Labor History, Vol. 39, No. l, 1998

The American Labor Movement in Fizzland: the Free Trade Union Committee and the CIA

ANTHONY CAREW*

Was the American labor movement used by the CIA in the early years of the Cold War, and if so to what extent? Did CIA money finance some ostensibly independent Labor projects? Until recently there was little to add to Tom Braden’s 1967 revelations about his work as Director of the Agency’s International Organizations Division.¹

Now, the newly-available papers of two of the key trade union figures involved—Jay Lovestone, the Free Trade Union Committee (FTUC) executive secretary² and Irving Brown, its European representative—provide a wealth of new evidence.³ These papers confirm that from the late 1940s this semi-independent AFL body became highly dependent on CIA finance while providing the agency valuable cover and additional sources of intelligence on Communism abroad from 1949 to at least 1958.

Yet the relationship was not a smooth one and far from the commonplace caricature of a labor movement in the pocket of the CIA. For Lovestone the CIA was “Fizzland.” He referred to its Ivy League officers derisively as “Fizz Kids” or “Fizzers” ³ From the end of the Second World War the FTUC had been active in Europe. It had a loose and conveniently ambiguous relationship with the AFL. At one level it was an informal clearing house for AFL business which might later be formally approved by the Federation’s International Affairs Committee. Yet more often than not it was where key decisions were actually taken. Sponsored by a minority of AFL unions, with an annual grant of $35,000 from the Federation, it was run to all intents and purposes by a handful of AFL leaders—Matthew Woll of the Photo Engravers as chairman, David Dubinsky of the ILGWU as treasurer, and AFL secretary-treasurer George Meany providing the link with the Federation’s head office. To the world at large the FTUC was simply the publisher of Free Trade Union News in a number of languages. Its operational side was shrouded in secrecy.

Clearly accountable to no one, its accounts were seen only by a handful of people and minutes of meetings—usually of no more than four or five people—were little more than sketchy shorthand notes.⁴ The FTUC/AFL relationship, opaque to outsiders, clearly benefitted the Federation by offering scope for “deniability.” This enabled Meany, by that time AFL-CIO president, to respond to the 1967 revelations by denying his organization had ever received CIA money: the line the AFL has continued to adhere to despite widespread scepticism among observers.⁵

The FTUC’s initial contact with the Intelligence community was through the Office of Policy Coordination (OPC) which from 1948 to 1950 operated under State Department auspices though with CIA funds and was responsible for most of the covert activity waged against international Communism. Not until 1950 was the OPC fully integrated into the CIA.⁶

A formal relationship between OPC and the FTUC was discussed in December 1948 and agreed upon early in 1949.⁷ FTUC accounts reveal that in the course of that year $47,000 in donations from outside the labor movement were made for specific activities. Such donations were always listed separately from contributions by the sponsoring unions. This particular sum was accounted for by gifts attributed to a Robert Pager ($35,000) and John E. Anderson ($12,000). In fact the money came from the CIA via the OPC.⁸ Single cash transfers of this magnitude were rare. In future years the standard practice was for sums ranging from $2000 to $5000 to be deposited with the FTUC as though gifts from generous individuals. Lists of such donors of convenient multiples of $1000 regularly appeared in monthly accounts and by 1950 these donations were running at an annual rate of $170,000.⁹ Financial support from the CIA far exceeded the amount in donations from sponsoring unions.

Activities supported by CIA funds were wide-ranging. In France there was an ongoing subsidy to the non-Communist trade union center Force Ouvriere. There was assistance to favored non-Communist newspapers read by trade unionists such as Franc Tireur and Notre Parole. And, from 1950, Irving Brown began to finance anti-Communist dockers and seamen who, under the aegis of the International Transport Workers Federation’s Mediterranean Vigilance Committee, combatted Communist attempts to prevent the landing of American arms. In Italy there was funding for the fledgling anti-Communist labor center LCGIL (later CISL). In Germany a secret Ostburo provided a window on East Berlin and a base for espionage activities. From the end of 1949, there was also an important aid programme for the non-Communist wing of the Finnish labor movement.

The FTUC funded the Paris-based International Center for Free Trade Unionists in Exile (ICFTUE) which acted as a focus for emigre labor and socialist groups of Eastern Europe and provided an entree to dissident groups behind the Iron Curtain. In India field representative Richard Deverall ran an FTUC office in Bombay. Deverall would later move to Tokyo as the politics of the Japanese labor movement became strategically more important in the early 1950s. The Committee’s representative in Indonesia, Harry Goldberg, organized a generously funded training program aimed at uniting the non-Communist unions against the WFTU affiliate SOBSI. In 1950 substantial sums began to be channelled to China where FTUC representative Willard Etter, based in Formosa, financed the Free China Labor League with its training program in espionage and sabotage for agents infiltrating the Chinese mainland. Beyond these core Labor movement activities, through Irving Brown the FTUC also began a productive association with the Congress for Cultural Freedom (CCF), convened to carry the anti Communist struggle into the ranks of intellectuals and artists. The FTUC helped organize and finance the CCF’s founding congress in Berlin in 1950, and Brown played an important role in creating a permanent organization.

