the hospital, telling his mother, "that he had just a split second to decide-either to hit a car full of children that was making a big ole country left turn in front of him, or leave the road.”35 No criminal charges were ever filed in the case.

Dr. Gadberry filed a damage suit in McNairy County, scene of the fatal wreck, and a settlement was reached without a trial. "I won't say how much I was paid," the physician said.

Even twenty-eight years later the Gadberrys felt bitter pangs. "I think that boy was going at least one hundred and ten miles an hour," said Mrs. Gadberry. "Mike's neck was broken; the driver didn't even get a scratch. Please don't try to talk to Dr. Gadberry anymore. Mike was his only son. Bringing this all up again is so painful. Last night he couldn't sleep at all."36

His second year at Yale, he started an aviation club and wrote the famous paper on a hub-and-spoke style package delivery service that would eventually become FedEx. Smith said he was inspired by the way telephones worked at the time, in which all calls are routed through a central switchboard. However, there may have been another influence from a technology that was even newer than telephones, as pointed out by Dr. Richard Corbin Porter, the Chair of the Yale Econ Dept. when Fred was a student.

By the mid-sixties computers were quite capable of handling linear programming. We now teach it to our students as kind of an archaic joke. Computers will do nonlinear programming now. But linear programming was much talked about in the late 1950s and up through the mid-1960s. One problem was known as "the traveling salesman problem." The traveling salesman problem required setting up a computer program that speedily solved the following: What is the route that takes the least number of miles for a salesman to travel to every state capital in the United States? And you can start 'em anywhere; obviously it doesn't matter where. So as to minimize, you don't go back and forth across the continent-from Washington to Maine, to California, and back to Georgia. This set up a whole lot of transport costs, minimizing problems that could be handled linearly. This whole airline hub business would have fallen in neatly. You could show that with a hub and with people going to the hub and then out again, you could somehow minimize the total cost in terms of flights and miles and so forth. A good student might well have picked that up and worked that out. Not something that a weak student would have done. The discovery that a hub system somehow reduced costs would have been something that you could have worked out in linear programming in the 1960s. I have no idea who first worked it out. But now with twenty-twenty hindsight, sure, put me back in the mid-1960s and I'll write you a nice paper about how hubs will be cheaper. Now it's easy. Always any discovery in economics, any uncovered theory, or whatever— everybody sees it afterward. "My God, why didn't I think of that!"37

It was also at Yale that Smith met and befriended both George W. Bush and John Kerry through their membership in the Skull & Bones secret society.38 Skull & Bones is a thread for another time but, briefly, the secret society at Yale was founded in 1832 by William Huntington Russell and Alphonso Taft. Alphonso was President Taft’s father but perhaps more importantly, Russell was from the same family that started Russell & Company, the largest American trading house of the mid-19th century in China. Russell & Company made their fortune in the illegal smuggling of opium into China,39 led primarily by Warren Delano jr, FDR’s grandfather, who brought the organization to the peak of its power.40 I mention this only because the theme of China and drug smuggling will become important later. To this day, the Russell Trust Association is the official name for the business end of the society. Besides the Tomb, their on campus meeting hall, the society also owns Deer Island on the St. Lawrence River, which it uses as a retreat for alumni.41

After enlisting in the Marines, Smith served two tours in Vietnam, where he enrolled in flight school and subsequently flew more than two hundred ground support missions. Smith served his first tour and left traumatized but felt compelled to return to Vietnam. Before he left for the second time, he spent time in California learning the Vietnamese language. During his second tour, Fred was hit by shrapnel twice, once in the eye and once in the back, but suffered no lasting consequences from either. In 1968, Smith was promoted to be an aide to the Division Commander by Major General Carl Albert Youngdale. Later that year, he was offered a “‘very interesting’ high-level G-2 (intelligence) job” but apparently opted instead to return to combat. He was then stationed at Marble Mountain Air Facility in Da Nang in the marine observation squadron.42 Throughout his service, Smith was awarded a Silver Star, a Bronze Star, two Purple Hearts, and was honorably discharged in 1969. He married Linda Grisham on June 7, 1969 in Honolulu.

Upon returning to the states, he got in contact with his sister Fredette, who had just moved to McLean, VA with her husband Bryan Eagle. Eagle had just gotten a job with the Central Intelligence Agency as an “electronics expert.”43 Eagle was more than just a brother-in-law to Fred, he was a close advisor and confidante in the days and weeks leading up to the inception of FedEx. As the husband of one of the inheritors, Eagle served on the board of the Fred Smith Enterprise Company, the holding company of Fred Sr.’s trust, which consisted mostly of $13 million of Squibb-Beechnut stock. Eagle later divorced Fredette but Fred and Bryan remained friends. Bryan was his nephew’s father and Fred would become a mentor to young Bryan Eagle III.

After his return to the States, Fred went to live in Little Rock where he and his stepfather, Col. Hook, invested into Arkansas Aviation Sales Co., a relatively small aviation outfit. The company operated out of Adams Field, a joint civil-military airport, now known as Bill and Hillary Clinton National Airport. A December 11, 1961 AP article in the Batesville Guard reported that Wernher von Braun, the Nazi Paperclip scientist who was now the head of NASA’s Marshall Space Flight Center in Huntsville, AL, exclusively flew planes from Arkansas Aviation to get around the country on official government business.44 The company’s success didn’t last long, however. Smith and Hook were both duped by the former owners into buying a failing company but Smith was able to turn it around by selling used airplane parts at a time when that market was growing rapidly. This business didn’t leave a good taste in his mouth, however, remarking, "I really didn't like this business. It was full of shady characters. I just didn't feel comfortable dealing with a lot of these people."45