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The CIA/MI5 and the Labour Party

John Simkin

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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.

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As the article above pointed out, the CIA have funded individuals and organizations in an attempt to take the “socialism” out of the Labour Party.

The CIA’s Tom Braden became head of International Organizations Division (IOD). The IOD helped established anti-Communist front groups in Western Europe. It also used money to corrupt leading figures in the Labour Party and the Trade Union movement. As Braden told a television interviewer in 1967:

It (IOD) never had to account for the money it spent except to the President if the President wanted to know how much money it was spending. But otherwise the funds were not only unaccountable, they were unvouchered, so there was really no means of checking them - "unvouchered funds" meaning expenditures that don't have to be accounted for.... If the director of CIA wanted to extend a present, say, to someone in Europe - a Labour leader - suppose he just thought, This man can use fifty thousand dollars, he's working well and doing a good job - he could hand it to him and never have to account to anybody… They were handed out for work well performed or in order to perform work well.... Politicians in Europe, particularly right after the war, got a lot of money from the CIA....

Since it was unaccountable, it could hire as many people as it wanted. It never had to say to any committee - no committee said to it - "You can only have so many men." It could do exactly as it pleased. It made preparations therefore for every contingency. It could hire armies; it could buy banks. There was simply no limit to the money it could spend and no limit to the people it could hire and no limit to the activities it could decide were necessary to conduct the war - the secret war.... It was a multinational. Maybe it was one of the first.

Journalists were a target, labor unions a particular target - that was one of the activities in which the communists spent the most money.

Hugh Gaitskell, George Brown, Dennis Healey, Anthony Crosland, Roy Jenkins, and Douglas Jay all received funds via CIA front organization. The CIA’s great success was to get Hugh Gaitskell elected as leader of the Labour Party. When he died on 18th January, 1963, the CIA and MI5 believed that he had been murdered by the KGB. This is Peter Wright’s account in Spycatcher:

Much has been written about Harold Wilson and MI5, some of it wildly inaccurate. But as far as I am concerned, the story started with the premature death of Hugh Gaitskell in 1963. Gaitskell was Wilson's predecessor as Leader of the Labour Party. I knew him personally and admired him greatly. I had met him and his family at the Blackwater Sailing Club, and I recall about a month before he died he told me that he was going to Russia.

After he died his doctor got in touch with MI5 and asked to see somebody from the Service. Arthur Martin, as the head of Russian Counterespionage, went to see him. The doctor explained that he was disturbed by the manner of Gaitskell's death. He said that Gaitskell had died of a disease called lupus disseminata, which attacks the body's organs. He said that it was rare in temperate climates and that there was no evidence that Gaitskell had been anywhere recently where he could have contracted the disease.

Arthur Martin suggested that I should go to Porton Down, the chemical and microbiological laboratory for the Ministry of Defense. I went to see the chief doctor in the chemical warfare laboratory. Dr. Ladell, and asked his advice. He said that nobody knew how one contracted lupus. There was some suspicion that it might be a form of fungus and he did hot have the foggiest idea how one would infect somebody with the disease. I came back and made my report in these terms.

The next development was that Golitsin told us quite independently that during the last few years of his service he had had some contacts with Department 13, which was known as the Department of Wet Affairs in the KGB. This department was responsible for organizing assassinations. He said that just before he left he knew that the KGB were planning a high-level political assassination in Europe in order to get their man into the top place. He did not know which country it was planned in but he pointed out that the chief of Department 13 was a man called General Rodin, who had been in Britain for many years and had just returned on promotion to take up the job, so he would have had good knowledge of the political scene in England.

James Jesus Angleton, head of the CIA’s counter-intelligence department, became convinced that Harold Wilson was part of this KGB plot and this began a long-term campaign by both the CIA and MI5 to get him removed from power.