From 1949 to 1958 the FTUC received $464,167 directly from the CIA in the form of numerous relatively small contributions. All were earmarked for particular operations, six programs consuming the bulk of the funds. Activities in China accounted for the largest single expenditure with $99,401 donated between 1949 and 1952. In the years 1952-56, $66,902 was allocated for support of the FTUC’s operation in Japan. On top of the very substantial support provided directly by the US Embassy in Rome, CISL benefitted from $65,432 which the CIA allocated for use in Italy. Indian operations consumed $62,000 over the nine years. And in programs of shorter duration, $52,500 was earmarked for anti-Communist activities in Finland and $44,750 for similar work in Indonesia.¹⁰

Funds were transferred wherever they were needed in a variety of ways. Initially the FTUC relied on the New York-based Jewish Labor Committee’s (JLC) network in Europe to effect transfers through its own bank account.¹¹ Courier services on behalf of the FTUC were often performed by Bert Jolis, a New York dealer in jewelery who had served in the Labor Division of OSS during the Second World War and derived cover for CIA work as a “special representative” in Europe for the Marshall Plan.¹² Many of Irving Brown’s activities in France among the anti-Communist labor movement were financed directly from the CIA rather than through the FTUC, local currency being provided for his projects by the US Assistant Labor Attache in Paris, John Phillipsborn.¹³ For Mediterranean Committee operations Brown also had a Zurich bank account in the name of the Committee’s chairman, Pierre Ferri-Pisani to which funds were periodically credited.

Systems of financial accounting were primitive. Jay Lovestone was under pressure from both the OPC/CIA and his FTUC officers to account for disbursements. Tom Braden, who would later be responsible for cutting back the FTUC grant, recalls:

The CIA was handing over enormous sums of money to Lovestone and Brown for their network abroad, and it was always a sore point that we never got any accounting from them. Lovestone and Brown successfully managed to say, well, we spent that in Marseilles, or that in Paris, or there’s a Communist dock strike and we broke it up. ¹⁴

Concern to know how funds were being spent led the Agency’s security chief, Sheffield Edwards, to open FTUC mail on occasion.¹⁵ The FTUC officers’ insistence on full financial reporting was to ensure that the Committee’s label was only attached to projects explicitly approved. Lovestone resented this “book-keeping psychology,” but he went through the motions and demanded Brown maintain accounts. But Brown was too much a man of action to devote much time to such bureaucratic detail. On occasion he would spend money before it had been released. Funds would then be juggled around between different headings and on one occasion he borrowed money privately in the expectation that an official allocation would later materialize.¹⁶

If OPC/CIA were concerned about the absence of systematic book-keeping, the FTUC’s counter complaint was that agreements with the agency were sometimes reneged on or not complied with on time. Details of agreements were not committed to writing. Lovestone would visit Washington periodically for a meeting with OPC Director Frank Wisner—“my luncheon friend” as he referred to him—and cut a deal. But the follow-up within OPC often left much to be desired, and bureaucratic foot-dragging was part of the weaponry of political in-fighting in the faction-riven OPC/CIA. Delays in delivering funds could jeopardize FTUC projects and this became an important item on Lovestone’s growing list of criticisms of the Intelligence service in 1950.¹⁷

The initial cause of friction was over finance for Italy. The issue was how much money was needed for labor programs and who should be responsible for channelling it. In 1949 the FTUC officers were appalled at the huge amounts of money showered on the Italian labor movement, mostly by the US Labor Attache in Rome, Tom Lane. The FTUC believed that in encouraging the non-Communist Italian labor movement, selective and carefully targeted expenditures were what was required if the Italians were to have an incentive to follow American advice on how to build their new organization.¹⁸ CIA money indiscriminately dispensed was frustrating FTUC plans and was having a corrupting influence on Italian labor, creating a debilitating dependency on American dollars for the most basic trade union operations. Moreover, in granting the money, Embassy officials were apt to give the impression that it was being done with the approval of the FTUC. This misuse of its name was a major grievance. “I think our Italian friends have been overfed,” wrote Lovestone. “They don’t need anything for some time to come...If they keep on with their present high caloric diet they will get acute indigestion.”¹⁹ Sharing the field with Tom Lane and CIA personnel in the Rome Embassy was definitely no way to encourage Italian labor to abide strictly by the FTUC line.

The Committee’s second major complaint surfaced in the latter part of 1950. Under the Marshall Plan, the CIO—the AFL’s rival—was beginning to take an interest in European labor affairs in competition with the Federation, encouraged by the prospect of access to government funds. What made this CIO activity threatening to the FTUC was that the large counterpart funds generated by the Marshall Plan included a substantial amount for use by the American government on undisclosed projects, and these sums were now being tapped by the CIA.²⁰A significant CIO role within the Marshall Plan therefore meant the FTUC risked losing its monopoly as dispenser of CIA largesse. The Marshall Plan’s new Administrator (Averell Harriman) and its head in Europe (Milton Katz) were keen to encourage a joint international effort by the two wings of the American labor movement. This development therefore posed a challenge to the FTUC’s preeminent role in covert activities.²¹

A third factor contributing to the gradual souring of relations between FTUC and CIA was more general though it came to have a very specific manifestation. Within the CIA officialdom were strongly anti-labor people deeply concerned about American trade unionists having such an important role in the Intelligence service’s fight against Communism.²² Such people remembered Lovestone as a pre-war Communist, his field representatives, Brown, Goldberg and Etter as ideological soulmates, and wondered if their politics had really changed. Lovestone viewed this mind-set as a further explanation of the frequent delays in meeting financial commitments and the harassment he experienced at the hands of CIA accountants.

