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The National Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 exporter Winter 1985 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Welcome to The National Reporter W ith this issue, The National Reporter makes its debut as the successor to Counterspy magazine. The National Reporter will incorporate the best of Counterspy while expanding the magazine's vision to address a wider range of the pressing issues facing the United States and the world at large. The National Reporter will continue to report on the CIA and the intelligence agencies. These agencies' demonstrated capabilities to undermine the existence of the U.S. as a constitutional democracy makes such coverage essential. At the same time, we shall cover U.S. domestic and foreign policies and take on such issues as nuclear weapons, threats to the environment, the national deficit, the debt crisis, and corporate abuse and corruption. We shall also suggest with each issue constructive solutions and options. We emphasize the word "suggest" because we eschew rigid dogmatic philosophies, and we welcome input and criticisms from you, our readers. Our coverage will be based on well-documented, in-depth investigations. These raw reports will then be put into articles which will take into account the human and personal elements in these stories when feasible. We should mention that our reporters have proven journalistic credentials. They have worked as reporters, investigators, and consultants for CBS, ABC, Cable Network News, National Public Radio, Canadian Broad- casting Company, and the British Broadcasting Corporation, both television and radio. Our reporters have written for, and/or contributed to, every major publication in the U.S. and Europe including: the New York Times, the Washington Post, the Wall Street Journal, Newsday, the Boston Globe, the Philadelphia Inquirer, the San Francisco Examiner, the San Francisco Chronicle, the Los Angeles Times, the Des Moines Register, the St. Louis Post Dispatch, the Associated Press, United Press International, the International Herald Tribune, the Toronto Star, the Manchester Guardian, the London Times, Le Monde, and Le Monde Diplomatique. The National Reporter journalists have received several reporter awards; they have authored many books and studies, and editor John Kelly is chair of the Intelligence Study Group of the American Political Science Association and a correspondent for the AfricAsia magazine. This first issue of The National Reporter takes a special look at South Africa. In recent months, the anti- apartheid movement in the U.S. has been re-ignited with strong protests cropping up across the country while divestment campaigns continue. So it is particularly fitting to present Murray Waas' article which exposes apartheid's agents and operations in the U.S. and even in the media and on Capitol Hill, all aimed at buying a better public image for South Africa. Awareness of these facts may help prevent the South African govern- ment from secretly undercutting the anti-apartheid movement. But despite anti-apartheid activists' best efforts to push the South African government to change, as Robert Shephard's article reveals, South Africa has an invaluable fallback. Gold, as the article documents, is the lin- chpin of apartheid, providing 21 percent of state revenues. This fact means it may be necessary to boycott South Africa's gold or affect its price on the market, before South Africa will give up its racist system of apar- theid. This possibility, of course, has to be weighed vis-a-vis the price to Black workers in South Africa and the sacrifices such an action would require. Also in this first issue, John Kelly - using secret U.S. government documents - reports on the militariza- tion of Honduras by the Pentagon. Josh Cohen also looks at Central America, pinpointing the warlike and dehumanizing policies and activities of the U.S. government there. Cohen then presents a concrete, alternative course for Central America which could benefit the peoples of both Central America and the U.S. But The Na- tional Reporter does not consider Cohen's presentation the last word on the terrible crisis and suffering in Cen- tral America. For that reason, we welcome reader responses. These two articles provide a model for The Na- tional Reporter's exposes: hard documentation (in Kelly's article, the U.S. government's own secret words) coupled with constructive options for public debate. We're excited about The National Reporter and hope you check us out and let us know what you think! A note to our subscribers: The National Reporter will be sent to you for the full term of your subscription to Counterspy. We would also like to thank those who generously contributed last month in response to our appeal for financial help. 2 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Editor John Kelly Board of Advisors Dr. Walden Bello Congressional Lobby Director, Philippine Support Committee John Cavanagh Economist Dr. Noam Chomsky Professor at MIT Peace Activist Dr. Joshua Cohen Assistant Professor, MIT Joan Coxsedge Member of Parliament State of Victoria, Australia Konrad Ege Journalist Ruth Fitzpatrick Member, Steering Committee of the Religious Task Force on Central America Dr. Laurie Kirby Professor City University of New York Tamar Kohns Political Activist Annie Makhijani Chemistry Student Dr. Arjun Makhijani Consultant on Energy and Economic Development Murray Waas Journalist Martha Wenger Journalist Design Rose Marie Audette The National Reporter P.O. Box 647 Ben Franklin Station Washington, D.C. 20044 Winter 1985 The National Reporter Vol. 9 No. 1 FEATURES 12 24 28 31 36 Destructive Engagement: Apartheid's Secret Propaganda Campaign against the U.S. by Murray Waas South Africa has conducted a secret campaign to buy itself a better image - through illegal campaign contributions, front organizations, jaunts to South Africa for U.S. Congress members, and by buying U.S. newspapers. South Africa's Golden Armor by Robert Shepherd Apartheid has avaluable buffer against worldwide recession and pressure from other countries to change its ways: gold. South Africa is the world's largest producer. Changing Course in Central America by Josh Cohen Can we effectively redirect U.S. policy toward Central America? We need an alternative that states what we think is right, and not just criticisms of what we know is wrong. Tufts University: StuOmb C,yer Spies by John Roosa Students recently ousted a CIA a4gr,AW, but were then disciplined by the university. Did CIA ties to the wilversity have anything to do with that? Launching the U.S.S. Honduras by John Kelly Secret U.S. government documents reveal that the military exercises now taking place in Honduras are really preparations for war. NEWS NOT IN THE NEWS A Zap in Every Pot 5 An Offer They Couldn't Refuse? 7 Thumbscrews for Human Rights 7 Canada's New Spies 10- U.S. Nuclear Strategy: Pied Piper to Armageddon IN REVIEW 40 Inevitable Revolutions: The United States in Central America, by Walter LaFeber. 41 Communists in Harlem During the Depression, by Mark Naison. The National Reporter Winter 1985 3 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 A Zap In Every Pot By Kitty Tucker T he Department of Energy (DOE) wants to play the fairy talc Rumple- stiltskin with a new twist. Rumplestilt- skin turned straw into gold; the DOE wants to turn its nuclear weapons waste into a saleable product by using it for "food irradiation." Food irradiation with gamma sources like Cesium-137 (produced as a by- product of creating fissionable materials for nuclear weapons) was first proposed by the Atomic Energy Commission and the military in the late 1950s. Initial ef- forts to sterilize food and preserve it for years for military use had to be abandon- ed because of adverse effects on the flavor, odor, texture and appearance of foods. At the time, optimistic nuclear promoters claimed they could build nuclear powered airplanes and heat homes with nuclear furnaces that would even melt snow off the sidewalks. But at the time, the food processing in- dustry was not interested, so most research and development had to be sup- ported by the military or various atomic energy agencies. The recent EDB problems, leading to the withdrawal of its use as a food preser- vative, seemed an ideal opportunity to promote food irradiation as a substitute for chemical processing. Margaret M. Heckler, Secretary of Health & Human Services, approved proposed Food and Drug Administration (FDA) regulations for publication on February 14, 1984. This proposal will eliminate the irradia- tion labeling requirements for con- sumers. Apparently, the food industry fears that the public will not want to buy foods labeled as irradiated. The regulations proposed by the FDA would allow the irradiation of fruits, vegetables and grains with doses of radia- tion up to 100,000 rads. A dose of about 400 rads is enough to kill half of the peo- ple exposed to it. These doses will inhibit sprouting in onions or potatoes and kill insects in the foods, though they are not high enough to sterilize the foods. Critics of the proposal have raised concerns about the safety of eating irradiated foods over a lifetime, potential en- vironmental impacts, and safety in the radiation industry. Under current regulations, food ir- radiation is treated as a food additive. Labels are required to state "Treated with ionizing radiation" or "Treated with gamma radiation." The FDA pro- posal would eliminate labeling re- quirements, legalizing the secret irradia- tion of our foods. Cautious consumers would be unable to avoid irradiated foods. Questions have been raised about the Under a proposed Food and Drug Administration regulation, food irradiated in facilities like the one above will be sold without a label warning consumers they are buying irradiated food. research on the safety of food irradia- tion. Some studies, for example, have shown problems in test animals used in these studies. For over 25 years, the U.S. govern- ment, principally through the U.S. Army Quartermaster Corps, performed the bulk of the research on irradiated foods. In April 1984, Sanford Miller, the food safety chief of the FDA, told the Research and Development Association (a private group which processes food for the military) that only three studies done over the past 25 years by the Army on sterilizing meats met FDA criteria for ac- ceptable research. Even these three studies were questionable, according to Miller. The credibility of the research on food irradiation is of particular concern because many of the studies were done by the Industrial Bio-Test Laboratories, Inc. (IBT). In 1983, IBT officials were found guilty of defrauding the govern- ment in drug research. The government uncovered such problems as the lack of routine analyses, premature deaths of thousands of rodents due to unsanitary lab conditions, faulty record keeping, and suppression of unfavorable findings. Earlier, on October 7, 1977, the Army declared two out of three IBT animal feeding studies in default. At the time, IBT held contracts totalling more than $8 million for animal feeding studies on beef, ham, and pork. Thus, the data from these two studies on the effects of eating irradiated foods were useless. The third study which was not held in default found reduced numbers of offspring, decreased survival of weaned offspring, and greater numbers of tumors in animals fed irradiated foods. Even this study was flawed with poor record keep- ing. In effect, this leaves unanswered the vital question of the deleterious effects of eating irradiated foods. At the FDA proposed levels of irradia- tion, there should be no induced radia- tion in foods. But irradiating foods at sufficiently high energy levels with machine sources of radiation can make food components radioactive. Moreover, studies conducted in India revealed that irradiation of foods stimulates the production of aflatoxins in the foods. Some aflatoxins are known to be up to 1000 times as toxic as EDB and are potent cancer-causing agents. This 4 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 fording seriously questions the suitability of replacing EDB with food irradiation. There is, futhermore, the danger aris- ing from greatly increasing the volumes of highly dangerous radioactive byproducts on U.S. highways near population centers and food growing areas. For example, there are plans to build a food irradiator in Hawaii at the Honolulu International Airport. One food irradiation facility using a 3 million curie radic esium source could have a radiation through-put every five years of 450,000 curies going in and out of the plant. This is about five times greater than the total volume of low-level radioactive wastes generated in 1981 in the U.S. from all sources. This is a par- ticularly critical problem in the absence of effective regulation by the Nuclear Regulatory Agency, the Department of Transportation, and the states. Concern over this problem has prompted over 200 local communities to ban or restrict nuclear cargo transportation in defiance of federal preemption. ' Widespread use of large quantities of radioactive materials will also increase the hazards faced by workers in the food processing industries. ICI worker at Radiation Technology in New Jersey ac- cidentally opened the door to a radiation chamber for sterilization of medical equipment - in 1977 and _ received a dangerous dose in excess of 200 rads. The accident occurred because management violated license requirements to use in- terlock _and safety devices. The same company was cited by the Nuclear Regulatory Commission for dumping radioactive garbage with the regular trash, failing to set up access barriers to protect workers, and allowing radioac- tive isotopes to leak into pool water. State officials also charged Radiation Technology with contaminating local water supplies with toxic chemicals. With so many questions about the in- tegrity of those researching 1fobd irradia- tion, as well as those who carry out the actual process, extreme caution in mov- ing forward on food irradiation is the most prudent course. But with Secretary Heckler favoring the food irradiators, consumers may have to look toward Congress for protection from the com- bined efforts of the Reagan administra- tion, the nuclear weapons producers, and the radiation industry. ^ y Tucker is the president of the Kitt Health and Energy Institute. She testified before the House Agriculture Subcom- mittee on Department Operations, Research and Foreign Agriculture regar- ding food irradiation on May 9, 1984. One of the founders of the Karen Silkwood Fund, she is also an attorney in the District of Columbia. An Offer They Couldn't Refuse? by Angus Mackenzie An agreement between the Central In- telligence Agency and the American Civil Liberties Union has prompted Con- gress to shield CIA "operational files" from the release requirements of the Freedom of Information Act (FOIA). Reagan signed it into law Oct. 15, 1984. Passage of the CIA Information Act is the first legislative victory in this ad ministration's four-year effort to control embarassing leaks and to limit the FOIA. Democrats and civil libertarians, in an eyebrow-raising alliance, supported the measure that permits CIA boss William Casey to "designate" which of his "operational files" will be exempt from FOIA-mandated search and release. Congressional staffers voiced surprise at the strong bipartisan support for CIA boss Casey's bill, noting that Casey, who was Pres. Reagan's campaign manager in 1980 then spied on the Democrats. Democratic ' support of the measure also appeared to conflict with the 1984 party platform regarding the FOIA, which says, "We will rescind Reagan Ad- ministration directives imposing undue burdens on citizens seeking information about their government through the FOIA." Democrats and the ACLU said they support the law because it would cover up little significant information. But historians and intelligence-beat reporters said it will allow the CIA boss to put in "operational files" those documents he wishes to hide. Congressional sources said the proposed law depends on the good faith, of the CIA for implementa- A new law will allow the CIA boss to put in "operational files" documents he wishes to hide from release under FOIA. lion because judicial review of agen- cy's actions are limited. Democrats put teeth in the FOIA in 1974 after intelligence-agency abuses came to light in Watergate. That law makes all federal agencies, including the CIA, search, review, and release data in response to requests by individuals. Intelligence sources, methods, and na- tional security information have long been exempted from release. The 1984 law, drafted by the CIA, ad- dressed the agency's complaint that it is required to review requested files even though the information in them ultimate- ly was seldom released. This review of documents to be kept secret wastes CIA officers' time. And breaks down com- partmentalization of agency records which threatens security, according to the CIA. The new law exempts CIA_ "opera- tional files" from that search and review process which has freed some useful in- formation to reporters. One investiga- tion that may be affected by the new law regards President Kennedy's assassina- tion, according to Reader's Digest writer Henry Hurt. Mr. Hurt's concern was confirmed by a CIA document released to Senator Leahy and inspected by this reporter. It listed cases that "may be af- fected" by this measure, and those linked to the JFK assassination were included. Opponents in Congress, led by Rep. Ted Weiss, (D-N.Y.), said if this bill had been law, the public would not have known about CIA abuses that have come to light in recent years, including the agency's long-term involvement in the National Student Association and infor- mation concerning the 1954 Guatemalan coup. In 1979, then-CIA Deputy Director Frank Carlucci first submitted the The National Reporter Winter 1985 5 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 "operational files" exemption to Con- gress, dropping the CIA's previous de- mand for a total FOIA exemption. He called for exemptions from review for CIA information ' on counterintelligence, foreign intelligence, security liaison arrangements and checks on potential sources. These were the ex- emptions enacted this year. Individuals may still request "opera- tional files" on themselves. Nonopera- tional files will