Wilson was eventually replaced by James Callaghan in 1976, a right-winger with close connections to the United States. After the election of Margaret Thatcher in 1979, the Labour Party moved to the left, electing Michael Foot as leader. Thatcher’s policies resulted in an economic recession and it looked like a left-wing Labour government would be elected. However, it later emerged that seven right-wing Labour MPs voted for Foot as leader. Neville Sandelson, one of those who voted for Foot admitted that the reason for this was that they knew it would create a split and enable the formation of the Social Democratic Party. As Sandelson points out: “It was very important that the Labour Party as it had become was destroyed.”

The person involved in providing the funding for the party formed by the breakaway right wing Labour Party members was Brian Crozier, who was a long time MI6 and CIA asset. The formation of the Social Democratic Party ended all hopes of Thatcher being defeated by Foot.

In was not until the 1990s that the British people woke up to what the Tories had done under Thatcher and Major. A Labour victory seemed inevitable. It was now necessary for the CIA and MI5 to get a right-winger elected to become leader of the Labour Party. John Smith, a key member of the Bilderberg Group, replaced Neil Kinnock as leader. He was known to be in ill-health and two other young politicians, Tony Blair and Gordon Brown were lined up as his replacement. Peter Mandelson, a key figure in the takeover the Labour Party, eventually opted for Blair (one way he guaranteed this was to spread rumours that Brown was gay – something that Brown has never forgiven Mandelson for).

The funding of Blair came from Israel via Michael Levy. He also raised money from some of his corrupt friends in Europe. This story has emerged over the last couple of years and Blair is about to be replaced as leader of the party. For a variety of reasons, it has been decided that Gordon Brown is not going to be leader.

The CIA candidate is John Reid. The CIA has always liked working with former members of the Communist Party. It is far safer to work with someone who has moved sharply right during their political career. Their reserve candidate is Alan Milburn, a former Trotskyite.

Frank Luntz, the American pollster, has been brought in by the CIA to ensure Reid’s victory. Working with the BBC, Luntz is busy accumulating evidence that Reid can beat David Cameron in the next general election. However, I think the CIA will fail in this one. Labour Party members deeply dislike Reid and is unlikely to gain the leadership.

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  • 4 months later...

In his book, Spycatcher (1987), Peter Wright admits that MI5 were involved in a plot to overthrow the Harold Wilson government. However, he also goes on to claim that several leading figures in the Labour Party were Soviet spies.

For example, he claims that Bernard Floud and Jenifer Hart were both Soviet spies:

Floud's attitude, when I began the interview, was extraordinary. He treated the matter as of little importance, and when I pressed him on Jennifer Hart's story he refused to either confirm or deny that he had recruited her.

"How can I deny it, if I can't remember anything about it?" he said repeatedly.

I was tough with him. I knew that his wife, an agoraphobic depressive, had recently committed suicide, but Floud was eager to conclude the interview, presumably lured by the scent of office. I explained to him in unmistakable terms that, since it was my responsibility to advise on his security clearance, I could not possibly clear him until he gave a satisfactory explanation for the Hart story. Still he fell back lamely on his lack of memory. The session ended inconclusively, and I asked for him to attend a further interview the following day. I did not make any progress with him, he maintaining that he had no recollection of recruiting Jennifer.

The next morning I got a message that Floud had committed suicide, apparently with a gas poker and a blanket.

Bernard Floud, the son of Sir Francis Floud, the High Commissioner to Canada, was born on 22nd March, 1915. Educated at Wadham College, Oxford, he became a secret member of the Communist Party.

Floud qualified as a lawyer but on the outbreak of the Second World War Floud joined the Intelligence Corps. Later he worked in the Ministry of Information (1942-45) and the Board of Trade (1945-51).

After the war Floud became an open member of the party and was active in the "Civil Servants Communist Group". Informed that he would never receive promotion as a civil servant because of his political views he resigned and became a farmer in Ongar. He joined the Labour Party and was a member of the Kelvedon Hatch Parish Council (1952-61). In 1955 Floud was employed by Granada as a television programme company executive.