A prime focus of anti-labor criticism within the CIA was Carmel Offie, a man central to FTUC-CIA relations. Carmel Offie was a career foreign service officer who, in the late 1940s, worked as Frank Wisner’s personal assistant with responsibility for East European refugee affairs. From a humble background as a foreign service clerk, Offie had moved up the career ladder cultivating people of influence. In the course of foreign postings in the USSR, France, Italy and Germany he had developed invaluable contacts throughout Europe, particularly in government and labor movement circles. Working with Wisner, he was used as an all-purpose “Mr Fixit” with influence extending beyond the limits of his formal position.²³

In this role he assumed responsibility for liaison between the FTUC and the CIA, becoming Lovestone’s most valuable contact in Intelligence circles. Indeed, Offie came to identify closely with the FTUC and in disputes was prone to support the Committee’s position. Precisely because of his perceived pro-labor bias, Offie was deeply distrusted by elements within the CIA. Compounding his vulnerability to internal agency criticism was his homosexuality which had long since attracted the attention of the FBI. When Senator McCarthy also began to take an interest in him, to spare the CIA embarrassment he was formally placed on the payroll of the FTUC in June 1950,though the CIA continued to fund his salary.²⁴

In 1950 strains in the FTUC-CIA relationship increased. The problem of uncontrolled CIA spending in Italy was unresolved. Brown complained that funding agreed for operations in Finland and Poland had not been delivered and that a proposal for covert activities in Czechoslovakia was being held up. The FTUC took exception to the fact that they had not been informed about aid given to Franc Tireur in their name which had been transferred directly by the CIA. There were also ominous delays in agency approval of the all-important budget for Brown’s work in France, and this problem was linked to signs of expanding Marshall Plan activities in the labor field. Other channels of operation were opening up for the CIA which made it less reliant on the FTUC.²⁵

Lovestone and Brown’s response was to withhold from the CIA some intelligence reports gleaned from labor sources. “Why should we give information after the treatment we get from his [Offie's] associates in Washington?” asked Brown. Lovestone answered:

Believe me...I am far more terribly disgusted with the Monk outfit [i.e. theCIA—“Monk” was Offie’s codename] than even you are... Some people are taking us too much for granted and use our name as if they owned us... ²⁶

In addition to the ongoing friction over broken commitments, there was now much uncertainty arising from personnel changes at the CIA. Political criticism of the performance of Director of Central Intelligence Admiral Hillenkoeter led to his replacement by General Walter Beddell Smith in October 1950. As his assistant. Beddell Smith brought into the agency on a consultancy basis the former wartime head of OSS in Europe, Allen Dulles. What impact these changes would have on the FTUC and whether Frank Wisner, the man with whom they had been used to doing business, would survive this shuffle were matters that exercised Lovestone and his colleagues.

A top level meeting to review progress in the labor program took place on 24 November 1950 involving Beddell Smith, Wisner, Meany, Dubinsky, Woll, Lovestone, and Offie.²⁷ Lovestone conceded grudgingly that their joint work had been valuable, but implied that the funds involved were not all that large. Wisner countered by pointing out that in addition to upwards of $250,000 channelled directly to the FTUC in the past year there were considerable amounts of counterpart funds for labor projects in France and Italy. This brought them to the nub of the FTUC’s concern—the prospect of CIO involvement in CIA work.

Lovestone expressed concern about the risk to security if the CIO was to be admitted to the international labor program. The CIO was unreliable because of penetration by Communists. Meany insisted that he would prefer to withdraw from the program rather than work with them. Beddell Smith attempted to reassure them that he was under no pressure to bring the CIO in, but Wisner conceded that he had been asked about the prospects for their being admitted. Wisner explained that if the CIO were to have a role it would have to be on condition that it would be handled by a small group of men experienced in international affairs sworn to secrecy. When the CIO met these condi tions, he would be prepared to deal them in on a project-by-project basis. This was still unacceptable to the FTUC, and in an attempt to placate them Beddell Smith expressed his doubt about the likelihood of the CIO ever being admitted. But if they were, he endorsed Wisner’s suggested approach. It was far from the reassurance the FTUC had hoped for.

On the question of mutual exchange of intelligence information, where the FTUC felt that they were not enjoying reciprocity, Beddell Smith accepted the idea in principle though insisting there were types of information the agency could not pass on. But he wanted as much information as possible made available and he asked Wisner and Offie to ensure this happened.

As the meeting closed there was a revealing exchange. The Director of Central Intelligence remarked that he did not regard the CIA funding of the FTUC as a subsidy for labor. Though this was exactly what Lovestone wanted, the independence of the labor movement was also something to be safeguarded and Woll seized on Beddell Smith’s remark, commenting that the chief value of labor in foreign relations was its independence. But full independence in policy was easier said than done. Italy and France had revealed how, as paymaster, the CIA had been in a position to use the name of the FTUC without authority to legitimize its activities, and the bizarre circumstances of Offie’s employment was testament to the ambiguity in the relationship between the Committee and the CIA.