still be searched, reviewed and be considered for release under the new law. At first, the ACLU stopped Carlucci's proposal. The ACLU's legislative direc- tor told Congress in 1981: "What is the public to make of this when confronted with reports of a proposed Executive Order authorizing the CIA to carry out broad domestic security functions? Why should Congress accept this `trust us' ap- proach to CIA accountability?" The Executive Order number 12333 authorizing CIA domestic activities was signed by President Reagan on Dec. 4, 1981: Nevertheless, in 1993, the ACLU began to change its stand. ACLU at- torney Mark Lynch told then-CIA Depu- ty General Counsel Ernest Ma Weld that the ACLU would "consider" theex- enption, said both parties to this reporter. After that agreement, the CIA submitted its proposal to Congress. The Deal In exchange for ACLU support, the CIA agreed to speed its processing of FOIA requests, now delayed two-to- three years. And the agency promised not.. to reduce its FOIA labors for two years. Further, it would seek no total FOIA ex- clusion during this administration. Morton Halperin, who had served Henry Kissinger on President Nixon's National Security Council, who now heads the ACLU National Security Pro- ject, helped ACLU lawyer Lynch negotiate the ACLU-CIA deal, accor- ding to ACLU sources. In September 1983, Halperin- publicly denied cutting such a deal. Senate approval. came rapidly, on Nov. 17, 1983. On May 10, 1984, in hearings before the House Governments Operations Committee, ACLU attorney Lynch for the first time publicly endorsed the measure and encouraged its speedy adoption, and agreed with a CIA spokesman who said it would result in lit- tie loss of information. A retired CIA officer who had handl- ed Directorate of Operations files said at that hearing the proposed law would hide "some 80 to 90 per cent of CIA files," and that "major investigations of the CIA by Congress have been triggered by media exposes bared by information released under FOIA." Medea The press objected to the proposed law. It would "seal forever the informa- tion the public is most interested in," said the Reporters Committee for Freedom of the Press. Those sentiments were echoed by The Newspaper Guild, Society of Professional Journalists and Radio-TV News Directors Association. On May 11, 1984, The New York 7Fmes headlined its report of those May 10 hearings, "CIA and ACLU Support Curb on Information." This triggered a split within the ACLU over its support of the CIA measure. Aau Split In the months that followed, ACLU Northern. and Southern California af- filiates voted to oppose the national ACLU's position. On August 18, at a national ACLU meeting in New York, Meir Westreich of the Southern California ACLU said the proposed law was unconstitutional because it calls for the selective applica- tion of the Federal Rules of Civil Pro- cedure, which governs lawsuits. The bill removes "virtually all discovery tools" in litigation to be filed under it. (Discovery Winter 1985 The National Reporter proceedings in lawsuits are akin to poker players showing cards before deciding who wins.) Westreich told ACLU executives that by exempting the CIA front discovery, the proposed law plays into current con- servative judicial efforts to curb discovery, to protect the government from lawsuits. In response to Westreich, the ACLU had two general counsels review its support; one approved and one opposed support, according to ACLU President Norman Dorsen. Objections also came from other ,quarters. Jim Lesar, an attorney who represents President Kennedy assassina- tion investigators said in a memo to Con- gress that the proposed law would hide CIA records examined by Presidential commissions and the House Select Com- mittee on Assassinations, and that the CIA has wanted since 1965 to hide its files on the Kennedy murder. The bill was sent to the House Government Operations Information Subcommitt a where it was amended to stop a recent Reagan-team effort to FOIA-exempt entire systems of records in many.agencies by using a loophole in the Privacy Act. Subcommittee Chair- man Glenn English's amendment was in- tended to strengthen individuals' rights to inspect CIA and other agencies' records on themselves. On Sept. 10, English's committee reported the bill to the floor for a vote, and concluded, "Instead of reviewing records in operational files on a page-by- page, line-by-line basis, the CIA. will be able to deny most requests for records in these files in a categorical fashion." In dissenting from thht committee report, Rep. Weiss said, "This bill grants a carte blanche exemption from the FOIA for the CIA, under the guise of procedural reform." He said the bill would render "mean- ingless" the courts' ability to compel the release of CIA documents. When the bill came up for House debate on Sept. 17, Intelligence Commit- tee Chairman Edward P. Boland, (D-Mass), said, "The issue that convinc- ed the ACLU leadership to endorse H.R. 5164 was its judicial review provisions." In opposition, Rep. John Conyers, Jr., (D-Mich.), agreed that little CIA operational data had been FOIA releas- ed, but said, "the scarcity of information only makes that information more valuable." Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 As voting began Sept. 19, Weiss leafletted his colleagues, streaming onto the House floor, imploring each, "Keep the CIA honest. Vote no." Representatives whipped their plastic cards from their wallets into the electronic-voting devices. The CIA won 369-36. Outside the House gallery, CIA official Mayerfeld, who cut the deal with the ACLU, laughed delightedly and received congratulations. Because California ACLU affiliates opposed the CIA measure, the following California representatives voted against the CIA Information Act: Boxer, Bur- ton, Dellums, Dixon, Dymally, Ed- wards, Hawking, Stark and Torres. ^ The author testified against this legisla- tion before the House Government Operations Information subcommittee on behalf of the Newspaper Guild. Thumbscrews For Human Rights The Reagan Administration has raised torturers from the dungeon chamber to the open market. The June 15, 1984 commodity control list indicates that one may apply for a license to export "specially designed implements of tor- ture." According to the Commerce Depart- ment, torture implements were added to the commodity controls list under the Administration's "human rights con- trols program." Prior to the listing, manufacturers of torture implements could export them without the knowledge or control of the government. However, the obviously correct solu- tion to this situation was to simply ban the manufacture and export of torture implements. Under the hubris of human rights, there is a second serious deficiency. A validated license is not required for ex- porting implements of torture to Australia, Japan, New Zealand or members of NATO. Why? Because these 5999B Saps; specially designed implements of torture;. straight jackets; police helmets and shields; and parts and accessories, n.e.s. Controls for ECCN 5999B Unit: Report in "S value," Validated License Required: Country Groups QS- TVWYZ. A validated license is not required for export of these commodities to Australia, Japan, New Zealand, and members of NATO. GLV $ Value Limit: $0 for all other destinations. Processing Code: CM. Reason for Control: Crime control (foreign policy). countries are not violators of interna- tionally recognized human rights. The glaring exception to this is NATO member Turkey. According to the Americas Watch Committee, the Helsinki Watch Committee, and the Lawyers Committee for International Human Rights: "The military junta in Turkey, since the 1980 coup which brought it to power, has egregiously violated the human rights of its citizens." Including "the arrests and torture of many thousands of Turkish citizens..." Moreover, why would any country want to import implements of torture? What application do they have other than the violation of human rights? The 'Commerce Department claims that no licenses have been granted for the export of torture implements.. But, the Commerce Department would not know if torture implements had been shipped to Europe on their way to South Africa-where the Commerce Depart- ment recently okayed the shipment of shock batons to South Africa's police.^ As this item from the June 1984 commodity control list shows, the Reagan administmdon has made it legal to ex- port torture in- struments - supposed- ly to Improve the government's ability to further human rights. Canada's New Spies by George Martin Manz F or decades, successive royal com- missions in Canada investigating security matters have recommended the establishment of a civilian security agen- cy. It wasn't until June that the recom- mendation was passed into legislation. When the 1969 MacKenzie Royal Commission on security suggested the Royal Canadian Mounted Police (RCMP) Security and Intelligence Branch be divorced from the RCMP-and run as a civilian security agency, the RCMP strenuously lobbied against it. Realizing it was outflanked, the government compromised. Canada's spies got a more separate structure, a civilian director general, and a new name - the Security Service (SS). A small but growing number of civilians entered the SS. The process of "civilianization" had begun. The 1981 McDonald Royal Commis- sion, however, revealed widespread lawbreaking by members of the SS. It, too, suggested the establishment of a civilian security service separate from the RCMP. Following the publication of the McDonald Commission's report, the federal government decided to act on the recommendation and put the process in motion. Security and Intelligence Transi- tional Group (STIG) was formed in August 1981 to prepare position and discussion papers which led to the preparation and drafting of Bill C-157 - the bill to establish a civilian security agency. But the bill was soundly condemned by almost all sectors of the Canadian population and eventually it was withdrawn. Bill C-9, a slightly altered version of Bill C-157, establishing the Canadian Security Intelligence Service (CSIS - pronounced Ceesis) was pass- ed by the House of Commons on June 21. It was opposed by groups ranging from the Vancouver Coalition Against CSIS, the Canadian Civil Liberties Association and most churches, to the provincial Attorneys General, the Cana- dian Bar Association and the Canadian The National Reporter Winter 1985 7 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Medical Association. In order to pass Bill C-9 before the summer recess, the Liberal government invoked closure, cut off debate in both the House of Com- mons and the Justice and Legal Affairs Committee and opposed opposition amendments. The long and acrimonious debate on the bill raged for days in the House. Shortly after 5 a.m., the morning of June 21, it was all over. The bill was passed. Bill C-9, a 47-page document contain- ing 96 clauses, will fundamentally affect the rights and liberties of generations of Canadians. It constitutes the most dangerous attack on Canadian civil fiber- ties since the infamous War Measures Act was invoked in the fall of 1970. A few of the main "highlights" from the bill will illustrate why. Slft 1* door as dill Nbarliss Clause 2 defines "threats to the securi- ty of Canada" in a very vague manner. 2(b) defines it as "foreign influenced ac- tivities within or relating to Canada that are detrimental to the interests of Canada and are clandestine or deceptive or in- volve a threat to any, person." This definition can be interpreted in various ways and therefore allows CSIS to make, its own mandate. For example, Cana- dians who seek to halt trade between a repressive foreign government that has trading relations with Canada (such as El Salvador or the Philippines), could be in- vestigated because the suspension of trade could be interpreted as being "detrimental" to Canada's interests. Ac- tivists planning a demonstration against a foreign official could be investigated if they have a private meeting to plan the demonstration. That could be defined as "clandestine." Canadians need not be afraid of the new spy agency breaking the law as the Mounties did in the 1970s.. Many of those crimes will now be legal. In 2(c), raising funds for South African or Guatemalan rebels would be illegal because these funds support "acts of serious violence... for the purpose of ,achieving a political objective within Canada or a foreign state." . In 2(d), a group secretly planning to occupy a government office in order to get media coverage for their grievances could be investigated because they com- mitted trespass, "a covert ur4lawful act," which could undermine "the constitu- tionally established government in Canada." Warren Allmand (former Liberal Solicitor General) proposed amendments to clause 2 which would have given it a more narrow and precise definition. All- mand was replaced on the Standing Committee on Justice and Legal Affairs because the government realized he would vote with the opposition. Clause 13(3) allows CSIS to enter into arrangements with foreign governments and intelligence agencies and to provide them "with security assessments." This has been secretly going on for decades. It will now be legal for CSIS to share files and information with foreign intelligence agencies such as the CIA. Like the SS, CSIS will primarily be a domestic spy agency but will retain liaison officers abroad. Clause 16 allows CSIS to help the Department of National Defense, the Canadian Security Establishment and the Department of External Affairs to spy on "any foreign state or group of foreign states" or any person other than a Canadian citizen, legal resident or Canadian corporation. In the future, Bill C-9 leaves open the possibility to expand the CSIS mandate or begin a new in- telligence agency which will dramatically increase the collection of foreign in- telligence. Clause 18 makes it illegal to reveal in- formation which identifies informants or "employees engaged in covert opera- tional activities." This clause is aimed at stopping leaks such as former SS agent Robert Samson who revealed SS wrong- doings during the '1970s. Anyone who discloses information can be imprisoned for up to five years. Few, if any, employees will reveal dirty tricks because of fear of imprisonment. Section 21(3) is particularly frighten- ing. It allows CSIS to obtain judicial war- rants to gain access to all files and records such as tax returns, all lawyer, medical, banking and personal records, to wiretap telephones and bug rooms, to open mail, and "to-enter any place." Warrants may be issued for up to one year and are renewable. Warrants will not be difficult to obtain. In 1982, of 1,170 requests for wiretaps, not one was refused. Accor- ding to MP Vic Althouse, "On a per capita basis, there are 20 wiretaps in Canada for every one in the United States." CSIS will not have to obtain a warrant to plant informants in targetted organizations that they wish to spy on. Paid informants will often exaggerate or 8 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 No Comment distort information in order to seem wor- thy of payment. Because informants are often not trustworthy, more than one is sometimes sent to obtain more accurate information. Informants can also become agent provocateurs such as Andy Moxley who planned to occupy the Parliament Hill Peace Tower and then informed on the participants. A iool sss pqpw Op The "review" process consists of two parts: an Inspector General appointed to monitor and review the operational policies and activities of CSIS and the Security Intelligence Review Committee (SIRC) consisting of between three and five members of the Privy Council who are not members of either the House of Commons or the Senate. Both the In- spector General and SIRC must `swear secrecy oaths and have access to all infor- mation except cabinet discussions. Bill C-9's "review" process rejected the McDonald Commission recommen- dation for an all-party parliamentary review committee with the right to see all documents and evidence including cabinet documents. Parliamentary ac- countability will be non-existent. The The National R{Jle Association Is trying to boost the acceptance of guns with glossy ads in widely read magazines like Newsweek featur- ing the "housewife and businesswoman" at right and John Riggins of the Washington Redskins .U.S. and West Germany have elected au- party intelligence review committees. Why not Canada? Obviously, the government does not trust elected of- ficials. Because of its oath of secrecy, SIRC can't blow the whistle on illegal CSIS ac- A new Canadian law, which sets up a civilian security agency, will fundamentally affect the rights and liberties of generations of Cana- dians. tivities to either parliament or the media. It has been revealed that the SS withheld information regarding the surveillance of former NFU President Roy Atkinson from then-Solicitor General Warren All- mand. How can we be assured that CSIS will not withhold information from SIRC? No wonder Allan Lawrence, former Solicitor General in the Joe Clark government referred to SIRC as a "toothless paper tiger." A new era of spying began on July 16 when CSIS took over the cloak and dag- ger business from the SS. Still, the "civilian" dimension of the servicere- mains illusory as approximately 90 per- cent of the RCMP spies joined the new service. CSIS has far-reaching powers which do not adequately safeguard the democratic rights and freedoms of Cana- dians. Canadians need not be afraid of the CSIS breaking the law in the same manner as the SS did in the 1970s. May of their former crimes will now be legal. The CSIS has far greater powers than the SS ever had while Canadians now have fewer safeguards to protect them. The fact that the new security agency's "drag net" is so fine indicates the primary purpose of the "civilian" service may not be to catch alleged spies and ter- rorists at all. With the prospect of the domestic depression deepening and inter- national Cold War tensions escalating, the security service's principal goal may be to stifle all dissent and radical protest in this country. ^ -Reprinted from BRIARPA TCH with permission The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 U.S. Nuclear Strategy. Plea Piper to Ann-A 1Y P. rim. by Arjun MakbJani Immediately after World War II and the atomic bombings of Hiroshima and Nagasaki, the U.S. Joint Chiefs of Staff began a wide-ranging