PARIS, March 23, 2010 -- For centuries, picturesque Pont-Saint-Esprit was a charming little village in the south of France where not much would happen. Perched on the banks of the Rhone River, its villagers would go about their daily routine. The farmers would work in the fields while housewives would stroll around the traditional village market looking for local produce.

To some Americans, Pont-Saint-Esprit may be known as the birthplace of Michel Bouvier, a cabinetmaker, who was the great-grandfather of John Vernou Bouvier III, father of former U.S. first lady Jackie Kennedy Onassis.

But on the morning of Aug. 16, 1951, the tranquility of Pont Saint Esprit was dramatically disturbed. Madness invaded the town streets, as some of the inhabitants were struck by a mystery illness. Scenes of mass insanity and hallucinations followed for days.

"People were starting to hit each other, people were insulting one another, people were screaming. It was very serious," Paul Pages, who was 26 years old at the time, told ABC News. "There was a young guy who jumped out of a hospital window after screaming 'Look, I'm a dragonfly'. He broke both of his legs," Pages remembered. "The postman was also seen zigzagging on his bike. He eventually fell. He had lost his reason."

Seven people died and several dozen were sent to psychiatric hospitals. Hundreds of others were also affected to varying degrees by this mystery illness.

All the victims had one thing in common: they had eaten bread sold in the boulangerie of Roch Briand who was considered the best baker in the village.

Briand was blamed for using contaminated rye flour. According to investigators, the flour had been contaminated by a fungus that was almost identical to the synthetic version of the hallucinogenic drug LSD.

This theory was later disproved. Investigators also ruled out mercury as a possible cause of the insanity that hit the town. After many inquiries and court cases, the obscure case was never fully explained. Roch Briand was cleared of any wrongdoing, but the baker ended his life penniless and disgraced.

Claims of a CIA Experiment With LSD Still Haunts French Village

Today, 59 years after the event, an American journalist thinks he can shed some light on this strange episode in the life of this charming little village. In his book "A Terrible Mistake," Hank Albarelli claims it was the CIA which plunged Pont-Saint-Esprit into madness as the American agency secretly tested the effects of a hallucinogenic drug, possibly LSD, on its population.

The book, which came out in the U.S. three months ago, is a 12-year-long research by the author on the murder in 1953 of Frank Olson, an Army biochemist working on the CIA's secret Cold War mind-control experiments.

"When researching my book, I came across numerous references to Pont-Saint-Esprit. There were references in CIA documents and even White House documents. And after thorough research, I discovered that the village was the target of a CIA experiment and that it was also part of the motive as to why Frank Olson was murdered," Albarelli told ABC News.

"Olson wanted out, he wanted to sever his employment with the army and the CIA. And he started to open his mouth a bit too much. One of the experiments he talked about was Pont-Saint-Esprit and the fact that he had participated in the experiment," he said.

"The CIA was trying to use hallucinogenic drugs and LSD as an offensive weapon at that time. There had been reports written by the Army in 1949 specifically recommending the use of LSD and recommending that field experiments be engaged as quickly as possible," he said.

The Rockefeller Commission investigating the activities of the CIA and other intelligence agencies within the U.S. issued in June 1975 a report stating, "In the late 1940's, the CIA began to study the properties of certain behavior-influencing drugs (such as LSD) and how such drugs might be put to intelligence use. This interest was prompted by reports that the Soviet Union was experimenting with such drugs and by speculation that the confessions introduced during trials in the Soviet Union and other Soviet Bloc countries during the late 1940's might have been elicited by the use of drugs or hypnosis. Great concern over Soviet and North Korean techniques in 'brainwashing' continued to be manifested into the early 1950's."

According to Albarelli, the operation in Pont-Saint-Esprit was called Operation Span, "a vague allusion to 'bridge," he said. Pont in the French word for bridge.

The "Pain Maudit," or Cursed Bread Incident

One of the declassified documents obtained by Albarelli mentioned a dinner conversation in New York between an agent of the CIA and a scientist of the Swiss Sandoz lab. Sandoz was where Albert Hoffman, a chemist who discovered the effect of LSD in the 1940s, worked.

"The two page document said that after dinner, the scientist started talking about Pont-Saint-Esprit. He knew it was not the ergot (that was the cause of the illness). He knew the real secret of Pont-Saint-Esprit and that it was an experiment," Albarelli said.

"More troubling, immediately after the events in Pont-Saint-Esprit took place, the scientists that came to investigate the incident came from the Sandoz chemical company. They studied the situation for three or four weeks and they came up with the explanation that it was ergot poisoning, which would be later disproved. But what they did not tell anybody in 1951 was that the Sandoz chemical company was selling and providing the U.S. army and the CIA with LSD for its research purposes," Albarelli said.

Today, Pont-Saint-Esprit continues to be haunted by the apocalyptic scenes of that August 1951. Despite the latest revelations, the absolute truth about the "pain maudit," or cursed bread incident as it was called, may never be known for sure.

"The village elders like myself all agree to say that we will never know exactly what happened in August 1951 in Pont-Saint-Esprit. But it is disturbing if the CIA is involved," Paul Pages concluded.