The outcome of the meeting was an understanding to agree to a Charter of Operations drafted by Wisner and Offie which would clarify their respective positions and responsibilities. Whether such a document was ever produced is not clear. There was little mention of this exercise again and no trace of any written agreement. Tom Braden, who later ran the CIA’s program of support for covert labor activity, claims he never saw such a document.²⁸ In any event, Lovestone’s pessimism remained. He explained to Brown, “Scarcely a day passes when I don’t get hit by their irresponsibility and slovenliness of work, by their utter disregard for our own basic interests.” His relations with Wisner too were showing signs of strain and the OPC Director was now telling people that Lovestone was a hard man to work with. “Maybe he is right,” admitted Lovestone while adding defiantly “maybe he better try the other crowd [i.e. the CIO].”²⁹

Unhappy over what had been said by the Director of Central Intelligence, the FTUC decided to cut back some of their joint activities not strictly “labor” in character and seek funding from other sources. That meant, for example, disentangling themselves from the CCF, with whose launch in June 1950 the Committee had been deeply involved as organizer and conduit for funding. Similarly, the Committee wanted to disengage from publications like Franc Tireur which were not specifically labor movement organs.

Beyond this, the FTUC decided to establish a separate office in Washington for Offie. This initiative was a move to distance him from the agency. Yet Lovestone was hoping that the CIA would foot the bill for the office, though in the event the FTUC was forced to pay the rent.³⁰The FTUC was maneuvering to assert a measure of independence from the CIA without surrendering the financial lifeline.

In the developing cat and mouse game, Lovestone insisted that he and Brown avoid being divided and outmaneuvered. Confidential information to the agency had to be passed on by Lovestone rather than sent directly from Europe. The CIA did not keep him abreast of things they learned from Brown and there was a danger he could be excluded from the information network. Each needed to be sure to keep the other informed. Not to do so put the agency at a great advantage. It became increasingly clear that the CIA had operations independent of the FTUC. Lovestone and Brown had understood that they were the key players in CIA operations in Finland but had recently discovered that it was also funding activities there by the Norwegian labor leader, Haakon Lie.³¹

In addition, Lovestone was alarmed at the lack of security within CIA. In discussion with Arthur Koestler of the CCF, he discovered that his literary friend was privy to information concerning the FTUC meant to be strictly confidential.³² For these reasons, and despite what had been discussed with Beddell Smith about exchanging information, Lovestone continued to restrict the flow of intelligence to the agency.

Brown shared Lovestone’s perception of a deteriorating relationship. Short of cash for his numerous projects and still uncertain about future budgetary arrangements for France, he wrote in blistering terms of CIA inefficiency and talked about breaking off all relations:

I cannot conceive how we can lend our good name and organization to such a group of uninformed and irresponsible sophomores. I absolutely refuse to be put in the position of being run by people who have never been in the labor movement, who have never lived intimately with the problems that we are dealing with and who are merely intellectually on our side for certain moments...

He was particularly concerned by the agency’s short-term approach to funding when what was needed was permanence and continuity.³³ In protest, he held up plans for the CIA to attach to his Paris office an assistant (Leon Dale) who would have security clearance and handle finances. He told his agency contact in Paris that until his budget was fixed they could not use his or the AFL’s name on any activities. This would have a significant effect on important activities in Western Europe.³⁴ He also expressed this position vigorously to senior CIA officers when they called him back to Washington forconsultation.³⁵

Within the FTUC, David Dubinsky was the least enthusiastic supporter of the CIA link. He was increasingly disturbed at what he saw as CIA irresponsibility and his instinct was to sever the connection. However, Lovestone was inclined to try and redefine the relationship. High among his list of priorities was an arrangement that would free him from “the petty book-keeping psychology and laundry methods” of the CIA.

In March 1951, Lovestone submitted a proposal to the agency under which the FTUC would be allocated a block grant for operations, thus allowing them to plan their work over a longer period without recurrent interruptions in the flow of funds and the constant need to submit financial reports. He believed the case had been demonstrated by developments in China where an interruption of the promised supply of finance to the Free China Labor League had placed its undercover agents on mainland China in grave danger. As a consequence a number of them had recently been captured and executed by the Chinese Communists. The proposed arrangement would have gone a long way towards meeting the FTUC demand for operational independence.³⁶

However, not only was the CIA disinclined to make this concession, it had its own demand on the FTUC. That same month Allen Dulles told Lovestone that Offie had to be removed from liaison with the FTUC. Various reasons were given but Dulles told Offie himself that he had been giving away confidential information to outsiders. When pressed to say who these were, Dulles told him he had in mind Lovestone and Brown.³⁷ Offie was under close surveillance by the FBI at this time arising from their concerns about his pro-labor views and sexual habits.³⁸ The CIA also believed that the FTUC was becoming too assertive. Irving Brown’s outspoken criticism of the agency only weeks earlier when he had met senior officials for talks in Washington had clearly upset them. Compounding this further, Brown and Offie had subsequently gone to Rome to assess the significance of a recent schism in the leadership of the Italian Communist Party and while there had visited the CIA station officer and criticized official CIA labor policy in Italy.³⁹ Taken together these developments evidently caused the CIA to demonstrate who was really running the program.