reformulation of U.S. military strategy to incorporate' nuclear weapons in a central role. Top Secret and Secret documents of the Joint Chiefs, now declassified, reveal that they considered the gamut of nuclear weapons uses: from "strike first" against the Soviet Union, to nuclear threats against "vulnerable nations," to ter prizing civilian populations by arousing "primordial fears" about the unknown effects of radiation which people could not see or smell or touch. The Joint Chiefs sought to establish: ? coordination between "intelli- gence," conventional forces and nuclear weapons; ? nuclear strategy for the peitWd of U.S. nuclear monopoly; ? contingency planning and *r a gy in the eventthat some adversary acquired nuclear weapons. Terror of the power of atomic bombs and fears of radiation were to be enlisted in a U.S. military strategy designed to "break the will of nations and of peoples$-': "In the face of.. the bomb's demonstrated power to deliver death to tens of thousands, of primary military concern will be the bomb's potentiality to break the will of na- tions and of peoples by the stimula- tion of man's primordial fears, those of the unknown, the invisible, the mysterious. We may deduce from a wide variety of established facts that the effective exploitation of the bomb's psychological implications will take precedence over the application of the destructive and lethal effects in deciding the issue of war." The use of nuclear threats and ac- tual- nuclear bombings were therefore to be integrated with conventional forces into a -strategy of forcing "vulnerable nations" into submis- sion: "The over-all strategy of major warfare will be"profoundly affected by the advent of the atomic bomb and developments in the field of scientific warfare. It is conceivable that vulnerable nations might be forced to capitulate by, the threat of having their powers of resistance quickly reduced by use of the atomic bomb. Never- theless, conventional forms of warfare almost certainly will be required in ad- dition... thus, advanced bases and areas must be secured for the more ef- fective projection of our own offen- sive operations and to deny advan- tageous areas to the enemy. Such operations will require amphibious and airborne forces with naval and air support and conventional ground forces to occupy and defend the seized areas. We must have available the forces required to carry out these essential operations." Now declassified documents from the Joint Chiefs of Staffs reveal that foreign wry bases were meant to draw nuclear fire away from the U.S. i This policy of threatening non- nuclear countries with nuclear weapons continues to this day. It has been carried even further with the ad- dition of neutron bombs to the U.S. arsenal-bombs which are designed to maximize killing and radiation effects while limiting ' property damage (see Counterspy, Vol. 6, no. 4). The Joint Chiefs of Staff realized, of course, that the U.S. monopoly of nuclear weapons could not continue indefinitely. Even during World War JI, when the Soviet Union was an ally f the U.S. and bore the brunt of the fighting and casualties to defeat Nazi forces, General Groves, the director of the Manhattan Project which built the atom bomb believed that "Russia was the enemy and the project was conducted on that basis." Nuclear war against the Soviet Union has therefore always been a principal aspect of U.S. military strategy. For this the Joint Chiefs prepared a strategy of "offensive-defense which could be waged against any power, nuclear or non-nuclear." The first element in this strategy was "intelligence," officially, to prevent a surprise attack on the U.S. Nothing was to be spared in the effort to create a "thoroughly adequate intelligence system." As a second facet of the "offensive- defense" strategy, the Joint Chiefs sought to expand the definition of an "attack" upon the U.S. to include any military preparations which could then be interpreted as indications of a potential attack upon the U.S.: "If an enemy prepared an attack, overwhelm him and destroy his will and ability to make war before he can inflict significant damage upon us." Third, the acquisition of military bases in foreign countries was central to the strategy of "offensive-defense": "Offensively, it is essential to transport the bomb to the internal vital areas of the enemy nation. The closer our bases are to these areas the more effectively can this be done with a greater chance of success. Defensive- ly, the farther away from our vital areas we can hold our enemy through our possession of advance bases, the greater our security. Furthermore, if our enemy is forced to penetrate a defensive base system in depth, the greater are our chances of adequate warning, interception and destruction of the attacking force. All of this points to the great importance of ex- panding our strategic frontiers in the Atlantic and Pacific oceans and to the shores of the Arctic." Five years after that statement, after the U.S. had acquired bases across the world from West Germany to the Philippines, a Joint Chief of Staff docu- ment declared that their acquisition of these bases "had been dictated largely by atomic weapons considerations." 10 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 U.S. government propaganda after World War II proclaimed that the U.S. would protect its allies with a "nuclear umbrella." This was supposed to mean that the U.S. would treat any attack upon its allies as an attack upon itself. While the policy was literally true, the implica- tion that the policy was meant to protect the allies from nuclear attack was false. Not only that, the documents indicate that the "nuclear umbrella" might have been a deliberate deception. - According to the Joint Chiefs' docu- ment, the foreign bases were meant to draw any adversary's nuclear fire away from the U.S.-at least in the initial period of the war and perhaps throughout the war. An implicit but clear corollary of this strategy was that destruction on the U. S. "homeland" was to be minimized by increasing the likelihood of destruction in the countries where the U.S. bases and anchorage areas were located. Far from protecting its allies, the "nuclear umbrella" was thus designed to make them the targets of weapons which would fall onto their ter- ritories instead of the U.S. This cynical policy was the result of the close study by the U.S. military of the atomic destruction of Hiroshima and Nagasaki: "We can form no adequate mental picture of the multiple disaster which would befall a modern city, blasted by one or more atomic bombs and enveloped by radioactive mists. Of the survivors in the contaminated areas, some would be doomed by radiation sickness in hours, some in days, some in years. But, these areas, irregular in size and shape, as wind and topography might form them, would have no visible boundaries. No survivor could be certain he was not among the doomed and so, added to every terror of the moment, thousands would be stricken with a fear of death and the uncertainty of the time of its arrival." Thus the same reasoning which led the Joint Chiefs to believe that other nations could be terrorized into submission by nuclear threats gave rise to a basing policy which was to minimize the bomb- ing of U.S. cities at the expense of its allies. While some aspects of the U.S. strategy have changed with the introduc- tion of intercontinental missiles, its spirit as well as many of its essential details re- main in place. Counterspy has documented and extensively analyzed the recent reformulation of U.S. first strike policy and the country's renewed quest for nuclear superiority over the Soviet Union (Counterspy, Vol. 6, no. 4; Vol. 7, nos. 1 and 2). It is important to note that the basing of first-strike Pershing II missiles in West Germany and the crea- tion of a first-strike submarine missile force (including the Trident II and D-5 missiles) are fully consistent with the policy of using U.S. bases as launching points for a surprise attack on the Soviet Union. The U.S. first strike weaponry fits in well with the following declared U.S. plans to "prevail" in an all-out nuclear war: ? the use of Pershing 11's as a "decapitation" force to eliminate Soviet command centers (and many cities); ? the nearly simultaneous elimination of most Soviet landbased missiles using MX and some Trident II, D-5 missiles; ? the use of forward-based naval forces in the Northeastern Pacific and in the Baltic to eliminate much of the Soviet navy in or close to port. Since the Soviet Union would still have considerable nuclear forces left, a policy of basing other parts of the nuclear war arsenal such as cruise missiles abroad, as well as very dispersed naval anchorage areas and command and intelligence centers, would force the Soviet Union to direct much or most of the remaining weapons to these U.S. foreign bases to try and reduce the scope of follow-up at- 'Enough Is NOT..nought' tacks on the Soviet Union. It is in this context that the Pentagon apparently seeks to prevent most of the few remaining Soviet missiles from reaching the U.S. by using space-based weapons. Since these "Star Wars" weapons would not be able to prevent a substantial proportion of incoming missiles from breaking through, their in- stallation is inconsistent with a defensive strategy: a point that the most ardent nuclear warriors must admit. The Soviet leadership is, to be sure, aware of these possibilities. The Soviet Union has often said it would go into a "launch-on-warning" posture if threatened with a first strike. It has begun to deploy long range cruise missiles and will likely develop countermeasures to the "Star Wars" weapons. The U.S. government's nuclear strategy rose from a cynical policy of making other people targets in an age of overwhelming U.S. nuclear superiority and very few nuclear weapons in the Soviet Union. The U.S. nuclear strategy has become a suicidal gamble with the lives of the people of the United States. Recently, predictions have emerged that use of nuclear weapons will plunge the world into a "nuclear winter," even should a nuclear war employ far fewer weapons than the Pentagon plans to use in its "protracted nuclear war" and ir- respective of the number of bombs that might fall on any particular country. ^ The National Reporter Winter 1985 11 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 DESTRUCTIVE ENGAGEMENT: APARTHEID'S "TARGET U.S." CAMPAIGN While U.S. protestors., utargeted South Africa's racist system of "apaic~"South Africa has conducted a secret campaign to buy itself a better image through illegal campaign contributions, front organizations, jaunts to South Africa for U.S. Congress members,. and by buying U .S. newspapers. ometime in the spring of 1976 four men attended a secret meeting in Pretoria, the capitol of South Africa. The four men were longtime intimates, the most powc4ul men in South Africa. They included then South African Prime Minister John Vorster; Minister of Finance Owen Hor- wood; and the Minister of Information and Interior Connie Mulder, then thought to be Vorster's "heir appareiWw' the man most likely to succeed him as of the South African government, the main topic of discussion ' was then- Senator John Tunney (D-Cal.), con- sidered by the South Africans to be one of their most formidable adversaries on Capitol Hill. Baron told the South Africans that if they inflated his personal salary by To an outsider, the fourth man atten- ding the meeting would appear strangely out of place. He did not learn about politics in the Afrikaaner meeting halls of Pretoria and the Transvaal. But rather in the backrooms of Brooklyn as a one-time aide to the late Tammany Hall boss Car- mine Desapio. During the spring 1976 meeting in Pretoria, this fifth man, Sydney Baron, was the South African government's 'public relations represen- tative and political advisor in the United States. Among the services Barn provid- ed the South African government was advising them on the fine art of buying political influence in the United States. During the spring 1976 meeting bet- ween Baron and the most senior officials. 12 Winter 1985 The National Reporter $200,000 over the following year, he would see to it that the money would be secretly funnelled into the campaign of Tunny's opponent, Republican S.I. Hayakawa. If his Congressional influence-buying plans were unsuccessful and Tunney was reelected, Baron said, the South African government should Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 not renew the contract with his public relations firm for the following year. The South African officials agreed to provide Baron with the extra $200,000. A short time later, S.E. Hayakawa won a close Senate race against then-incumbent John Tunney. And Baron's contract with South African was renewed. The ugly realities of apartheid (opposite, top) have roused protest from its black victims (left) and Americans. The U.S. anti-apartheid movement has been re-ignited in recent months, with pro- testers picketing the South African embassy in Washington, D. C. every day (above). Two years later, Baron attended another meeting in South Africa with Vorster, Horwood and Mulder. On that occasion they discussed the political future of Senator Dick Clark (D-lowa), whom one South Africa official told me was "our number one enemy in your country." During that second meeting Baron laid out another proposal: if the South Africans inflated his salary by $250,000, the money would be secretly channelled into the campaign of Clark's opponent, Republican Rodger Jepsen. The South African officials approved Baron's pro- posal. And, he was provided with the ad- ditional quarter of a million dollars. In November 1978, Rodger Jepsen defeated Dick Clark in a close race. These plans by the South African government to covertly provide $450,000 in campaign contributions to defeat former Senators Tunney and Clark-reported previously by this jour- nalist-have now been further confirmed in a series of on-the-record interviews with a former South African Secretary of Information, Eschel Rhoodie. According to Rhoodie, Baron never told him how the $450,000 had been ac- tually funnelled into the two U.S. Senate campaigns. Says Rhoodie: ". . . After the first time [providing the $20),000 to Baron in 1978 to help elect Senator Hayakawa (R-Cal.)], I did ask him specifically [how he funnelled the money into Hayakawa's campaign] because I knew the United States better than anybody else inside South Africa, and couldn't believe that this could happen. But you know Baron was the sort of guy who would say, "Look, I told you that if this guy [did not win] his election, I would not be sitting [here] talking to you today. You would have fired me. That was the deal. Wasn't it? So trust me." So I said, "Yes, but I am curious as to how you managed to do it. That's a lot of money. " So he said, "I've used various channels." He said, "I know how to do these things." In Rhoodie's opinion, the late New York public relations man was not true to his word. Says Rhoodie, "I am afraid that my opinion is that Sydney Baron just put that money in his pocket." Rhoodie has no hard evidence to back up his belief, however. He says that he simply does not know what happened to the $450,000 once it was passed to Baron from the South African government. Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Some evidence suggests, however, that the $450,000 in South African funds was indeed funnelled into the two U.S. Senate campaigns. According to another South African official, Rhoodie-who was opposed to the Congressional influence buying plans-was purposely kept in the dark by other South African officials about the mechanics of the Congressional influence-buying campaign because of his outspoken opposition to than. As Rhoodie himself partly explains: I said... I said, you know I am op- posed to this sort of thing. I said I am doing this because it is an order of the Prune hfidKa. I said if it had not been for the orders of the Prime Minister, I would not have done this because I think it is wrong. I was dead set against that right from the begin- ing. You know it is one thing took fluence public opinion, and burying in- to the WaalibWm Star would in- fluence public opinion, but it is another thing to be directly involved in 'the electoral proven of another coun- try. You see... that sort of thing I consider to be a direct intervention in- to the election process and I am against that. Another former official confirms this view: "Eschel,[Rhoodiel was opposed to this whole business right from the.start. He was quite outspoken [about than. For that reason, I think Baron and the others [Vorster, Horwood] purposely kept him in the dark as the plan progressed." This official wan on to say that "there's ab- volutely no way that John Vorster and Owen Horwood would have given Baron that kind of money [$450,000] and not know exactly what was done with it. A man like Vorster does not like to trust anyone. ... he's quite cynical, someone who understands ruthlessness and power... If he approved the transfer of such funds, he would have known what happened to every penny." It was not uncommon, according to Rhoodie and others, for former Prime Minister Vorster to meet with Baron privately, without Rhoodie or others pre- sent. Baron also met privately with other senior South African officialls. And on at least one occasion, Andrew Hat- cher-one of Baron's top aides and previously one of the most senior black officials in the Kennedy Administra don-also met privately with John Votster. Thus, John Vorster could have been kept fully advised as to what was happening to his secret funds, while 14 Winter 1985 Topolshttrbnaeabr=4SouthAfdaabroughtU.S. nsrnberstoSouth Afrim trips; lmnpoonW In this cartoon from the Rand IMF CO" are i under U.S. law. keeping Rhoodie in the dark. Another small part of the puzzle might be provided by a onetime associate of Baron's. The Baron associate remembers having lunch with Baron and another of his top aides, L.E.S. Devilliers, at an ex- pensive New York hotel in the late 1970's. Devilliers was no ordinary employee of the Baron firm. Previously, he had been Rhoodie's top deputy and right hand man aae the South African Depart- ment of Information, the only other in- dividual at the Department who knew all the details of theSouth African govern- ment's influence buying activities. Devilliers was well qualified when-he applied to work at Baron's firm, being at one time one of the