The CIA/MI5 and the Labour Party Options

[John Simkin]

Richard Fletcher, How CIA Money Took the Teeth Out of Socialism:

Since the Second World War the American Government and its espionage branch, the Central Intelligence Agency, have worked systematically to ensure that the Socialist parties of the free world toe a line compatible with American interests...CIA money can be traced flowing through the Congress for Cultural Freedom to such magazines as Encounter which have given Labour politicians like Anthony Crosland, Denis Healy and the late Hugh Gaitskell a platform for their campaigns to move the Labour Party away from nationalisation and CND-style pacifism. Flows of personnel link this Labour Party pressure group with the unlikely figure of Prince Bernhard of the Netherlands, who has for 20 years sponsored the mysterious activities of the anti-Communist Bilderberg group launched with covert American funds.

There is no suggestion that these prominent Labour politicians have not acted in all innocence and with complete propriety. But it could be asked how such perspicacious men could fail to enquire about the source of the funds that have financed the organisations and magazines which have been so helpful to them for so long. Nevertheless, they are certainly proud of the crucial influence their activities had in the years following 1959 when they swung the British Labour Party away from its pledge to nationalisation, enshrined in the celebrated Clause IV, and back towards the commitment to NATO from which the Campaign for Nuclear Disarmament had deflected it. CIA operators take the credit for helping them in this decisive intervention which changed the course of modern British history.

The cloak and dagger operations of America's Central Intelligence Agency are only a small part of its total activities. Most of its 2000 million-dollar budget and 80,000 personnel are devoted to the systematic collection of information - minute personal details about tens of thousands of politicians and political organisations in every country in the world, including Britain. And this data, stored in the world's largest filing system at the CIA headquarters in Langley, Virginia, is used not only to aid Washington's policy-machine, but in active political intervention overseas - shaping the policies of political parties, making and unmaking their leaders, boosting one internal faction against another and often establishing rival breakaway parties when other tactics fail.

In fact the CIA carries out, at a more sophisticated level, exactly the same sort of organised subversion as Stalin's Comintern in its heyday. One of its targets in the years since the Second World War has been the British Labour Party.

The Labour Party emerged from the war with immense prestige. As the sole mass working-class party in Britain it had the support of a united trades union movement whose power had been greatly enhanced by the war, and it had just achieved an unprecedented electoral victory. The established social democratic parties of Europe had been destroyed by the dictators, while in America all that remained of the socialist movement was a handful of sects whose members were numbered in hundreds. Labour was undisputed head of Europe's social democratic family.

But as the euphoria wore off, old differences began to emerge with prolonged post-war austerity. The Left wanted more Socialism and an accommodation with the Russians, while the Right wanted the battle against Communism to take precedence over further reforms at home. And those who took this latter view organised themselves around the journal Socialist Commentary, formerly the organ of anti-Marxist Socialists who had fled to Britain from Hitler's Germany. The magazine was reorganised in the autumn of 1947 with Anthony Crosland, Allan Flanders and Rita Hinden who had worked closely with the émigrés as leading contributors. And Socialist Commentary became the mouthpiece of the Right wing of the Labour Party, campaigning against Left-wingers like Aneurin Bevan, whom they denounced as dangerous extremists. Crosland, who ended the war as a captain in the Parachute Regiment, had been President of the Oxford Union, and a year later, in 1947, became Fellow and lecturer in economics at Trinity College, Oxford. Flanders was a former TUC official who became an academic specialist in industrial relations and later joined the Prices and Incomes Board set up by the Wilson Government. Rita Hinden, a University of London academic from South Africa, was secretary of the Fabian Colonial Bureau - an autonomous section of the Fabian Society which she had set up and directed since the early Forties. In this position she exercised considerable influence with Labour Ministers and officials in the Colonial Office, maintaining close links with many overseas politicians.

The new Socialist Commentary immediately set out to alert the British Labour movement to the growing dangers of international Communism, notably in a piece entitled Cominformity, written by Flanders during a period spent in the United States studying the American trade union movement. The journal's American connections were further extended by its U.S. correspondent, William C. Gausmann, who was soon to enter the American Government Service, where he rose to take charge of US propaganda in North Vietnam, while support for the moderate stand taken by Crosland, Flanders and Hinden came from David C. Williams, the London Correspondent of the New Leader, an obscure New York weekly specialising in anti-Communism. Williams made it his business to join the British Labour Party and to take an active part in the Fabian Society.

This close American interest in Socialism on the other side of the Atlantic was nothing new. During the war the American trade unions had raised large sums to rescue European labour leaders from the Nazis, and this had brought them closely in touch with American military intelligence and, in particular, with the Office of Strategic Services (OSS), whose chief in Switzerland and Germany from 1942 to 1945 was Allen W. Dulles, later, of course, to become famous as head of the CIA in its heyday.

The principal union official in these secret commando operations had been Jay Lovestone, a remarkable operator who had switched from being the leader of the American Communist Party to working secretly for the US Government. And as the Allied armies advanced, Lovestone's men followed the soldiers as political commissars, trying to make sure that the liberated workers were provided with trade union and political leaders acceptable to Washington - many of these leaders being the émigrés of the Socialist Commentary group. In France, Germany, Italy and Austria the commissars provided lavish financial and material support for moderate Socialists who would draw the sting from Left-wing political movements, and the beneficiaries from this assistance survive in European politics to this day - though that is another story...