Floud was elected to the House of Commons in October 1964. Soon afterwards Floud began asking questions about the case of Commander Lionel Crabb, an underwater sabotage expert, who had disappeared in April 1956 while on a secret mission to investigate the Russian cruiser Ordkhonikidze. This created a diplomatic row as the ship had brought over Nikita Khrushchev and Nikolai Bulganin on a goodwill mission to Britain. Floud seemed well-informed about the case and appeared to have obtained this information from MI6.

In 1964 Anthony Blunt was identified as a Soviet agent. Blunt confessed to his crimes in return for his immunity from prosecution. According to Peter Wright he named several other agents including Floud and Hart. Nothing was done about this allegation until Harold Wilson became prime minister. MI5 told Wilson that several Labour MPs were Soviet spies. This included Bernard Floud, John Diamond (Chief Secretary of the Treasury), John Stonehouse (parliamentary secretary, Aviation), Barnett Stross (parliamentary secretary, Health), Judith Hart (Under-Secretary of State for Scotland), Stephen Swingler (parliamentary secretary, Transport), Niall MacDermot (Financial Secretary, Treasury), Tom Driberg (National Executive of the Labour Party) and Will Owen (MP for Morpeth). As David Leigh points out in The Wilson Plot: "With the exception of the insignificant Will Owen, the spying allegations were all false."

As Leigh points out: "Of those who became secret members of the Communist Party in the 1930s, quite a few refused to do any spying in later life - Michael Straight, the rich American, for example, or the civil servants Bernard Floud and Jenifer Hart... His (Floud) profile was not that of an active underground mole at all. He had been an open supporter of Communism after the war. As a consequence, he had been 'purged' from Harold Wilson's Board of Trade in 1948 under the blacklisting procedure for civil servants. And if he had only pretended to leave the British Communist Party subsequently, his name would have been on the 55,000 files looted by MI5 from the CPGB under operation PARTY PIECE in 1955."

The naming of these left-wing MPs as Soviet spies was an attempt to undermine the 1964 Wilson government. In 1967 Harold Wilson decided to appoint Floud as a junior minister and MI5 was asked to provide him with a security clearance. Floud was interviewed by Peter Wright. After being interrogated he returned home and committed suicide on 10th October, 1967.

Floud was just another victim of MI5's dirt tricks. Floud's son, Professor Sir Roderick Floud, contacted me and pointed out that Wright was also wrong to suggest that his mother had committed suicide. She in fact died from a long-standing lung disease.


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Thatcher’s policies resulted in an economic recession and it looked like a left-wing Labour government would be elected.


What about the small matter of the Falklands? The biggest SIS station in South America missed the Argentinian preparations for war? Preposterous, no? It was this event more than any other that transformed British domestic politics and saved Thatcher.

A second, more general reflection.

Much as I've enjoyed - and largely agree with - your posts on the CIA assault on Labour, I do urge you to revisit the falls of two Tory PMs, Macmillan & Heath. The former strongly backed Kennedy and detente, while the latter was a fierce sceptic of Cold War cliches and Britain's far-right intelligence "services". The Profumo affair is long overdue a thorough re-examination. I suspect Heath's fall is every bit as interesting - and Agency-driven - as the prolonged assault on Harold Wilson.


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  • 4 years later...

When the Labour Party was elected in the 1964 General Election, Harold Wilson, the new prime minister, appointed Denis Healey as his Secretary of State for Defence. Wilson later commented: "He (Healey) is a strange person. When he was at Oxford he was a communist. Then friends took him in hand, sent him to the Rand Corporation of America, where he was brainwashed and came back very right wing. But his method of thinking was still what it had been: in other words, the absolute certainty that he was right and everybody else was wrong, and not merely wrong through not knowing the proper answers, but wrong through malice. I had very little trouble with him on his own subject, but he has a very good quick brain and can be very rough. He probably intervened in Cabinet with absolute certainty about other departments more than any minister I have ever known, but he was a strong colleague and much respected."


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