top propagandists in the South African government. It is unknown, however, if there was another factor Baron considered when Devilliers approached him about possible employ- ment: Devilliers was one of only a hand- ful of South African officials who knew about the funnelling of $450,000 in South African government funds to Baron to illegally influence the two U.S. Senate campaigns. At the lunch he attended with Devilliers and Baron, remembers the Baron associate, the firm's connections on Capitol Hill inadvertently came up in conversation. The name of Rodger Jepsen was eventually mentioned. "He owes us," the Baron associate remembers Devilliers saying. "We stole that [his election against former Senator Dick Clark] for him. That was ours." At that point, Baron became stonefac- ed and asked to speak to Devjlliers alone. When the two men returned to the table, Baron told his associate, "Discretion is required in our line of work. You unders- tand that. 9 9 The Clark-Jepsen election was never brought up again, least of all by Baron's younger associate. "I did not think it would be helpful in furthering my career there," he wryly told me. There is additional evidence that Baron passed along the $450,000 to Jepsen's and Hayakawa's campaign. In 1978, after reports surfaced in the South African press alleging financial ir- regularities in the Department of Infor- mation, a, South African government committee, called "the Kemp Commit- tee," was set up to evaluate the Depart- ment's projects and decide if they were effective enough to be continued. One project evaluated by the Commis- sion was the Department of Information's hiring of the Sydney Baron Company as its public relations representative in the U.S. Both Sydney Baron and L.E.S. Devilliers gave infor- mal testimony before the Commission arguing that it would be in the best in- terest of the South African government to continue retaining the firm. With tape recorders running, both Baron and Devilliers boasted to Commission of- ficials about their roles in secretly fun- nelling $450,000 of South African funds into the campaign coffers of Senators Hayakawa and Jepsen. As the former head of the Department The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 of Information, Eschel Rhoodie was allowed to attend those sessions, he recalls: They [Baron and Devilliers] in front of Brigadier Kemp and two other officials of the Bureau of State Security, [who were] then evaluating these projects, said that is what happened [the money was passed on). After Baron and Devilliers testified about their role in passing along the il- legal campaign contributions, the South African government renewed Baron's contract for another year. Continued Rhoodie: They [the Kemp Committee] evaluated this and then sent [a] report up to the South African Security Council. The Security tative in the United States. As a one-time aide to the late Tam- many hall boss, Carmine Desapio, Baron had a front row seat to one of the most corrupt political machines in this country. In 1961, Baron's name surfaced in a report prepared by the New York State Commission of Investigation, which was looking into corrupt prac- tices surrounding the awarding of New York municipal contracts to elec- trical firms. The Commission charged that New York City's water commis- sioner at the time had attended a meeting in Baron's office where representatives of a Chicago electrical fixture firm were told that city con- tracts could be obtained if the firm hired Baron. The Chicago firm declin- Ecchd Rhoodk (left) vents the chief engineer of South Africa's secret propaganda campaign under former Prime Mbdster John Vorster (right). Council was then chaired by the present Prime Minister and by [the rest of the ministers, including the ministers of defense, justice, and foreign affairs]. They approved Baron's contract again for the next year and I know [that] for a fact, because it was tape recorded. here is no doubt that Sydney Baron was capable of making il- legal campaign contributions on behalf of the South African government. An examination of his career shows that he and his firm have been involved in questionable ac- tivities before, during, and after he was South Africa's public represen- ed the offer. A competitor accepted the offer and subsequently obtained a New York City municipal contract. The Commission also alleged that Baron's Scarsdale home was rewired at a very discounted price by another electrical firm on whose behalf he had helped obtain contracts with the City of New York. Besides representing the South African government in 'the U.S., Baron has also done public relations work in this country for the repressive governments of Taiwan and the Dominican Republic. Among his responsibilities was white washing reports of human rights violations in those countries. When Baron became South Africa's public relations representative in the U.S., he did not leave the lessons he learned from Tammany Hall behind. Besides secretly funnelling the $450,000 into U.S. Senate campaigns, he also provided a number of other questionable services for his South African friends. Even the Vatican was not beyond the reach of Baron's activities. Accor- ding to a former Baron associate, South African officials asked Baron to set up meetings between them and high level Vatican officials as part of a clamp down on anti-apartheid, South African Catholic priests operating in South Africa. The man who arranged contacts with Vatican officials was Thomas Deegan, a New York public relations man who was one of the Vatican's most decorated laymen in the United States. Some of Deegan's activities are described in an August 17, 1976 memorandum sent from Deegan to Baron. Wrote Deegan: My mission to both London and Brussels relative to the Anglican church and the Vatican was successful. In both areas, the ground work is being laid at high levels before bringing together at the summit level counterpart chur- chmen of the Dutch reformed church, the Vatican and the Anglican church, separately... There were three other highly- placed clerics whom Deegan felt must be approached-all with a view to set- ting up a meeting between the Vatican Secretary of State and leaders of the Dutch Reformed Church. As I told you in our long distance telephone conversation the day after my return, I think it is indicated that I will have to go back to both of these bases before long and, from a political stand- point, in a visit with the principals in South Africa. When shown a copy of the memorandum, Rhoodie confirmed that Deegan and Baron set up a meeting at the Vatican for him in 1976 with Cardinal Casaroli, the Vatican Secretary of State. Later the same year when Casaroli was ill, Deegan and Baron set up another meeting for Rhoodie with Cardinal Giovanni Benelli, the Archbishop of Florence and then Acting Vatican Secretary of State. The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 months, the Congressman who had so aron died in 1979. The follow- often been successfully lobbied by B ing year, his firm's contract Baron's firm, joined the company on with the South African govern- January 5, 1981. According to Justice ment was terminated but that Department files, Wolff s new salary did not stop his firm from engaging in was to be $50,000, a year. questionable activities. - Four months later, the Baron After losing its'South-African con- firm-with the staff supplemented by tract, Baron's firm stepped up its the former chairman of the House. business with two other, foreign Foreign Relations Subcommittee on clients-Japan and Taiwan. One of Asian and Pacific Affairs- signed a the members of Congress the firm new $350,000 per year contract to be often lobbied was then-Representative Taiwan's official lobbyist in this coun- Lester Wolff (D-N.Y.), Chairman of try. . the House Foreign Relations Subcom- mittee on Asian and Pacific Affairs. According to Justice Department A Coral Na records, representatives of the Sydney outh Africa's campaign to in- S. Baron Company arranged meeting fluence.U.S. policy did not between Wolff and members of begin-or end- with hiring the Japan's Parliament, the Diet, in 1979 .Sydney S. Baron Company. In and 1980, and brought a Japanese fact, during the last decade, the Republic electronic industry delegation to see of South Africa has engaged in a massive Wolff and other Representatives in covert war in the United States. 1980. In 1979, Wolff also met with In the past, foreign nations have Baron representatives and their engaged in wars against the United States Taiwanese clients during a trip to the with soldiers and on battlefields. The Island. That same year, according to prices of those wars have'been great. But, the Justice Department files, Wolff in the end, the United States has come met on October, 23 and November 8 away with its political sovereignty and with a Baron official in Washington, rights of self-determination for its D.C. to discuss the Taiwan Relations citizens. Act. South Africa, however, has been able In November 1980, Wolff lost,a bid .. to accomplish what no other foreign na- for reelection. Within a couple of lion has managed to do against the U.S. 16 Winter 1985 The National Reporter This memo from prom! new Catholic Thomas Deegan to South Af 's ' publc reb= dons" consulumt, . Sidney Baron, reveal, the Vatican connection to the apartheid mime. in a conventional war. While not a single shot was fired and the American people never knew such a secret war was even being waged, the right to self- determination of millions of Americans may have been diminished. For if $450,000 of South African funds were secretly funnelled into the 1976 Califor- nia and 1978 Iowa Senate campaigns, then the South African govern- ment-and not the people of California and Iowa-may have determined who became U.S. Senators. But the secret transfer of South African funds into the U.S. electoral pro- cess is only a small part of the. South African government's covert war against the United States. A two year investigation of that covert war and the South African government's influence buying activities in this country has been conducted by this reporter. More than a hundred individuals have been interviewed. Three former South African government officials have granted extensive interviews for this arti- cle. One of those officials, Eschel Rhoodie, has agreed to talk on the record.. The result is fourteen hours of taped interviews. Also used in this investigation have been several hundred pages of internal State Department documents and cables. Some of those documents were released under the Freedom of Information Act. Others remain classified. Reports prepared by the Central Intelligence Agency (CIA) and Defense Intelligence Agency (DIA) and quoted in this story are still classified. Justice Department Foreign Agents' Registration files cited in this story are a matter of public record. Also reviewed were dozens of pages of internal records of the South African Department of Information and internal files of two South African front organizations, the Christian League of Southern Africa and the London-based Foreign Affairs Research Institute. Other sources of information were inter- nal files of the Sydney Baron Company and the Panax Corporation, a newspaper firm secretly provided with South African funds in order to buy U.S. newspapers on South Africa's behalf. Among the results of this lengthy in- vestigation: ? Besides giving $200,000 to Sydney Baron in an attempt ' to bring about former Senator S.I. Hayakawa's election in 1976, the South African government illegally funnelled a $2,000 gift to the Senator. The payment was made in the form of an honorarium in July 1978 to Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 As part of its propaganda campaign, South African officials cultivated political leaders such as Paraguayan dictator .Stroessner (shown meeting with Rhoodie, left). At right, Connie Mulder, head of the propaganda ministry meets with then Governor of California Ronald Reagan. Hayakawa from the South African Foreign Affairs Association, a fully- subsidized front organization for the South African government: it is illegal for a member of Congress to accept gifts or money from a foreign government or its agents. At the time that Hayakawa received the illegal $2,000 payment, he was a member of the Senate Foreign Relations Committee and its Subcom- mittee on Africa. Both regularly consider legislation regarding South Africa. The South African government has since admitted publicly that it secretly subsidized the Foreign Affairs Associa- tion. Hayakawa has refused to return the $2,000. ? In a blatant violation of established diplomatic tradition, a South African government official actively intervened in Iowa in 1978 to help get Rodger Jepsen elected to the Senate. According to a State Department cable on the matter: "Over the weekend, the State Department was informed that... while in Iowa recently, a South African government official, Jan Van Rooyen, had publicly made some disparaging remarks about Senator Clark.. . "Van Rooyen misrepresented Senator Clark's position on American investment in South Africa, alleging that Senator Clark had been urging disinvestment. Van Rooyen also volunteered the opi- nion that Iowans were getting the wrong opinion from "Your Senator Clark."' "In addition," said the cable, "Van Rooyen asked Iowans why their Senator finds South Africa such a fine platform rather than dealing with the problems the state might face." Then Deputy Undersecretary of State David Newsom later sent a strongly worded diplomatic message to the South African govern- ment protesting its official's activities as an unwarranted involvement in the U.S. electorial process. ? Fifteen California newspapers- purchased by Michigan newspaper publisher John McGoff entirely with secretly provided South African funds-provided support for Senator S.I. Hayakawa in his 1976 Senate cam- paign. ? The South African government covertly financed more than fifty trips to South Africa for members of Congress and their aides despite the fact that since 1974 it has been illegal for a foreign government to provide such trips for U.S. officials. To surreptitiously circumvent U.S. law, the South African government set up front organizations and utilized front- ment who ostensibly paid for trips. In fact, they were being covertly financed by the South African government. Internal State Department files show that the department knew the South African government had set up the front organizations and was providing the fifty trips to members of Congress and their aides. Though aware that some of the organizations were South African fronts, the State Department did little to warn members of Congress of the informa- tion. In some cases, members of Con- gress were warned by State Department officials during briefings before the trip that the trips were being subsidized by the South African government. But the State Department made no formal notes of the meetings, thus eliminating the possibility of prosecuting members of Congress who accepted illegal free trips. "Some of those conversations are best forgotten any way," one State Department official said in a cable when queried about his personal knowledge of such meetings by another Department official. ? The South African government pro- vided free travel and secretly funneled campaign contributions to members of the House Agriculture Committee in an effort to have them vote higher sugar quotas for South Africa. The South African Sugar Association, which has been secretly subsidized by the South African government, provided more than $8,000 in free transportation and illegal campaign contributions to former Representative William Poague (D-Tex.), then Chairman of the House Agriculture Committee, which was at the time considering adoption of higher sugar quotas for South Africa. ? Former President Gerald Ford was the recipient of $20,000 in honaria from frontmen and front organizations of the South African government. Ford accepted a $10,000 honorarium from Senbank, a South African bank, for speaking at a U.S. conference sup- porting U.S. investment in South Africa. According to Eschel Rhoodie and other authoritative South African sources, the Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Former U. S. President Gerald Ford received an award secretly financed by South Africa. Above, Ford meets with propaganda official Connie Mulder. Below, Rhoodie (left) and director of BOSS General Van den Bergh (second from right) meet with Israel's Prime Minister Rabin (se- cond from left) and Israeli Defense Minister.Shimon Peres (right). South African government was the real source of Ford's payment. On another occasion Ford accepted a $10,000 pay- ment as the first lecturer to speak at the John McGoff Distinguished Lecture Series at Northern Michigan University. The lecture series was financed with secretly provided South African funds. ? The South African government paid bribes to senior officials of the AFL-CIO and the International Longshoremen's Union in exchange for their help in work- ing against a trade boycott proposed by some union officials, according to a former South African official. The money was passed along to the union of- ficials by Dutch unionists. Says the former official: "The Dutch union knew-I won't say that Dutch union, but the Dutch individuals from that union knew and they informed [the] American participants where this came from and why. " Eschel Rhoodie refused to talk about the South African government's bribery of U.S. union officials. However, when presented with the former official's ac- count, he did not deny any of the details of the bribery scheme as described by that official. An internal South African government memorandum, prepared by Eschel Rhoodie for the then-Minister of Information and the Interior, Connie Mulder, refers to the union bribery scheme: The labor union attempt of 1972 to stop the handling of South African goods. With a few exceptions this attempt failed worldwide. The key figure was George Meany in the USA. After appropriate con- tact he took a stand against the attempt and when the Americans did not go along the boycott failed. Two organizations in the USA and certain individuals had been in contact with Meany. Money changed hands. ? A number of senior officials in the Reagan administration have accepted money, favors, and free trips from the South African government. In 1977, the South African govern- ment secretly provided