In 1953 the Congress for Cultural Freedom launched Encounter, an English language monthly which was an immediate success under the editorship of Irving Kristol, another of Levitas's New Leader protégés and an ex-Lovestoneite, and soon a bewildering range of publications in several languages had joined the CCF stable, with Encounter becoming one of the most influential journals of liberal opinion in the West.

As the CCF network grew it embraced many prominent figures in the British Labour Party -among them Anthony Crosland, who began attending CCF seminars, where he met Daniel Bell, who was at this period moving away from journalistic red-baiting in the New Leader towards academic respectability. Bell's thinking was later summarised in his book The End of Ideology, and it formed the basis of the new political thesis set out in the major work that Crosland was now writing and which was published in 1956 under the title The Future of Socialism. The book had also been influenced by the arguments put forward at the Conference of the Congress for Cultural Freedom held in the previous year in Milan, where principal participants had included Hugh Gaitskell, Denis Healey and Rita Hinden as well as Daniel Bell and a bevy of American and European politicians and academics.

Put at its simplest. Bell and his colleagues argued that growing affluence had radically transformed the working-class in Europe - and Britain - which was now virtually indistinguishable from the middle-class, and thus Marx's theory of class struggle was no longer relevant. Future political progress, they thought, would involve the gradual reform of capitalism and the spread of equality and social welfare as a consequence of continued economic growth.

Crosland's book, though not original in content, was a major achievement. In over 500 pages it clothed the long-held faith of Labour's new leader Hugh Gaitskell in the academic respectability of American political science and was immediately adopted as the gospel of the Party leadership. Labour's rank-and-file, however, still clung to their grassroots Socialism, and Gaitskell's obvious preferences for the small coterie of cultured intellectuals and visiting foreigners who met at his house in Frognal Gardens, Hampstead, alienated the Party faithful, and gave added bitterness to the internecine quarrels that were to follow Labour's defeat in the 1959 election.

In 1957 Melvin Lasky had taken over the editorship of Encounter which had, by then, cornered the West's intelligentsia through its prestige and the high fees it was able to pay. Lasky was a trusted member of Gaitskell's inner circle and was often to be seen at his parties in Hampstead, while Gaitskell became at the same time a regular contributor to the New Leader. Sol Levitas would drop in at his house on his periodic tours to see world leaders and visit the CCF in Paris.

It was during the Fifties furthermore, that Anthony Crosland, Rita Hinden and the other members of the Socialist Commentary group adopted the argument put forcibly in the New Leader that a strong united Europe was essential to protect the Atlantic Alliance from Russian attack, and European and Atlantic unity came to be synonymous in official thinking as Gaitskell and his friends moved into the Party leadership. They received transatlantic encouragement, furthermore, from a New York-based group called the American Committee on United Europe, whose leadership was openly advertised in the New York Times as including General Donovan, wartime head of OSS. George Marshall, the US Secretary of State, General Lucius D. Clay and Allen Dulles of the CIA...

But early in 1967 the US journal Ramparts revealed that since the early Fifties the National Student Association of America had, with the active connivance of its elected officers, received massive subventions from the CIA through dummy foundations and that one of these was the Fund for Youth and Student Affairs which supplied most of the budget of ISC. The International Student Conference, it appeared, had been set up by British and American Intelligence in 1950 to counteract the Communist peace offensive, and the CIA had supplied over 90 per cent, of its finance. The Congress for Cultural Freedom was similarly compromised. Michael Josselson admitted that he had been chanelling CIA money into the organisation ever since its foundation - latterly at the rate of about a million dollars a year - to support some 20 journals and a world-wide programme of political and cultural activities. Writing of Sol Levitas at the time of his death in 1961, the editor of the New Leader, William Bohm said "the most amazing part of the journalistic miracle was the man's gift for garnering the funds which were necessary to keep our paper solvent from week to week and year to year. I cannot pretend to explain how this miracle was achieved. We always worked in an atmosphere of carefree security. We knew that the necessary money would come from somewhere and that our cheques would be forthcoming."

The "Miracle" was resolved by the New York Times: the American Labour Conference for International Affairs which ran the New Leader had for many years been receiving regular subventions from the J. M. Kaplan Fund, a CIA conduit.

The CIA had taken the lessons taught back in the early Fifties by Burnham and the New Leader to heart. With its army of ex-communists and willing Socialists it had for a while beaten the Communists at their own game -but unfortunately it had not known when to stop and now the whole structure was threatened with collapse. Rallying to the agency's support, Thomas Braden, the official responsible for its move into private organisations, and Executive Director of the American Committee on United Europe, explained that Irving Brown and Lovestone had done a fine job in cleaning up the unions in post-war Europe. When they ran out of money, he said, he had persuaded Dulles to back them, and from this beginning the worldwide operation mushroomed.

Another ex-CIA official, Richard Bissell, who organised the Bay of Pigs invasion, explained the Agency's attitude to foreign politicians: "Only by knowing the principal players well do you have a chance of careful prediction. There is real scope for action in this area: the technique is essentially that of 'penetration' . . . Many of the 'penetrations' don't take the form of 'hiring' but of establishing friendly relationships which may or may not be furthered by the provision of money from time to time. In some countries the CIA representative has served as a close counsellor... of the chief of state."

After these disclosures the CCF changed its name to the International Association for Cultural Freedom. Michael Josselson resigned - but was retained as a consultant - and the Ford Foundation agreed to pick up the bills. And the Director of the new Association is none other than Shepard Stone, the Bilderberg organiser who channelled US Government money to Joseph Retinger in the early Fifties to build the European Movement and then became International Director of the Ford Foundation.