Meany and Woll were beginning to share Dubinsky’s disillusionment and Lovestone informed Brown: “I am convinced that we had better wind up our projects and not enter into any new ones.”⁴⁰ However, the FTUC was not inclined to take action, and a complete break was clearly not what the CIA wanted, though they were insistent that unless Offie were removed there would be no more funding.⁴¹

In general, the difficulties were viewed in the FTUC as a product of their operations being relegated to a minor priority in CIA thinking. Yet they saw themselves as having a legitimate interest in international labor operations and an entitlement to be treated as insiders—not as outsiders or, in Offie’s graphic language, “whores to be used and directed by politically incompetent dilettantes.”⁴²

With the CIA going through a major internal reorganization, Wisner was losing influence in the labor field—“stripped of all union labels,” as Lovestone put it.⁴³ Meanwhile, Allen Dulles, whom the FTUC did not trust, was maneuvring to take over that area, poised to appoint his protege, Tom Braden, to assume day to day administration of covert labor operations, confident that he could dominate the relationship with the FTUC. Offie warned them that Dulles was likely to woo the FTUC field staff by allowing them to undertake CIA activities independent of the Committee. Already there was a tendency for them to be given Intelligence assignments outside their labor brief, the potential effect of which was to marginalize Lovestone.⁴⁴

The FTUC leadership arranged a further meeting with General Beddell Smith in April 1951. On the agenda would be the FTUC’s long-standing grievances about the way in which money was handed out in Italy, the mingling of CIA and Marshall Plan funds, and the potentially disruptive influence of the CIO.⁴⁵ Beyond these points it intended to raise the maladministration of programs in Finland and China and to complain about the CIA’s new front organization—the National Committee for a Free Europe (NCFE)—whose leaders, it was claimed, were politically inexperienced and who, despite their $8,000,000 annual budget, had done little to win the confidence of Eastern European emigre labor groups. They were also to complain that there had been no CIA support for the International Confederation of Free Trade Unions (ICFTU), the only effective organization, it was argued, in the fight against the Communist-controlled WFTU.⁴⁶

To outflank Dulles, Lovestone was aware that he needed to establish a direct line to the Director of Central Intelligence. Offie suggested that he press Beddell Smith that all FTUC transactions with the CIA be handled by someone in the Director’s office. Even if that person had a military background and no knowledge of organized labor, the arrangement could work as long as he had the ear of the Director.⁴⁷

The meeting with Bedell Smith went badly and degenerated into a shouting match. According to Dubinsky’s account:

We told them they would ruin things [in Italy], but they wouldn’t stay out. General Smith kept sounding more and more dictatorial at our conference. Finally, Lovestone said to him: “You’re a general, but you sound like a drill sergeant.” When he protested, I said to Smith, “You’re not telling us what to do; we are from the labor movement.” Then I turned to Matt Woll and said, “Why are we sitting here, let’s get out.” And that was good-bye.⁴⁸

In reality the parting was not so final: Dubinsky’s account was written 25 years later in an attempt to deny disclosures of a continuing relationship between the AFL and the CIA. But it seems that the FTUC secured nothing more from the meeting than a suggestion from the Director of Central Intelligence that the two bodies now review their joint work, project by project. There was no question of the FTUC being accorded a block grant such as Lovestone had sought nor any arrangement under which Allen Dulles would be bypassed.

Within this review process Lovestone continued his attempt to refashion the relationship and obtain more reliable financing, though the bargaining advantage was very much with the CIA. Offie’s advice was for Lovestone to announce that in future the FTUC would run its own affairs in what would be effectively a buyer-supplier relationship. Under this arrangement, the FTUC would insist on retaining freedom of action to execute projects which had been “bought” and approved by the agency. It would insist on being paid 50% of the budget for projects in advance on notification of approval, along with a further 20% which would be earmarked for administrative expenses. The latter provision was to enable the FTUC staff to charge personal expenses and to allow the Committee to build up a financial cushion.

Lovestone was to make clear that the Committee could no longer trust the CIA with too much knowledge of how the FTUC operated and that for reasons of security it was revising its procedures. In practice this meant insisting that all contact with the FTUC be in writing but unsigned and without referring to names. In emergencies, Lovestone could be contacted via an intermediary in New York, otherwise urgent communications could be delivered by hand to Virginia Tehas, Meany’s secretary in Washington. Offie suggested that Lovestone submit this “final proposal” to Dulles and give him no more than a couple of weeks to accept it. If it were rejected, he should agree to no new projects and allow the existing program to run down.⁴⁹

In fact such a proposal was only likely to reinforce a view held in the CIA that the union leaders were “money scroungers.”⁵⁰ Offie’s proposals were drawn up as a briefing for a meeting between Lovestone and Dulles a week after the ill-fated session with Beddell Smith. But significantly Dulles did not even bother to attend. Lovestone could only write to him threatening that if funds already promised were not handed over he would cable his field staff to return home. He also announced that the FTUC had decided “not to burden your friends with any new projects.”⁵¹

Dulles answered that he was willing to meet at any time to discuss outstanding balances due, “together with the amount of any unexpended balances which you may be holding.” The agency, he said, had the highest regard for Brown’s work. There were no problems associated with him and his budget had been approved. They were also impressed with Deverall's activities in India and wanted to continue “at the agreed rate” to support his efforts, though it remained to be decided which specific funds would be used. With regard to the work of Etter in Formosa and Goldberg in Indonesia, there remained some matters to discuss, but he was certain that an understanding could be arranged in each case. As to new operations, Dulles re minded him of Smith’s proposal a few weeks earlier, that they should “handle work project by project as we might mutually agree upon each field of useful action.” However, he noted now that the FTUC did not wish to proceed with any additional projects.⁵²

It was a carefully drafted response that cleared the way for a continuation of the parts of the existing program that the CIA valued without conceding anything to Lovestone on funding arrangements or greater independence. Dulles was signalling that the FTUC operation still had some usefulness, but the CIA was not going to let Lovestone have the free rein he sought. And as Offie had warned, there was still scope for the agency to flatter Brown and his colleagues in the field by tempting them into “extra-curricular” work.