some $40,000 to Miami-based research institute, The In- stitute of Policy Studies, headed by Ret. Lt. General Daniel Graham, the former head of the Defense Intelligence Agency. The secret funds were provided, accor- ding to Eschel Rhoodie, for the Institute to produce an "independent study" espousing the strategic importance of South Africa to the west. Graham has served as advisor on defense policy for the Reagan administration. Ernest LeFever, President Reagan's one-time nominee for the post of Undersecretary of State for Human Rights and Humanitarian Affairs, ac- cepted three all-expense paid trips to South Africa provided by the South African government and its front organizations. LeFever also helped secure the services of former Senator S. 1. Hayakawa to appear at a conference sponsored by the South African Foreign Affairs Association, a South African front group, according to internal South African government files. William Middendorf, the Reagan ad- ministration's Ambassador to the Organization of American States, served on the board of Directors of the Panax Corporation, at a time when that cor- poration was the recipient of $11 million in laundered South African government funds to secretly buy the Washington Star and other U.S. newspapers on South Africa's behalf. Records of the Securities and Exchange Commission also show that Middendorf owned 5,000 shares of Panax stock at the time of the corpora- tion's covert dealings with the South African government. James Edwards, who once served as President Reagan's Secretary of Energy, accepted a free all-expense paid trip to South Africa provided by the South African Freedom Foundation, an entire- ly subsidized front organization for the South African government. And Donald Dekeiffer, the one-time General Counsel to President Reagan's Office of the U.S. Trade Representative, 18 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 was once the South African government's chief paid lobbyist in Washington, D.C. In late 1982, as an of- ficial in the Reagan administration Dekeiffer travelled to South Africa to discuss with officials there the Reagan administration's relaxation of the U.S. trade embargo against South Africa. As South Africa's paid-- lobbyist in Washington, according to documents his firm filed with the Justice Department, Dekeiffer had lobbied U.S. officials to relax the U.S. trade embargo. Dekeiffer later helped implement that policy as General Counsel to the U.S. Trade Representative's Office in the Reagan Administration. ? The South African government pro- vided more than two hundred U.S. jour- nalists with free all-expense paid trips to South Africa. Among those included in the jaunts were some of the nation's most powerful and influential reporters, col- umnists, and newspaper and magazine editors. In almost all instances, the jour- nalists returned to the U.S. to provide favorable news coverage of South Africa. ? The South African government secretly purchased a substantial secret in- terest in a chain of more than sixty newspapers in the U.S. to use as pro- paganda outlets in this country. During 1974 and 1975, the South African government funnelled $11.3 million to Michigan newspaperman John McGoff to secretly buy the Washington Star on South Africa's behalf. When McGoff's bid to buy the Washington Star failed, he used the $11.3 million to set up a South African government front company, Global Communications, Inc. McGoff and Global then purchased (secretly on behalf of the South African government): the Sacrament Union, twenty smaller California newspapers; a 40 percent interest in Panax, Inc., a newspaper chain headed by McGoff which owned more than sixty newspapers around the country; and a 50 percent interest in the United Press Inter- national Television Network (UPITN). ? The South African government agreed to make five $900,000-a year payments totalling $4.5 million to the overseas enterprises of Rev. Sun Myung Moon. In exchange, the church would give the South Africans a substantial secret interest in the church-owned Washington Times. After the Unification Church received the infusion of South African funds, the Washington Times hired a number of in- dividuals with close ties to the South African government. Serving on the The South African government agreed to make payments total- ling $4.5 million to Rev. Sun Myung Moon. In exchange, - the church would give the South Africans a substantial secret in- terest in the church- owned Washington Times. Editorial Advisory Board of the Washington Times is John McGoff. The paper's editor and publisher is James Whelan, previously the vice President and editorial director of McGoff s Panax newspapers while South Africa secretly owned a substantial interest in the newspaper chain. ? The Chairman of the Curtis Publishing Company, Beurt SerVaas financially benefited from gifts and business deals engineered by him for the South African government. During the time the Saturday Evening Post-owned by Curtis Publishing and Ser- Vaas-published more than a dozen pro- South African articles. In 1976, SerVaas and his wife, Cort, the publisher and editor of the Saturday Evening Post, visited South Africa as the all-expense paid guests of the South African government. Later, Beurt Ser- Vaas was made a large stockholder of a South African newspaper, the Citizen, and a director of the South African news photo agency,Afripix. At the time, those two enterprises were secretly owned by the South African government, and Ser- Vaas was awarded the stock and director positions though he contributed no financial investment or work to the two ventures. In exchange for the South African government largesse, SerVaas allowed the Saturday Evening Post to become lit- tle more than a covert propaganda organ for the South African government. ? Besides the activities of Sydney Baron discussed at the beginning of this article, a number of the South African government's paid American lobbyists and public relations specialists have engaged in questionable activities. An employee of Donald Dekeiffer, the former U.S. lobbyist for the South African government, for example, misrepresented herself to gain access to a restricted Congressional briefing on South Africa. And former Senator George Smathers (D-Fla.), who is now Pretoria's chief lobbyist in Washington, has engaged in a number of questionable activities, first as a member of Congress and then as a lobbyist. S" bdo Orl Just days before former South African Prime Minister John Vorster told even his closest col- leagues that he was going to re- sign from office, he held a tightly- guarded, secret meeting with his most trusted cabinet ministers. Sitting to his left at the meeting was General Hendrik Van den Bergh, then the Head of Boss, ft. South African secret police and foreign intelligence service. Across the table from Van den Bergh sat Connie Mulder, then the Minister of Informa- tion and Interior. Mulder was known among his col- leagues as the "Crown Prince," the heir apparent to succeed Vorster as Prime Minister. Vorster had stayed on as Prime Minister longer than anyone had an- ticipated. But Connie Mulder had a good reason to be patient: few political observers in South Africa believed anyone other than Mulder had a chance to succeed Vorster as South Africa's next Prime Minister. The topic of discussion during the two hour meeting was the so-called "Depart- ment of Information" scandal-the largest and most publicized political scandal in South Africa's history. The story of the scandal first began to unravel when the Johannesburg Sunday Times ran a story on its front page revealing that the Secretary of Information at the time, Eschel Rhoodie, and ten friends had taken a government-paid trip to the In- dian Ocean island of the Seychelles. An internal government audit leaked to the SundayErpress described the trip as "ex- travagant" and alleged other financial ir- regularities within the Department of In- formation. South Africa's conservative The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Afrikaans community was shocked that their government officials were wasting money. A "confidential" May 1978 State Department cable sent from the American embassy in Capetown, South Africa to the Department in Washington correctly speculated that South Africa's political establishment would move quickly to stop further revelations about Rhoodie's activities and the Department of Information from surfacing. Said the cable in part: Minister of Information Connie Mulder told Parliment the afternoon of May 3 that he was requesting the Public Service Commission to institute a study of the Department of Information with a view toward totally reorganizing it into an in- dependent agency without cabinet status, similar to the U.S. or British Information Services. Mulder also announced a tem- porary reorganization of the Department, which will involve the 'retirement' of two top officials, Dennys Rhoodie [Eschel Rhoodie's brother] and Administration Officer Waldceck, both of whom have been named frequently in connection with the emerging scandals in the Depart- ment. Mulder indicated that the tem- porary reorganization would not affect Eschel Rhoodie, the Department's Secretary, whose name has also been closely linked with the scandal. Comment: Mulder's announcement was clearly aimed at mitigating the effects of the spreading Department of Information scandals prior to the parlimentary debate on the subject scheduled for May 8... There is considerable surprise that Mulder opted not to dismiss Eschel Rhoodie, against whom there has been mounting evidence of unethical activities, if not corruption. Most parliamentary observers believed that this decision will haunt Mulder, and result in a continua- tion of demanding news stories about the Department. The cable then added that, at least for the time being, details of the scandal were successfully being covered up. "The Sunday Express has agreed for the moment, following a meeting with Con- nie Mulder, not to publish further releva- tions about the Department's activities, on the grounds that the information may be detrimental to national security. At- torneys for the Express are studying the possible implications. Meanwhile, press reports state that General Hendrik Van den Bergh, head of the Bureau of State Security (Boss) on May 2 discussed aspects of the scandal with Mulder and the Rhoodie brothers. Speculation among some journalists is that $30 million in Allegations of corruption in the propaganda ministry sparked a turbulent political scandai; from which P. W. Botha (top) emerged a' Prime Minister. The Erasmus Commission chaired by Rudolph Erasmus (bottom) in- vestigated the influence-buying operations. Defense Ministry funds may have been secretly transferred to the Department of Information for use in influence buying and other overseas activities. This they say, would explain Van den Bergh's in- volvement and the national security aspects of the case which may be invoked by the South African government to pre- vent further revelations. The intelligence information in the State Department was correct. There were undiscovered details of South Africa's influence buying activities overseas-and South African officials would do their best to suppress them. One such official was Eschel Rhoodie, who sent a secret memorandum to Con- nie Mulder describing some of his Department's activities: Information is involved in a propaganda war-it is in the first line of defense and is the Department which has to bear the brunt of the first attacks-attacks on South Africa in the press and on televi- sion. The government is aware of this The National Reporter situation and realizes the need for energetic efforts to counter the attacks. Later in the memorandum, Rhoodie described some of his department's energetic efforts: The Department of Information controls, owns or is directly or indirectly involved in secret with: 5 church organizations in South Africa, the USA, Britain, and Germany 2 front organizations in the USA and Bri- tain each with more than 30,000 members 3 news and photo agencies 2 film production companies abroad 12 regular publications in nine different countries including five in Africa 5 institutes abroad 14 front organizations in thirteen countries 3 book publishing companies 19 fulltime anonymous collaborators in eleven countries 3 public relations organizations in three countries The subsidization of 30 studies and books every year. The production of up to 13 motion pictures in eight countries. During the cabinet meeting, Vorster read aloud from a confidential report prepared for him by Donald Dekeiffer, South Africa's lobbyist on Capitol Hill. Dekeiffer wrote that the U.S. Justice Department was winding up its investiga- tion of the "Koreagate Scandal"-South Korea's efforts, with the help of Tongsun Park to bribe and buy influence with Congress. In the report Dekeiffer noted that the disclosures did more to strain U.S.-South Korean relations than could ever be repaired. If the full details of South Africa's U.S. influence- buying activities were ever known, Vorster told his cabinet officers, the results would be even more devastating. Foremost in his mind were details of the $450,000 in South African funds passed along to Sydney Baron to buy in- fluence in two U.S. Senate campaigns. "I want every single document, every single scrap of paper on this subject destroyed," Vorster told his colleagues "If there is ever a leak on this subject, the security of our country will be at stake." Sweatbeads had started to gather on Vorster's forehead. As he spoke, one observer noticed that his hands seemed to be shaking. It was unusual for anyone to see him ill at ease. For Vorster-a man who like Richard Nixon was at his toughest during crises-was a tough ex- prosecutor and a one-time Minister of Justice with a reputation for ruthlessness. Equally nervous was Connie Mulder. Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 As Minister of Information, he was one of the chief architects- of the U.S. influence-buying activities. And Mulder was in close competition with Defense Minister Botha as to who would become South Africa's Prime Minister. Mulder had good reason to be con- cerned. Forty eight hours before the Na- tional Party's caucus met to decide who would be the next Prime Minister of South Africa, word leaked out that the government commission looking into financial irregularities with the Depart- ment of Information was about to sub- poena Mulder and question him about a secret Swiss bank account he maintained. The leak was devastating. Explains Rhoodie: "Generally speak- ing, if you go into a group of politicians in South Africa and say, 'this judge on the Supreme Court told me that it was going to happen and you have my word of honor that is what he said to me,' everybody is going to believe you. And this is what they did. They believed that Connie Mulder was going to be hauled before the Commission to testify two days after he became Prime Minister and that would have been the biggest scandal in South African history. So they elected Botha because-not because they thought he was the best man, but because they were scared what would happen if Mulder were elected. It was fear that elected him." By only a few votes in the Nationalist Party's caucus, Botha was elected Prime Minister of South Africa. After his in- auguration, Botha directed two govern- ment commissions to investigate the alleged irregularities within the Depart- ment of Information. In December, 1978, a report published by the second investigative commission, the-Erasmus Commission, found that between 1974 and 1977, $73 million in South African government funds were secretly funnelled into the Information Department to finance a "secret five year plan" aimed at "projecting a true image" of South Africa and "countering hostile attacks from abroad." "All in all," said the report, "the covertly pro- vided funds had gone to finance secret propaganda and influence-buying pro- jects abroad. Some fifty to sixty of them would remain secret and continue to be carried out." The end result of the Erasmus Com- mission's report was that Botha's political rivals-Vorster, Mulder, Van den Bergh, and Eschel Rhoodie-would all be discredited and would retire from government. Rhoodie would later be ex- tradited from France to stand trial on De/auvment of jtote IEEE6E ^a This "confidential" State Department cable correctly speculated that the South African government would move quickly to suppress the budding "Infomwtion Department scan- daL "And, the cable reports, the Sunday Ex- press agreed not to publish further revelations in the scandal to protect "national security. " charges of financial fraud in South Africa. Rhoodie would briefly be im- prisoned-until a South African appeals court would unanimously reverse a con- viction and six year prison sentence im- posed by a lower court. The Erasmus Commission made almost no mention of South African in- fluence buying activities in the United States except to confirm an earlier report by the South African newspaper, the Rand Daily Mail, that the South African government had secretly funnelled $11.5 million in secret payments to Michigan publisher John McGoff to buy the Washington Star. But for the most part, most of Rhoodie's secret activities in the United States would not be disclosed by the Commission and remained secret. [hide A Swell InOppNlce Agency hen Eschel Rhoodie became the South African Secretary of Information in 1974, South Africa was an outlaw nation in the international community. For that situation to change, South Africa's im- age in the world had to be improved-a task that seemed almost impossible. In 1978, the Department of Informa- tion circulated a report among South African officials painting a bleak picture of the way the rest of the world viewed their regime and its apartheid policies. Said the report: South Africa was seen by the foreign media as a potential Vietnam, a new Lebanon, another hot spot in the world about to go up in flames... The govern- ment's credibility was described as very low... The continuation of the (secret) riots and the spread of the riots to other cities and to rural areas over a period of months had a devastating effect on South Africa's image as a politically stable country... In the United States, it was a very bad year for the country. The South African newspaper, The Citizen, which was secretly owned by the Department of Information, also ex- pressed to a