Harry Kelber, AFL-CIO’s Dark Past, Labor Educator (15th November, 2004)
On December 10, 1948, Matthew Woll, president of the photoengravers union and one of the four labor leaders on the AFL's Free Trade Union Committee, wrote Frank Wisner, a top officer of the Central Intelligence Agency: "This is to introduce Jay Lovestone… He is duly authorized to cooperate with you in behalf of our organization and to arrange for close contact and reciprocal assistance in all matters."
Thus, the AFL began a relationship with the intelligence agency that was to endure for better than two decades. Wisner recognized that the FTUC could be an important intelligence-gathering asset and was willing to pay a substantial price for its assistance, said to have amounted to many millions of dollars over the years.
From Lovestone's perspective, the additional funding would help him expand operations in China, Japan, India, Africa and the Arab countries. Although he chafed at having to make reports to Wisner, he needed the agency's help. While he supplied the CIA with intelligence reports from his FTUC operatives, he also received information from Wisner, who advocated "support of anti-communists in free countries."
Lovestone had no trouble cooking the FTUC's balance sheets from the prying eyes of any dissident. In 1949, for example, AFL-affiliated unions contributed $56,000 to the committee, but an additional $203,000 was attributed to "individuals," actually the CIA. In 1950, the agency funneled another $202,000 to the FTUC; in later years, the agency's funding to the AFL was kept secret, with the amount dependent on the size and nature of the covert operation.
Lovestone's very extensive, and expensive, anti-communist operations in Europe were largely financed from money siphoned off from the Marshall Plan (officially the European Recovery Plan), which provided $13 billion to Western European nations between 1948 and 1950.
Under the Plan's rules, each country receiving financial aid had to refund 5% of the total to U.S. occupation forces for administrative expenses. That turned out to be a slush fund (referred to as the "sugar fund") of more than $800 million that the Free Trade Union Committee was allowed to draw from and spread lavishly to subvert a gallery of European labor leaders to support whatever American policy was demanded of them.
When Marshall Plan funds dried up, Lovestone became more dependent on CIA funding. But the CIA's new director, Gen. Walter Bedell Smith, who had been Eisenhower's chief of staff in Europe during World War II, was a tough administrator who started questioning the expenditures for the AFL's clandestine operations.
To clarify the relationship, a "summit" meeting was held on November 24, 1950. In attendance for the AFL were Meany, Dubinsky, Woll and Lovestone. The CIA was represented by Smith, its director, and his top assistant, Frank Wisner.
There was general agreement that the collaboration had worked well and should continue. But Lovestone, while complimenting the CIA for the assistance it had given the AFL in several emergency situations, still insisted that improvements had to be made in the relationship. He had given the CIA a list of the funding he required for special projects, but it had been ignored. Smith said he would review the proposals.
When Smith brought up the idea of including the CIO into the agency's operations, the AFL group quickly voiced their strong objections. They said he CIO was inexperienced in this kind of activity and was riddled with communists and other undesirable elements. Lovestone said that if the CIO were brought in, all their work would be placed in jeopardy. The CIO could not be trusted to maintain the secrecy that was required by both the AFL and CIA operations.
Meany said he was worried that the CIO would get some of its friends in the Truman administration to recommend that they share equally in funding and participation in international labor activity. (Just a few months earlier, the CIO had expelled eleven international unions with over one million members for "following the Communist Party line.") Meany threatened to withdraw from the arrangement with the CIA if the CIO were brought into the partnership.
But to Smith and Wisner, it seemed absurd to work closely with one wing of the labor movement while totally ignoring the other. The best that the AFL guests could get out of them was that enlisting the cooperation of the CIO was not imminent.
The propriety of an American labor movement becoming the instrument or partner of a government intelligence agency was fully acceptable to the Meany-Dubinsky-Woll trio, as long as it was in the service of an anti-Soviet crusade and the defeat of communist-led unions. Nor did any U.S. union leader dare to challenge the clandestine, quid pro quo relationship between organized labor and the international spy agency.
It was Thomas Braden, an assistant to CIA director Allan Dulles, who became the contact man with the CIO. Walter Reuther, the UAW president, received $50,000 in cash from Braden, who flew to Detroit to deliver it.
There are no public records of how much money the CIA gave both branches of the labor movement. There was no congressional oversight of the agency. As Braden said: "The CIA could do exactly as it pleased. It could buy armies. It could buy bombs. It was one of the first world-wide multinationals."