Telling Brown that the days of the relationship were numbered, Lovestone reassured him: “There are other irons in the fire which I am sure will glow well.”⁵³ In fact, apart from occasional donations from the Rockefeller Foundation to facilitate contacts with the Turkish and Indonesian labor movements, totalling less than $16,000, major new sources of external funding for the FTUC seem not to have been found.⁵⁴

In June 1951, Offie was removed from the FTUC payroll. Petty haggling over relatively small sums occupied Lovestone and the agency’s finance division and captured much of the spirit of the relationship. They charged him with being $1000 out in his accounting for expenditure in Finland. He in turn tried to get the CIA to pay $1666 per month for three months towards the cost of closing down Offie's Washington office and some residual expenses.⁵⁵ Brown reported that he was preparing to cut out a number of activities. He was telling his CIA contacts nothing for the moment, and he advised Lovestone that he was simply playing along until they pulled out completely. On the other hand, his impression was that the CIA was making a definite effort to be nice to him with a view to driving a wedge between himself and Lovestone.⁵⁶ Meanwhile Lovestone wrote to Sam Berger, Averell Harriman’s liaison to the CIA and the FTUC, in tones that suggested that the FTUC and the agency were coming to the parting of the ways.⁵⁷

A degree of mutual dependency still existed. The FTUC dropped out of the program in Finland and Brown responded coldly to an agency proposal that they take over the FTUC’s valuable Czech contact (Jaroslov Profous) to exploit his contacts in Eastern Europe. Lovestone approved of this arm’s length approach and warned against further involvement “...unless all conditions are met in advance. They want your merchandise. Let them pay for it—and also for an insurance policy.”⁵⁸ The rider is revealing. There was no total rejection of new operational initiatives on Lovestone’s part: rather, a hard-nosed pragmatism prevailed, working on the simple rule that money could be accepted provided that the FTUC was free to operate under the loosest of terms. Indeed by the end of 1951 Lovestone himself was asking Dulles for funds to redeploy Deverall in Japan.⁵⁹

Labor operations directed at the Eastern Bloc provided the strongest evidence of the CIA’s intention to curtail Lovestone’s influence. When the CIA established the National Committee for a Free Europe (NCFE) in 1950 it created, with FTUC support, a Labor Contacts Division in New York responsible for coordinating the activity of Eastern European emigre labor groups in North America. A trusted Lovestone colleague (Henry Kirsch) had been appointed Director. This gave Lovestone considerable scope for influencing the emigre community.

A few months later, the NCFE made a further appointment with Leon Dennen assigned responsibility for liaison with emigres associated with the Paris-based ICFTUE. This group, which the FTUC had hitherto financed directly, would now receive $5000 per month from Dennen's generous budget. Dennen himself had been a member of the Lovestone circle and formerly worked for the Jewish Labor Committee. At the FTUC the understanding was that he would now work in close collaboration with Irving Brown, becoming in effect the FTUC’s Paris representative within the ICFTUE.⁶⁰

However, this was not the CIA’s intention and it soon became clear that Dennen had really been brought in to replace Kirsch and circumvent the FTUC. The NCFE had come to the conclusion that Kirsch was too close to Lovestone. When Lovestone protested to NCFE Chairman C.D. Jackson about what was happening he was told that there was no room for anyone whose primary loyalty was to the AFL and FTUC and that they would not allow Lovestone to dictate to or control the organisation. Kirsch was unacceptable because he was a “Lovestoneite.”⁶¹

The FTUC subsequently broke off all links with the NCFE and withdrew Matthew Woll from membership of its Executive Committee. The NCFE proposed retaliation by cutting off funding to the ICFTUE, but this was overruled by Dulles. According to Lovestone’s intelligence, Dulles insisted: ‘We have enough trouble with Lovestone as it is.”⁶²

In the midst of this dispute over FTUC/NCFE relations Lovestone and Brown found themselves the subject of concerted attacks in the syndicated column of the right wing journalist, Westbrook Pegler, who identified the pair as Communists who had now infiltrated American government programs overseas. Pegler had first written in this vein in March 1951, as the CIA was demanding Offie’s removal from the FTUC. Now the attacks became more frequent and continued for over a year, drawing unwelcome attention to the FTUC.⁶³

Lovestone was convinced that Pegler was primed by people at the highest level within the CIA. His files contain a document evidently addressed to the agency and criticizing it for doing nothing to forestall further attacks or to prosecute Pegler, even though his articles concerned matters of national security: “This experience has served to cause the FTUC to decide to terminate at the earliest possible moment present arrangements still in effect between it and the CIA.” It went on to specify that Leon Dale would be withdrawn from his position of trust in Brown’s office, and all other CIA contacts be terminated immediately. However, Lovestone still left the door open for a resumption of the relationship. The document also stated that if the authorities wanted the FTUC to carry out projects in the national interest, the Committee would consider an entirely new arrangement which would protect it from the CIA’s present lax and insecure practices. The FTUC, it claimed, was revising its own internal practices to make it more secure. It was prepared to reveal these only to the Director of Central Intelligence and only when a new arrangement was entered into.⁶⁴ The FTUC was available for business, but only on new terms.