degree the view of the world held by the Nationalist Party: Moscow obviously does not want to colonize Southern Africa, but it does want to impose some form of Marxist control over the region in an essential part of its worldwide struggle for com- munist imperialism... Theoretically, the U.S. onslaught on South Africa is conducted in the name of human rights. The more cynical however, believe that the U.S. faced with a rising resources crisis, wants to replace white democracies with black dictatorships so as to have no option but to do the west's bidding. In fact, some South African officials tried to sell the South African people on the concept of "total onslaught"-a modern day version of the laagar, the en- circling of Afrikaaner wagon trains in order to defend themselves from tribal attacks during their long treks northward away from their repressive British rulers. "The concept of total onslaught" says Rhoodie, "was understood by cer- tain politicians, notably by Mr. P.W. Botha [the current Prime Minister of South Africa] and General Magnus Malan who was then the Chief of the Armed Forces and [who] later became Minister of Defense." "This concept," says Rhoodie, "included the belief that there was an onslaught on the political, economic, and sporting field on South Africa and [that] this was worldwide and continuing... That is why they talk about total onslaught. The philosophy was that in order to counter such a total onslaught you needed a total reaction and in order to get a total reaction, all of the potential strong points of South Africa-all of its defensive mechanisms, whether it's political, economic, cultural, social, sporting-should be coordinated against this total onslaught and in order to do so you are required to [have] a government that is closer to a benevolent dictatorship than anything else." The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 It was against such a background that Eschel Rhoodie became South Africa's Secretary of Information. When Rhoodie became Secretary of Information, the Department was only a propaganda ministry--and not a very good one at that. Its major activity was producing cultural and tourist films, the most memorable being "The Rock Art of the Bushmen." But Eschel Rhoodie was a more am- bitious, energetic man than his predecessors as Secretary of Informa- tion. He took very seriously the task given to him by John Vorster: to be the Prime Minister's chief engineer in a war against the "worldwide psychological and propaganda" campaign being wag- ed against South Africa by the rest of the world. Under Rhoodie, the Department of Information became more than a pro- paganda ministry. It also became a diplomatic service (engaging in secret diplomacy with Israel and Black African states) and an intelligence agency. The Department also secretly owned publishing houses, film companies, news photo agencies, newspapers, '"arid magazines around the world. Had it not been for the Department of Information scandal, Rhoodie and the Department might well have controlled one of the three or four largest publishing houses in the world. Rhoodie also directed a covert pro- gram to secretly subsidize politicians in Africa and the rest of the world who were favorable to South Africa. At its height, the program would resemble that of the CIA. In fact, the South African govern- ment intervention in the U.S. electoral process by secretly funnelling funds into two Senate campaigns appears, on the surface at least, to be not much different than U.S. attempts. in the 1970's to undermine the democratically elected government of Chile. One such recipient of secret Depart- ment of Information funds was James Menachem, who served as President of the Seychelles until June 1977, when he was deposed in a bloodless coup by Marxist Albert Rene. According to Rhoodie, Menanchem was paid $23;000 a year by the South African government in exchange for maintaining normal trade relations with South Africa, gran- ting South African airlines landing rights on the islands, and providing intelligence information to the South Africans on the inner workings of the organization of African Unity (OAU), of which Menan- chem as Prime Minister of the Seychelles was a member. The South African 22 Winter 1985 Eschel Rhoodie took very seriously the task given him by Prime Minister Vorster: to be the chief engineer in a war against the worldwide psychological and pro- paganda campaign being waged against South Africa by the rest of the world. government also provided Menanchem's political party with a full-color high speed printing press, according to Rhoodie, to help him get elected as Prime Minister of the Seychelles in the first place. Another African recipient of secret Department of Information funds was J. Resampe, one-time candidate for Prime Minister of Madasgascar. But it was on Zimbabwe, at the time known as Rhodesia, that the South African government focused its most ambitious plans to intervene in the inter- nal affairs of another African state. And, according to Rhoodie, a U.S. corpora- tion-Allegheny Ludlum In- dustries-played a key role in the bribery and influence-buying scheme in that country. In 1977, Andy Andrews, Vice Presi- dent of Allegheny Ludlum Industries ap- proached Connie Mulder with a proposi- tion to secretly subsidize the careers of two black "moderate" politicians: Bishop Abel Muzorewa and James Chirerema. Andrews and Allegheny Ludlum wanted to support the two black leaders because top corporate officers believed them to be the least likely to ban the export of Rhodesia's chrome. At the time, Allegheny Ludlum imported most of its chrome from Rhodesia. . Andrews told South African officials The National Reporter that if the Department of information would secretly provide $1 million to Muzorewa and Chirerema, Allegheny Ludlum would invest $4 million in South African industries of the South African government's choosing. The South Africans did indeed pass the money along to Chireremh and Muzorewa, through the the Swiss bank account of Chris Schofield. Allegheny Ludlum's representative in Rhodesia. (Schofield would on a later occasion be of use to Rhoodie. It was through Schofreld's Swiss bank account that the Department of Information would fun- nel $50,000 to Ret. Lieutenant General Dan Graham's Miami-based Institute of Policy Studies.) In Norway, the Department of Infor- mation provided secret. funding to Andaro Lance, a right-wing Norwegian politician and businessman, to enable him to launch a new political party in that country7-which, of course, would have a favorable disposition towards South Africa. Much to the surprise of the South Africans, the new political party won four seats in the Norwegian parliament. That would lead Owen Horwood, South Africa's Finance Minister to joke, accor- ding to Rhoodie, that if they pumped enough funds into Lange's political par- ty, it would become Norway's majority party, and someday rule the country. It was in the United States, however, that the South Africans launched their most ambitious attempt to influence the internal affairs of a foreign power, par- titularly with the funnelling of $430,000 into the Senate campaigns of S.I. Hayakawa and Rodger Jepsen. Rhoodie's Department of Informa- tion also acted as an intelligence agency in another fashion. It recruited in- dividuals who later served as intelligence agents for South Africa. Among those recruited were two members,of Great Britain's Parliament. Rhoodie says they were not paid, "large amounts, I think, by American standards. The one got 3,000 pounds per year and the [other] one got 5,000 pounds." ne of the more interesting aspects of South Africa influence-buying program was the Department of Information's secret subsidization--sometimes in part and sometimes in full, of academic organizations around the world. A number of those organizations were bas- ed in the United States, or carried out operations in the United States. Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Rhoodie later explained his govern- ment's involvement in such programs: Connie Mulder was strong on [a] state of affairs... in which the opinion formers and decision makers abroad often did not understand [South Africa]. He realized that attempts at rationalizing South Africa's policy in terms of outdated in- tellectual concepts were generating more heat among foreign observers when what was required was not more heat but more light. Mulder also grasped the fact that the "eggheads," the academics, wielded as much influence behind the scenes in Washington, London, Paris and other capitols of the western world as businessmen, the generals of the army, and the politicians. Over a period of three presidencies, it was men from the univer- sities, Sorenson, Rostow, Kissinger, Brzezinski, and MacNamara who wielded the most influence. It was studies on South Africa by experts at various universities which found their way to Congressional desks and into the State Department. One academic organization entirely subsidized by the South African govern- ment was the Institute for the Study of Plural Societies at the University of Pretoria in South Africa. From October 23 to 25, 1978, the In- stitute held a "Conference on Intergroup Accomodation in Southern Africa" held in New York City. Among the prominent American academics who attended the conference-apparently unaware that it was being secretly subsidized by the South African government- were Pro- fessor Seymour Lipset, Professor of Political Science at the Hoover Institute at Standford University, Ralph Barbanti, a prominent political scientist at Duke University; Dr. Ray Cline, a former senior CIA official currently with the Center for Strategic Studies at Georgetown University; Dr. William Schneider of the Hudson Institutes; and Dr. Richard Segat of the Carnegie En- dowment. Another academic organization secretly subsidized by the South African government-as confirmed by Rhoodie and another South African official-was the London-based Foreign Affairs Research Institute (FARI). One of the main activities of FARI was coordinating attacks among conser- vatives against the World Council of Churches-which South Africa con- sidered to be one of its most effective adversaries on the international political scene. Geoffrey Stewart Smith, head of FARI, published a book in 1979 entitled "The Fraudulent Gospel," which attack- ed the World Council of Churches. Unknown to the public was the fact that publication of the book was secretly sub- sidized by the South African govern- ment. In June 1978, FARI co-sponsored a conference in Brighton, England with the CIA-connected Institute for the Study of Conflict. Among those who attended was Richard Mellon Scaife, a conser- vative Pittsburgh businessman who has contributed more than $100 million to conservative political causes in recent years. Also attending the conference was William Casey, who would later be ap- bassadot to the Organization of American States (and mentioned previously in this story, as a member of the Board of Directors of the Panax Cor- poration, during the time it received $11.3 million in laundered South African funds to buy the Washington Star, Sacramento Union, and other American newspapers). The third Reagan advisor to attend the 1981 FARI conference was Ret. Lt. General Dan Graham, formerly the head of the Defense Intelligence Agency. Graham has had other longstanding con- nections to Rhoodie's department. pointed Director of the CIA by President Reagan. From July 30 to August 2, 1981, the South African-subsidized FARI held a second major conference in Kent, England. According to an internal FARI memorandum, written by Geoffrey Stewart Smith, conference participants from 26 countries met: To consider the need of the entire non- commmunist world to respond to the Soviet global political and military threat... the [conference] certainly played a useful part in starting to try and formulate a global security alliance ade- quate to withstand the power of the largest military war machine the world has ever seen. President Reagan-apparently unaware that FARI was secretly subsidiz- ed by South Africa-sent the conference a "message of good will." Three Reagan administration officials also attended the conference; they included Richard Pipes, then an aide on the National Security Council and William Middendorf, then and currently the administration's am- Earlier he had taken an all-expense paid trip to South Africa financed by the South African Freedom Foundation, a wholly subsidized front group for the South African government. In 1978, Graham spoke at and received an honorarium for speaking at a conference in Washington, D.C. sponsored by the South African Foreign Affairs Associa- tion, another South African front organization. More important, however, is the fact that Graham himself was the recipient of secret Department of Information funds. In 1977, according to Rhoodie, the South African Department of Information passed along $40,000 to Pat Woop, an official with the Americans Concerned with South Africa, a pro-South African lobbying group, who then passed along the funds to Graham's Miami-based In- stitute on Policy Studies to complete an "independent" study showing the strategic importance of South Africa. Rhoodie personally handled the transfer of funds to Woods, utilizing the Swiss bank account of Chris Schofield, Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Cnilfh i A fr GOLDEN ARMOR BY ROBERT SHEPHF,RD In a 1980 Ford Foundation study en- titled "The Potential Impact of Interna- tional Trade and Investment Sanctions ince the achievement of black ma- on the South African Economy," jority rule in Zimbabwe, the Richard Porter pointed out that the Republic of South Africa has stood South African economy's center of alone: the last bastion of white vulnerability lies in its ability to import, minority rule on the African continent. '' not in capital flows. As long as the coun- The country's segregationist racial try can continue to pay for required im- policies, based on the doctrine of spar- ports, it will remain immune to outside theid continue in full force despite pressure. And South Africa possesses the cosmetic changes by the Pretoria govern- one commodity that-next to oil-all in- ment and well-publicized attempts by dustrialized nations desire: gold. outside pressure groups to influence the internal policies of the South African regime. Resolutions have been passed by he Republic of South Africa is the the United Nations and individual largest gold producing nation in the governments calling for a trade embargo world. It is, in fact, the world's on- against South Africa. Cultural and sports ly gold-based economy. Johan- links have been severed in the last decade nesburg, the industrial and financial between the majority of the world's na- center of the country, sits amidst the tions and South Africa. And concerned Wiwatersrand, the richest gold ore pro- groups in the United States have ducing area the world has known. South pressured American corporations to Africa's transportation, communication withdraw capital invested in South and industrial sectors have grown up Africa by calling on individuals and in- around the `Rand' in the 20th century. stitutions to divest themselves of stock in Half the world's annual production of the approximately 330 corporations do- gold comes from South African mines, mg business in South Africa. over 70 percent if you exclude Soviet South Africa remains unchanged. The sources. In 1982, the 21,355,111 troy real effect of the various attempts to cen- ouncesl mined brought South Africa in sure South Africa and impose an $8.1 billion in revenues. In contrast, the economic "embargo" has been nominal second leading producer, the Soviet at best. In 1982, the total book value of Union, was estimated to have mined 8 American investment in South Africa fell million troy ounces, or just over one- from $2.6 billion to $2.5 billion-and third south Africa's total. even this small drop was due to the con- The sale of gold overseas has helped tinued world recession, not divestment. Pretoria withstand the global recession Winter 1985 The National Reporter of recent years, while many other nations were battered by severe economic pro- blems. Although, according to the U.S. Department of Commerce, South Africa registered its first negative growth rate from late 1981 through 1983 of between 1 percent and 3 percent, this was primarily due to a long regional drought which cut the annual grain harvest by 66 percent, from 9.9 million to 3.3 million metric tons. South Africa, normally a grain ex- porter to the rest of southern Africa, was forced to import 2 million metric tons of corn in 1982. South Africa's manufacturing sector, which historically has received state pro- tection from foreign competition, has had its share of problems, with produc- tion decreasing between 1981 and 1983. Because the apartheid laws limit non- whites' access to job training and educa- tion opportunities, most industries suffer from a shortage of skilled labor. Advanc- ed technology and heavy machinery must still be imported, draining foreign ex- change. And since South African manufactured goods cannot compete in the world market against better produced and cheaper foreign goods, large deficits usually pi le up in South Africa's trade balance. The foreign exchange earned by gold sales is thus critical to the continued sur- vival of the South African regime, enabl- ing it to resist attempts from abroad to limit South African access to the interna- tional economy. Possessing a commodity all nations desire, South Africa has been Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 able to purchase the technology, machinery, raw materials, energy sup- plies and luxury goods needed to defend the apartheid system and maintain the whites' high standard of living despite a disorganized and highly inefficient economy. In fact, an economic recession has been averted in recent years solely because of export earnings from the gold industry. In 1982, the South African economy recorded a trade balance surplus of R 704 million, followed by a surplus of approximately R 4 billion in 1983.2 In both years gold accounted for roughly 50 percent of total exports. Without gold, the country would have been in much the same position as most of the rest of the non-industrial nations: forced to borrow to pay its bills. For South Africa is not an industrial state but a commodity economy, dependent on agricultural productivity and mineral production. Unlike other commodity economies, however, South Africa's dominant commodity is a valuable mineral, on which the country holds a near monopoly. Gold in South Africa is very big business. Because of the nature of gold-bearing ore found in the Wiwatersrand region, large sums of capital have been required to develop and maintain a mine. Gold is found in layers of quartzite formations, rather than in the nuggets, veins or alluvial deposits discovered in California and Australia during the great gold rushes of the mid-19th century. This has prevented the development of Hollywood's familiar image of gold mining: the solitary gold miner panning for nuggets of gold. In Wiwatersrand, tons of ore must be mined and crushed in order to produce the smallest amount of gold. In 1982, it took 267.7 million tons of ore to produce 21.3 million ounces of gold, a yield of only .32 ounces per ton. Since gold was first discovered in 1886, the industry has been organized around a few large conglomerates. The gold in- dustry today is controlled by six mining firing through interlocking directorships, joint ownerships and a monopoly on the supply of technological and ad- ministrative expertise and capital. The largest company, the Anglo- American Corporation, is also the big- gest corporation in South Africa, earning a net profit of $534.9 million in 1983. Three of its subsidiaries also rank in the top twenty-five of South African com- panies: Anglo-American Gold Invest- ment Corporation is ninth, Anglo- American Industrial Corporation ranks eleventh, and Western Deep Level Mines is twenty-first. Between them, the three earned a net profit of $447 million in 1983. Anglo-American, involved in two- thirds of total gold production, has direct control of. 40 percent of South Africa's annual gold output. Its closet rivals are Gold Fields of South Africa, the only firm with a major shareholder outside the Republic (Consolidated Gold Fields, of London) and GENCOR, an amalgamation of the Federale Mynbou Beperk Investment Company, the Gold Mining and Finance Corporation and the Union Corporation. Together, these three companies control the output of 29 of South Africa's 37 major gold mines. The remainder are controlled by three "smaller" mining corporations-Barlow Rand, Anglovaal and Johannesburg Consolidated-which are the fifth, nine- teenth and twentieth largest companies in South Africa, respectively. All the gold mining companies work in Seductive ads such as these peddle South African gold to Americans without mentioning that the advertiser, International Gold close cooperation with each other, both in management and marketing. For ex- ample, Anglo-American owns 27 percent of Consolidated Gold Fields, which in turn controls 48 percent of Gold Fields of South Africa, Anglo's main rival. Interlocking directorships are numerous. J. Olgilvie Thompson, the deputy chairman of Anglo, is a Director of Consolidated, as well as Chairman of Anglo Gold Investment. D.A. Etheredge is a director of Anglo, Gold Fields of South Africa and East Driefontein Con- solidated. Etheredge is also President of the President Steyn and President Brand Mining Companies. Robin A Plum- bridge, chairman of East Driefontein, is a director of Consolidated Gold Fields and the Newmont Mining Company. Newmont, a U.S.-based gold-mining company with business ties in the South African industry, owns Palabora Mining Company in South Africa. In 1899, the mining companies created the Chamber of Mines in an attempt to apply uniform pay rates for native African workers. The Chamber then Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Winter 1985 The National Reporter created the Wiwatersrand Native Labor Association, a recruiting -organization charged with providing enough African labor for the mines to prevent "costly" competition for scarce local labor. To- day, the Chamber of Mines represents, besides the gold industry, over 100 uranium, copper, diamond and platinum mining companies. Although it now lob- bies on behalf of all the Republic's mineral interests, the Chamber still takes a special interest-and plays a powerful role-in the gold industry. The Chambers' Gold Producers Com- mittee, composed of one member from each of the six mining firms, oversees the marketing of gold bullion and coins in close cooperation with the South African Government. From the mines, gold ore is sent to the Rand Refinery, Ltd., in Ger- misten. There it is refined, assayed and purchased by the Reserve Bank of South Africa. The Reserve Bank sells the gold on the international bullion market, ex- cept for approximately 100 tons each year, which are supplied to the South African mint for the striking of Kruger- rands. The Chamber of Mines created the Krugerrand in the mid-1960s as part of an effort to increase gold sales in the world market. By a special amendment to the Mint and Coinage Act, Pretoria agreed to give the coin, one ounce of fine gold, legal tender status. In 1971, the Chamber formed the International Gold Corporation "to stimulate the use of gold in industry and especially in jewelry." Intergold Corporation became the world marketing outlet for Kruger- rands in 1973. Since then, Intergold has spent over $200 million advertising the pleasures of gold ownership in the industrialized na- tions of Europe and North America. In- tergold's marketing techniques, in- cluding ads in trendy magazines, have been quite successful: the Krugerrand is far and away the best selling gold coin in the world. By 1980, 33 million fine ounces of gold, worth over $13 billion at today's gold price, had been sold. The impact of the gold industry on the South African economy is difficylt to gauge, it is so enormous. Gold is literally the lifeblood of the country with 21 per- cent of state revenues coming from the industry. Hundreds of thousands of jobs are connected to the gold mines, in transportation, heavy industry and the service industry. Goldls On* rise Ile blood of South Afro, provJOW black black ndnas are pwamt of srva* S Yet underp Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 The gold mines directly employ 487,000 workers-90 percent of whom are black migrants on fixed contracts. These migrants are forced to live in labor compounds away from their families in the "homeland" areas or urban shan- tytowns. White mineworkers earned an average of $932 per month in 1980 while blacks received $168, or around 20 per- cent of white wages. The gap has fallen since 1973, when black wages averaged only $23.50 a month, less then 5 percent of the average $451 per month white wage. Both black and white wages have in- creased since then largely because of the astronomical rise in the world gold price: from $42 an ounce in 1973 it rose to a peak of $800 per ounce in 1979 and settl- ed at its present level of $375 to $400 an ounce. Because of this huge increase in revenues, the mining companies raised wages at little cost to themselves. Higher black wages have also been necessary in order to attract South African blacks into the mines. Before the 1970s, it was difficult for labor recruiters to hire blacks from the Republic because of the low wages and poor working con- ditions. Instead, the majority of the migrant workers came from Zimbabwe, Mozambique and Malawi, where alter- native labor opportunities were scarce. But since the withdrawal of the Por- tuguese from Angola and Mozambique in 1975 and the subsequent increase in support of guerrilla activity aimed at South Africa, labor recruiters have turn- ed to more politically "stable areas." To- 'day, 88 percent of the black mineworkers come from South Africa, Lesotho, Swaziland and Botswana, with the other 12 percent from Mozambique, Malawi and Zimbabwe. How has gold retained its economic power? From the end of World War II until the late 1960's the monetary role of gold was generally assumed to be at an end. The dominant economic power, the United States, in concert with the Inter- national Monetary Fund and World Bank, both post-war creations of the American reconstruction effort, main- tained a fixed price of $35 per ounce of gold. President Franklin Roosevelt had arbitrarily set the price of gold at this level in 1935, after gradually raising it from $20.47 per ounce in hopes of stimulating economic recovery. The United States maintained the fix- ed price through a simple measure: any government or central bank that wished The demise of the gold standard was an enor- mous boon to the South African economy. The price of gold began to rise, which naturally benefited its principal producer. to purchase gold could do so from the U.S. Treasury. But this strategy could work only so long as global confidence in the American dollar remained intact. If the dollar was considered "as good as gold," banks and governments prefer- red to use it as an international currency, since it was much easier to transport, store and exchange than bullion. But by the late 1960s, the United States was amassing huge deficits as the government tried to both fight the Vietnam War and expand social programs at home. As confidence in the dollar's stability fell, purchase of Treasury gold increased, led by France. In an attempt to halt the run on Treasury gold, a two-tiered gold price was established in 1967: the "official" price of $35 per ounce and a "free- market" price, allowed to float on the open market. Finally, in 1973 President Nixon took the United States off the gold standard, devaluing the dollar and allow- ing the gold price to float on the open market, much like any other commodity. The U.S. Treasury no longer sold gold on demand and in 1974-1975, U.S. restrict dons on the private ownership of gold were lifted. The demise of the gold standard was an enormous boon to the South African economy. With the world recession caus- ed by the oil crisis of 1973, the price of gold began to rise, which naturally benefited its principal producer. The value of annual South African gold out- put increased from 775 million Rand in 1967, to 2.56 billion Rand in 1974, to over 10 billion Rand in 1982. The actual production of gold did not rise ap- preciably; in fact, in some years it fell below pre-1967 levels. But the huge in- crease in price added millions of ounces of gold to South Africa's demonstrated reserves, gold that previously had been unrecoverable due to high costs. Besides its historic role as a long-term store of value, gold today has a number of strategic applications. Gold plays a small but highly critical part in electronic devices and computers. Because it never rusts, corrodes or decays, gold is a vital component of military electronic equip- ment and turbine engines, insuring dependable operations under all condi- tions. In the last decade, in part because of the Chamber of Mines' International Gold Corporation's publicity campaign, gold has shed its traditional, non- speculative role and become an invest- ment tool for individuals and commer- cial institutions, much like stocks and bonds. Gold has regained its place in the inter- national monetary system because of the inability of the United States, the IMF and the World Bank to convince the rest of the world to accept either the American dollar or the IMF's Special Drawing Right as a replacement for gold. The Special Drawing Right is a quasi- currency, its value based on a market- basket of industrial nations' currencies and made available to members of the Fund as loans. As of 1983, proven and probable world gold resources, according to the U.S. Bureau of Mines, total 2.4 billion troy ounces. South Africa possesses 1.28 billion, over 50 percent of the total. The Soviet Union controls 450 million troy ounces, 18.4 percent of resources. With the two leading producers controlling two-thirds of the world's gold and enor- mous initial capital outlays required to develop a productive gold mine, it will be extremely difficult to shift to alternative sources other than South Africa and the USSR. For the West, support of the South African government is an economic necessity, insuring the uninterrupted sup- ply of key minerals, particularly gold. Gold export earnings will continue to enable Pretoria to ignore economic and political sanctions aimed at the reform of the South African economic and social system. ^ 1The troy ounce is equal to 31.1 grams, or 1.097 avoirdupois ounces. 2At Present, the South African unit of currency, the Rand, is worth U.S. $0.7825, or 1 U.S. dollar equals 1.27 Rand. The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 CHANGING COURSE IN CENTRAL AMERICA A commentary on U.S. policy in the region by josh Cohen. 28 Winter 1985 The National Reporter E azlier this' year; PACCA-Policy Alternatives for the Caribbean and Central America- published a report entitled "Changing Course: Blueprint for Peace in Central America and the Caribbean." There are two broad concerns that frame the background of "Changing Course." First, like many other Americans-both North Americans and Central Americans-we are firmly op- posed to current U.S. policy in Central America. We believe that that policy is immoral and that it is moving on a trajec, tory leading to further escalation and in- vasion-a trajectory with increasingly disastrous human consequences. In an admittedly conservative accounting of costs, one group of analysts recently estimated that an invasion of Nicaragua, together with continued economic and military support for other countries in the region, would cost $16 billion over the 1984-1989 period, would result in 2,000-5,000 Americans killed, 9,000-19,000 wounded, and would re- quire U.S. occupational forces of one- and-one-half divisions to remain in Nicaragua for at least 5 years. About Nicaraguans, the analysis says only that their casualities "are likely to be very much higher." Our second concern is that only one obstacle stands in the way of a continua- tion of U.S. policies and their escalation, and that is American public opinion. Two aspects of this merit attention. First, the bad news. We are trying to engage in and encourage others to engage in a preventive action, to stop the escalation before it goes any further. And we recognize that there are considerable dif- ficulties in mobilizing large numbers of people under such circumstances. The good news is that we are certainly far bet- ter off in this respect than we were in the early 1960s. In 1962, when 13,000 American troops were in Vietnam, there was no anti-war movement of significant size and power. Now, by contrast, there is a movement, there is broad public scepticism, and-whatever its shortcom- ings-Congress is trying to exercise some independent initiative in the area of foreign policy. The question that we face, then, is: can we consolidate this concern, this scep- ticism, this opposition, and effectively redirect U.S. policy toward Centre America before more damage is done? I t}.a?k that the answer to this question is: yes, but that doing so will require more than just criticism of current policies. As Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 in other policy areas, we need an alter- native that states what we think is right, and not just criticisms of what we know is wrong. "Changing Course" presents such an alternative. It offers an analysis of the problems that beset Central America, and makes specific policy recommendations in the framework of a set of basic principles that ought to guide U.S. foreign policy everywhere. First, then, let's consider the analysis. There are, I believe, two basic ap- proaches to understanding Central America. Neither is correct in every respect-they are too oversimplified to be exactly right-but one is basically right, and the other is basically wrong. Each can be summarized straightfor- wardly. First, there is the approach underlying Reagan administration policy. Its most clear statement can be found in Am- bassador Jeanne Kirkpatrick's 1979 arti- -le in Commentary magazine, "Dictator- ships and Double Standards"-the arti- cle that won her the post of U.N. am- bassador: "Because the miseries of traditional He are familiar, they are bearable to or- dinary people who, growing up in the society, learn to cope, . . " In view of this willingness of those inside "traditional" societies to tolerate unlimited pain, suf- fering, and humiliation, it follows, as the night follows the day, that conflict and revolution must come from outside these societies, from "external" forces. Finally, what is required to handle conflict is to eliminate the external threat, thus restoring order. A model of restora- tion is provided by El Salvador, 1932, when 30,000 Salvadorean were killed, and about which Ambassador Kirkpatrick said: "To many Salvadoreans the violence of this repres- sion seems less important than that of the fact of restored order and the thirteen years of civil peace that ensued." That's one view of the problem. PAC- CA's view is very different. PACCA agrees with Ambler Moss, U.S. am- bassador to Panama in 1980, who said that: "What we see in Central America today would not be much different if Castro and the Soviet Union did not ex- ist." And with the Latin American bishops who said at Medellin in 1968: "Latin America faces a situation of in- justice that can be called institutional violence. We should not be surprised, therefore, that the `temptation to violence' is surfacing in Latin America. One should not abuse the patience of the people." More specifically, PACCA's position is that: For most Central Americans, life is miserable and unfair, or, as Thomas Hobbes said, "nasty, mean, poor, brutish, and short." According to a United Nations study of 1981, nearly half the population lives in "extreme poverty." The distribution of income is grossly unequal: the richest 5 percent of the population take nearly one third of national income. In Nicaragua before the 1979 revolution, the bottom 50 percent of the population had an average per capita income of $286 per year; one in eight infants died before they were one year old; and 80 percent of the rural population lacked sufficient land to produce their own means of sub- sistence. Like citizens of Poland, Chile, or the United States, Central Americans will try to change miserable and unfair condi- tions. In short, PACCA rejects the cen- tral premise of the Kirkpatrick posi- tion-that people in "tradional societies are willing to tolerate unlimited insults to their human dignity." While considerable economic growth took place in Central America between 1950 and 1978-an average annual in- crease