If the document was sent to the CIA there is no sign that it had any impact on the relationship in the months ahead. Were there ever talks between the two parties over a new operating arrangement? Again there is no documentary evidence. Cord Meyer, then deputy to Tom Braden in the International Organizations Division of the CIA, who succeeded him in 1954, has claimed in an interview that a meeting took place “around 1952” between George Meany and Allen Dulles at the latter’s Georgetown home and that an arrangement was subsequently formally agreed. Under this Irving Brown was to report directly to Meany, with the latter contacting Dulles or Meyer only when a problem arose.⁶⁵ The notion of George Meany having direct contact with Dulles on matters where he invariably relied on Lovestone does not ring true, and if the meeting did take place there is no record.

What did happen from this point on is that the CIA subsidy to the FTUC continued but on an ever diminishing basis. From a peak of $172,882 in 1950, it declined by 30% to $126,169 in 1951 and to $96,060 in 1952. Richard Deverall’s work was given a new lease of life with his transfer to Japan. However, despite Dulles’s earlier assurances to Lovestone, the Chinese and Indonesian programs were terminated in 1952, with Willard Etter and Harry Goldberg brought home. Likewise, under Braden’s sceptical gaze, the separate funding of Irving Brown’s Paris-based operation was severelypruned.⁶⁶

The scale and nature of CIA-financed transactions involving Brown emerges from his correspondence in 1953. Acting for Brown during the latter’s trip to CIA headquarters in March, Leon Dale compiled a report in which he recorded giving $5000 to Robert Bothereau, Force Ouvriere’s general secretary and $6000 to a representative of Ferri- Pisani in the Mediterranean Committee (who simultaneously placed a request for a further $3-4000). Dale also gave a monthly subvention of $250 to one French publication and $500 for unspecified purposes to another visitor.⁶⁷ Thus over four weeks nearly $12,000 had been handed out, with requests received for up to $4000 more.

At the beginning of 1953, Brown’s budget was also funding the Italian section of the Mediterranean Committee on a separate basis to the tune of $4000 per month and the CISL metalworkers at the rate of $1500 per month. But by the middle of the year, as the CIA squeeze began to be felt, the monthly subvention to the Italian port workers was reduced to $2500, leaving the Mediterranean Section secretary Giornelli to report to Brown that he was in “serious trouble, like you and Ferri.”⁶⁸ Like Lovestone, Brown was unhappy to see his CIA funding dry up and he travelled back to Washington in March 1953 to try to interest the agency in proposals relating to the upcoming elections in France, Italy, and Germany.⁶⁹

However, renewed doubts about the program were creeping in within the FTUC. David Dubinsky queried the value of continued work abroad. The CIO was planning to withdraw from international work in Europe and Dubinsky felt the AFL ought to follow suit. A sign of his growing disillusionment with the FTUC’s independent work was his reduction of aid-in-kind given to the Committee. As well as providing it with free office space in the ILGWU headquarters, he had previously also covered the cost of FTUC salaries and postage. Now he refused any longer to bear the wage bill for Lovestone’s secretary and began to bill the FTUC for postage.⁷⁰

Lovestone was compelled to ask Woll for prompt payment of the annual AFL subsidy otherwise, he insisted, “we will be absolutely through because I have no funds with which to work”. Brown wanted Lovestone to try once more to rebuild relations with the CIA and restore the financial link but the latter was unwilling to attempt this in a climate soured by Pegler’s continuing public attacks.⁷¹

Indeed in this respect the situation deteriorated further in 1954 when Spencer Miller, Assistant Secretary for Labor, resigned after giving evidence to a closed session of the House Un-American Activities Committee in which he described the existence of a network of Communists in the Department of Labor. He claimed they had been placed there by a “kingpin” and in doing so pointed the finger at Lovestone.⁷² It was hardly a climate conducive to any attempt by the FTUC to breathe new life into the relationship.