in real GNP of 5.3 percent-this growth did little to improve the miserable and unfair conditions. The reason lies in the basic model of growth: the produc- tion of agricultural goods (bananas, cot- ton, coffee, sugar, etc.) for export, and not for internal consumption. The political system and the military are largely concerned to protect the privileged beneficiaries of the agro- export model. The result is that there are no real avenues of reform open to the people when, as in the early 1970s, they do act to change their miserable and un- fair conditions. Rather, reform efforts typically lead to repression, and further efforts lead to terror. This combination of miserable and unfair conditions, a model of growth that fails to ameliorate these conditions, and a political order closed to reform makes the countries "ripe for revolution." Finally, there is the role of the U.S. Some U.S. interests are the beneficiaries of these systems of exploitation. In any case the American government has con- sistently provided the ultimate guarantees for regimes of institutional violence through a variety of programs, ranging from covert action, to direct military intervention, to the steady provi- sion of support and training for the military-e.g. the 5700 members of The National Reporter Winter 1985 29 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Somoza's National Guard trained by the U.S. between 1950 and 1980. Indeed, the Rockefeller Report of 1969 stated that U.S. support for Latin American police and military forces "will bring the best long-term hope for the improvement of the quality of life of the people." Of course, lip service has always been paid to the importance of reform-from the Alliance for Progress, to the Kissinger Commission Report, to the speeches of President Reagan. But the rhetoric of reform has always disguised a reality of repression. have briefly summarized the PAC- CA analysis. What does this analysis suggest about what U.S. policy in Central America should be? First of all, PACCA holds that any policies should embrace the following general principles: (1) peaceful dispute resolution; (2) self-determination and non-intervention; (3) equitable develop- ment; (4) support for human rights; (5) encouragement of democratic values; (6) consistency. with the genuine security in- terests of the citizens of the United States. But in stating these principles, we must be careful to avoid excessive rhetoric. The central issue is not the statement of principles, but how they are interpreted in light, of the analysis of Central America, and how they are embodied in policies. The Kissinger Commission report, for example, agrees with all of these principles. But its emphasis on "security interests" ensures the continua- tion of a policy of subordinating equitable development and reform to military support for existing regimes that have shown no interest in reform. PAC- CA's recommendations reflect its analysis of the internal sources of conflict and revolution. They emphasize equitable development-the needs of those at the bottom-and the legitimacy of diverse, alternative paths of national development. To be more specific, our short term recommendations are. 1. In El Salvador, the Kissinger Com- mission recommends more military aid and no power sharing. PACCA recom- mends no military aid for the current regime, and calls for power sharing. 2. In Nicaragua, the Kissinger Com- mission calls for continued covert action, continued support for the contras, and continued credit pressures through multilateral lending agencies. PACCA calls for an end to covert action, an end to support for the contras, and an end to the credit blockade. Can we effectively redirect U.S. policy toward Central America? We need an alternative that states what we think is right, and not just criticisms of what we know is wrong. 3. In Honduras, the Kissinger Com- mission supports the U.S. military buildup; PACCA opposes it. 4. In Guatemala, the Kissinger Com- mission calls for military assistance; PACCA says no military assistance. Thus PACCA agrees with a senior leader of the Salvadoran Christian Democrats, who complained that the Kissinger Commission "places too much emphasis on the military aspect." What about the longer term? Here I will briefly review a few of the main PACCA Proposals for U.S. assistance for independent, national equitable development: 1. Debt: PACCA calls for a program of renegotiation of debt from shorter term to longer term, and from high in- terest loans to low interest loans, And, it calls for a change in IMF policies on con- ditionality, policies which now effectively condition the availability of credit of austerity programs for the poor. 2. Trade Here there are two broad recommendations. First, that special duty-free treatment be given to imports from those countries in the region-for example, Nicaragua-that are overcom- ing gross inequality and promoting food production, rather than just more agro- exports. Second, that a program of price stabilization be instituted for basic agricultural exports, thus reducing dependency on world market fluctua- tions. 3. Aid. PACCA recommends that aid be provided to governments that are respon- sive-in their policies, not just in their rhetoric-to the demands of the poor, that encourage-in deed, and not just in words-participation by the poor in defining the terms of the development process, and that encourage-in fact, not just in theory-diversification of the economic base. hanging Course" provides an outlook on Central America that is broad and regional in scope, .long term in perspective, and reasonable and realistic in its recommen- dations. Above all, PACCA's proposals represent a positive vision and a real choice for U.S. policy in the region. The proposals are practical, and they are principled. They reflect a sound understanding, and a clear sense of justice. Their heart is best captured in remarks made by the Columbian novelist-author of 100 Years of Solitude-Gabriel Garcia Marquez. In accepting his Nobel Prize for Literature, Garcia Marquez returned to the theme of Latin American solitude: The immeasurable violence and pain of our history are the result of age-" equities and untold bitterness, and not a conspiracy plotted 3,000 leagues from our homes. But many European leaders and thinkers have thought so, with the childishness of old-timers who have forgotten the fruitful excesses of their youth as if it were impossible to find another destiny than to live at the mercy of the two great masters of the world. This, my friends, is the very scale of our solitude. He continued by expressing his belief in a utopia: A new and sweeping utopia of life, where no one will be able to decide for others how they die, where love will pro- ve true and happiness be possible, and where the races condemned to one hun- dred years of solitude will have, at lest and forever, a second opportunity on earth. By moving forward on the basis of the alternative course PACCA has propos- ed, we can begin to overcome our own one hundred years of solitude from the people of Central America. ^ This commentary is drawn from testimony which Josh Cohen, an associate professor of philosophy and political scienceat MI T, presented before the Massachusetts State Democratic Committee's Commission on Central America. 30 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 TUFTS UNIVERSITY: STUDENTS COUNTER SPIES BY JOHN ROOSA When the director of the CIA's regional recruiting office visited Tufts University in Medford, Mass. the night of October 3, he received a surprise. Twenty-five students staged a non- violent direct action. Stopping him from speaking at what had been advertised as a CIA "informational meeting." The pro- testors formed a human wall between the CIA recruiter, Stephen L. Conn, and the students who had come to hear the presentation. Conn told a Tufts newspaper reporter that such sessions had "occasionally" been met with pro- tests on other campuses, but that this was the first time that students actually "prevented us from giving the presenta- tion." The Tufts administration reacted by calling the protestors before a disciplinary panel. The protestors in turn defended their action, using the hearing to publicize CIA crimes and denounce Tufts' policy of allowing the Agency to recruit on campus. In arguing before a supportive audience of about 90 people that their action was justified, the students noted that under Tufts' disciplinary guidelines persons are punished only when their actions have breached the "standards of the com- munity," so that any decision would be a political judgement on what those stan- dards are. They argued further that the administration, not the students, was violating the "standards of the com- munity" in allowing the CIA on campus. Faced with this defense, the disciplinary panel chose not to discipline the students but at the same time stated that the protestors had violated universi- ty rules. After the disciplinary process was over, the protestors met with three deans and confronted them with specific university policies violated by the CIA's campus recruitment activities. The deans, deciding that some important points had been raised and knowing that the CIA was not planning to return to Tufts until at least the following semester anyhow, temporarily suspended CIA recruitment of undergraduates until a panel of deans could determine if univer- sity policies were in fact being violated. After the protestors issued a press release on the deans' decision and the ac- tions of October 3, the Associated Press, National Public Radio and other na- tional and local media picked up the story. The Boston Herald, the local Rupert Murdoch paper, was outraged enough to run a lead editorial titled: "Tufts Wimps Out with Its CIA Ban." The next day Tufts president Jean Mayer rescinded the temporary suspen- sion. In a written statement, he denied that CIA recruitment had ever been ban- ned, explaining that "any policy on recruitment must be a University policy, not policy of an individual school." One dean told protest leaders that Mayer had been pressured to take the action after receiving complaints from Tufts trustees. Privately Mayer admitted, "It would be difficult pragmatically and ideologically for Tufts to ban agencies of the federal government from its campus." M ayer's decision is easily explain- ed. Although a small school, Tufts sends a large number of students each year to the CIA. A 1981 survey by Tufts' student newspaper reported that twelve undergraduates had been interviewed by the Agency during the previous year, four had received offers, and two had ac- cepted jobs. Even more recruiting takes place at the university's Fletcher School of Law and Diplomacy, an institution Mayer himself acknowledges to have a "hawkish reputation." As America's oldest graduate school of diplomacy, Fletcher has been an important training center for future Foreign Service officers. The last three U.S. ambassadors to El Salvador-Thomas Pickering, Deane Hinton and Robert White-are Fletcher alumni, as are five other current am- bassadors, several high-level State Department officials and over 250 other officers. At the same time, Fletcher is also an important training center for potential CIA employees. The most re- cent Fletcher alumni book lists nineteen graduates who acknowledge currently holding positions at the Agency. Pro- bably an equal number of graduates have left the CIA over the last decade while others hold deep cover positions and can- The National Reporter Winter 1985 31 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 not admit their true employer. Documents obtained under the Freedom of Information Act show that there are high-level ties between Fletcher and the CIA related to recruitment going back to at least to 1972. In that year, ac- cording to letters and memos, Fletcher officials took great pains, in preparing for the school's annual Washington "placement trip" for graduating students, to include the CIA on, the group's itinerary. Recruiter Harry L. Russell reported to Langley that Fletcher Dean Edmond Gullion and Assistant Dean Larry Griggs "are extremely happy about having their students invited to the Agency and are quite honored." Wan- ting not to pass up such a good oppor- tunity to cultivate two important univer- sity administrators (as well as potential student recruits), the Agency arranged an unusual two-hour briefing by top-level officials. Over the next four years, Fletcher of- ficials apparently developed ever closer ties with the CIA-with the CIA reciprocating by recruiting for Fletcher. In late 1976 an undergraduate at one New England college, recruited by the CIA for its summer intern program, was encouraged by his Agency contact, recruiter Charles R. Pecinovsky, to con- sider attending Fletcher. Pecinovsky then arranged for Fletcher's Larry Griggs, whom he described in a letter as a "work- ing acquaintance," to send the student admissions material. At the same time, Griggs and other Tufts personnel were receiving free research materials from the Agency. As the Tufts newspaper noted in reporting these gifts, "the CIA has been known to provide nonpublic information to academics for use in their work, in- creasing their prestige and promotion prospects, and sometimes their sense of obligation to the Agency." It is easy to see why CIA recruiters would seek ties to Fletcher and encourage students to go there. Fletcher's faculty in- cludes a handful of present and former government officials, some of whom have held posts requiring high security clearances. Material from their courses would be useful in intelligence work, while their backgrounds could help them spot students with potential talent for such work. Such professors include: pointment at Fletcher. The Flet- cher catalog reports that he is also "a consultant to various U.S. government agencies concerned with national security affairs" and that his professional interests in- clude "U.S. foreign and national security policy, contemporary military strategy, intelligence and national security, unconventional war and power projection in the Third World, and propaganda and political warfare." The CIA's pro- jection of power into the Third World formed the basis of the students' criminal charges against the Agency. His most recent book, written with Godson, is Dezinfor- matsia: Active Measures in Soviet Strategy, and his contribution to the national security section of the Heritage Foundation's blueprint for the second Reagan term is cur- rently receiving much press atten- tion. At this time, Shultz is con- ducting a Fletcher seminar on in- telligence methods. ? John Roche came to Fletcher from Brandeis in 1973. Before that he had served as a special consultant to Lyndon Johnson-in part, he says, "dealing with disinformation with the great North Vietnamese 'peace offensive"'-and as a member of Richard Nixon's com- mission, headed by Milton Eisenhower to oversee the removal of Radio Free Europe and Radio Liberty from CIA control. During his first four years at Fletcher, he served on the Board for Interna- tional Broadcasting, overseeing Radio Free Europe and Radio Liberty operations. ? Leonard Unger, who came to Flet- cher after retiring from the Foreign Service, had been deeply involved in U.S. war planning for Indochina-as Ambassador to Laos (1962-64), as chairman of the State Department's Vietnam coor- dinating committee (1965-67) and as Ambassador to Thailand (1967-73). In Thailand, he is known to have supervised the counterinsurgency operations. ? Hewson Ryan was deputy director at the United States Information Agency during the Johnson Ad- ministration, and later, under Nix- on, became U.S. Ambassador to Honduras, where he played a relatively positive role supporting military reform, according to knowledgeable sources in ? William Griffith, who also teaches at M.I.T., was the main CIA liaison at Radio Free Europe until 1958, when he left to join M.I.T.'s Center for International Studies, then sponsored and partially fund- ed by the CIA. Griffith's Interna- tional Communism project and his M.I.T. salary were paid by the CIA until the mid-1960's. He con- tinued to be a consultant for the Agency thereafter. At Fletcher, he teaches courses on radical and communist theories and practice. ? Richard Shultz was a research associate with two CIA-linked think tanks, the National Strategy Information Center and Roy God- son's Consortium for the Study of Intelligence, before his recent ap- 'That's a good question which demands some real evasion.' 32 Winter 1985 The National Reporter Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 Approved For Release 2010/06/16: CIA-RDP90-00845R000200790001-9 n,a R.cnatmant r.~~ .Int tot -73" .stt~~t l by Tegucigalpa. Since leaving the Foreign Service and coming to Fletcher in 1977, he has headed the Murrow Center for Public Diplomacy and taught courses on propaganda and on Central America. At the Murrow Center, he replaced Philip Horton, a former CIA Officer and the long- time editor of the now-defunct CIA-funded magazine, The Reporter. ? Theodore Eliot joined Fletcher as dean in 1979 after retiring from the Foreign Service, and has since been appointed Professor of Diplomacy. Though Eliot had never published, Tufts officials are said to have been more interested in the clout Eliot had accumulated over his long career, especially as inspector general of the Foreign Service from 1978 to 1979. He replaced Edmond Gullion, who had also enjoyed a long Foreign . on t ro the waste ~F : ms'so ~ giro- ~~~ at'>Cfts ~~'~ titized ~ theme tort: Service career (including a 1961 stint as Ambassador to the Congo). Gullion had been serving with Roche on the Eisenhower Commission at the time of the 1973 Fletcher placement trip to the CIA. Another faculty group at Fletcher consists of those who specialize in strategic studies and who, though they have not necessarily served in government, are nonetheless well-known in government circles. They are affiliated with Fletcher's Program in International Security Studies and with a think tank associated with the school, the Institute for Foreign Policy Analysis. Their courses, too, would be useful to students wanting to enter the intelligence community. Uri Ra'anen heads the Flet- cher program, and Robert Pfaltzgraff heads the Institute. The two, who have collaborated on several books, served on 04 t 0 y P :like t Ys t F ? T .......................... .......................... t mit ts. HiS ;~: Bove in 1