That year, the CIA subvention to the FTUC was reduced to $53,789 and cuts in Brown’s budget led him to report that the Mediterranean Committee was in danger of going under. Agency financial support then stabilized at the 1954 level for two years before more than halving to $25,239 in 1956. The slide resumed once more and by 1958 the subsidy amounted to a mere $10,109.⁷³

As CIA subventions dried up, the very existence of the FTUC came under concerted attack within the labor movement following the merger between the AFL and CIO in 1955. The CIO had now abandoned its high profile international role with representatives based overseas, and within the framework of the AFL-CIO they also expected the FTUC operations to cease. In fact there ensued a struggle between Meany and Walter Reuther that lasted for two years over the substance and style of AFL-CIO foreign policy and had at its heart the question of the role of Lovestone and the status of the FTUC. Reuther wanted the Committee disbanded on the grounds that its continuation would involve further reliance on sub rosa payments from outside sources rather than a healthy recognition of the need to develop, within the labor movement, adequate fund-raising in support of democratically determined international policy. Lovestone fought back vigorously in favor of retention of the FTUC as a vehicle for an independent AFL-CIO foreign policy, losing no opportunity to play on Meany’s fear that Reuther and his circle were soft on Communism.⁷⁴

Not until December 1957 was agreement finally reached within the AFL-CIO that the freewheeling overseas activities associated with the FTUC should cease. Yet faced with this decision, the deposed FTUC Executive Director remained defiant and full of bravado, telling his ally, Richard Deverall: “I shall be doing all the work I did under the new title. Please note there is no dissolution of the Free Trade Union Committee. It can always be brought back since it was never dissolved...”⁷⁵ Indeed the Committee’s financial accounts were not immediately closed, but as a functioning organization the FTUC was finished, and with its demise ended that particular phase of the AFL/CIA relationship.

By the early 1960s, the AFL-CIO’s international work was generously supported by the Agency for International Development. Nevertheless it is reasonable to suppose that a working relationship between Lovestone and more especially Brown and the CIA continued in subsequent years, probably on a freelance basis with the AFL-CIO leadership turning a blind eye. In support of the latter possibility, George Meany’s long-serving secretary tells the story of receiving one day in the late 1960s a letter addressed to Meany from the President of Force Ouvriere’s railway union complaining that Irving Brown had cut off their monthly subsidy. She did not show the letter to Meany but waited until Brown’s next visit to headquarters and handed it to him with the request that he ask the Frenchman to tear up his file copy. Brown accepted it without a word.⁷⁶ It was not an official AFL-CIO transaction.

As well as confirming the existence of a financial link between the FTUC and the CIA, the Lovestone and Brown correspondence provides a valuable insight into the nature of the relationship between the two parties. The financing of the FTUC’s programs is revealed to have been on a drip-feed basis when the union side was looking for a reliable source of funding. At the same time the FTUC wanted full operational control whereas the CIA was unwilling to grant this and indeed financed parallel programs without consulting the Committee. This was at the root of the disharmony that gradually undermined the relationship. At the heart of it was a lack of trust. Each side used the other and, when it suited, kept the other in the dark.

The connection between organized labor and the CIA was a product of that freewheeling period between 1948 and 1950. It was then that covert operations by the intelligence service first began, a spirit of adventure and derring-do characterizing the activities of the key body, the OPC. With the proliferation of programs aimed at the Communist enemy, it was hardly surprising that the FTUC, with its expertise in fighting Communism within the labor movement, should find a role for itself in the world of intelligence.

Yet OPC/CIA was out of control and it was with a view to tightening up on procedures and professionalizing intelligence operations that General Beddell Smith had been appointed. His arrival coincided with a rise in the tension between the two partners. The FTUC desire to be left alone to spend the CIA’s funds as it thought fit was unlikely to be conceded. But Beddell Smith was an unknown quantity to the labor leaders, and the fact that Lovestone had influential friends among his predecessors, notably General William Donovan, the wartime Head of OSS, and Admiral Roscoe Hillenkoeter, until recently Director of Central Intelligence, may have bolstered his belief that such an unlikely arrangement was a possibility.

Lovestone wanted the FTUC to operate as an equal partner with the CIA, not as a subordinate agency, and would brook no interference in the operational side of his program. After all, he considered himself the expert on how to fight Communism within the labor movement, a subject on which he believed that the CIA was ill- informed. He was unwilling to accept anything less than this and his intransigence reinforced the negative reaction to the FTUC within the CIA. The tone of the relationship was influenced in no small way by Lovestone’s personality. He treated officials of OPC/CIA with suspicion and often barely concealed contempt, in the same way that he dealt with people from the labor movement who were not entirely within his own circle. In a sense, it was but another theatre of factional warfare for him. Dulles, Wisner, and especially Braden, whom Lovestone viewed as a raw novice, were each in turn the object of his vitriol.

It is an irony that the FTUC should have fallen foul of the excesses of the McCarthyite climate of the early 1950s. Carmel Offie was removed from the labor program at least in part because of his association with Lovestone and Brown. And the supreme irony is that Jay Lovestone, the arch anti-Communist, was vilified among sections of the intelligence community because of his former Communism. Allen Dulles may not have numbered among those who questioned Lovestone’s politics, but the climate of suspicion doubtless gave him an excuse for keeping Lovestone at a distance. Dulles was content to use his expertise on a selective basis, but was clearly unwilling to give him scope to dominate the partnership.

Links formed within the world of intelligence are not easily broken, and there is no reason at all to suppose that the winding up of the FTUC and the termination of CIA operations funded through it marked the end of Lovestone’s and Brown’s association with the CIA. But if they did maintain their intelligence connections thereafter the business was evidently conducted with little or nothing committed to writing. And unless some day the Central Intelligence Agency files are opened up, the chances of documenting developments in this latter period are slight.

*I wish to acknowledge generous financial support from the British Academy and the Nuffield Foundation in researching this topic. I am also indebted to colleagues Ian Bullock, David Murphy and Joan Keating for helpful editorial advice.

Endnotes