The Origins of the Overclass

By Steve Kangas (mirrored from http://www.huppi.com/kangaroo/L-overclass.html )



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The wealthy have always used many methods to accumulate wealth, but it was not until the mid-1970s that these methods coalesced into a superbly organized, cohesive and efficient machine. After 1975, it became greater than the sum of its parts, a smooth flowing organization of advocacy groups, lobbyists, think tanks, conservative foundations, and PR firms that hurtled the richest 1 percent into the stratosphere.


The origins of this machine, interestingly enough, can be traced back to the CIA. This is not to say the machine is a formal CIA operation, complete with code name and signed documents. (Although such evidence may yet surface — and previously unthinkable domestic operations such as MK-ULTRA, CHAOS and MOCKINGBIRD show this to be a distinct possibility.) But what we do know already indicts the CIA strongly enough. Its principle creators were Irving Kristol, Paul Weyrich, William Simon, Richard Mellon Scaife, Frank Shakespeare, William F. Buckley, Jr., the Rockefeller family, and more. Almost all the machine's creators had CIA backgrounds.


During the 1970s, these men would take the propaganda and operational techniques they had learned in the Cold War and apply them to the Class War. Therefore it is no surprise that the American version of the machine bears an uncanny resemblance to the foreign versions designed to fight communism. The CIA's expert and comprehensive organization of the business class would succeed beyond their wildest dreams. In 1975, the richest 1 percent owned 22 percent of AmericaÕs wealth. By 1992, they would nearly double that, to 42 percent — the highest level of inequality in the 20th century.


How did this alliance start? The CIA has always recruited the nationÕs elite: millionaire businessmen, Wall Street brokers, members of the national news media, and Ivy League scholars. During World War II, General "Wild Bill" Donovan became chief of the Office of Strategic Services (OSS), the forerunner of the CIA. Donovan recruited so exclusively from the nationÕs rich and powerful that members eventually came to joke that "OSS" stood for "Oh, so social!"


Another early elite was Allen Dulles, who served as Director of the CIA from 1953 to 1961. Dulles was a senior partner at the Wall Street firm of Sullivan and Cromwell, which represented the Rockefeller empire and other mammoth trusts, corporations and cartels. He was also a board member of the J. Henry Schroeder Bank, with offices in Wall Street, London, Zurich and Hamburg. His financial interests across the world would become a conflict of interest when he became head of the CIA. Like Donavan, he would recruit exclusively from societyÕs elite.


By the 1950s, the CIA had riddled the nationÕs businesses, media and universities with tens of thousands of part-time, on-call operatives. Their employment with the agency took a variety of forms, which included:


Historically, the CIA and societyÕs elite have been one and the same people. This means that their interests and goals are one and the same as well. Perhaps the most frequent description of the intelligence community is the "old boy network," where members socialize, talk shop, conduct business and tap each other for favors well outside the formal halls of government.


Many common traits made it inevitable that the CIA and Corporate America would become allies. Both share an intense dislike of democracy, and feel they should be liberated from democratic regulations and oversight. Both share a culture of secrecy, either hiding their actions from the American public or lying about them to present the best public image. And both are in a perfect position to help each other.


How? International businesses give CIA agents cover, secret funding, top-quality resources and important contacts in foreign lands. In return, the CIA gives corporations billion-dollar federal contracts (for spy planes, satellites and other hi-tech spycraft). Businessmen also enjoy the romantic thrill of participating in spy operations. The CIA also gives businesses a certain amount of protection and privacy from the media and government watchdogs, under the guise of "national security." Finally, the CIA helps American corporations remain dominant in foreign markets, by overthrowing governments hostile to unregulated capitalism and installing puppet regimes whose policies favor American corporations at the expense of their people.


The CIAÕs alliance with the elite turned out to be an unholy one. Each enabled the other to rise above the law. Indeed, a review of the CIAÕs history is one of such crime and atrocity that no one can reasonably defend it, even in the name of anticommunism. Before reviewing this alliance in detail, it is useful to know the CIAÕs history of atrocity first.


The Crimes of the CIA


During World War II, the OSS actively engaged in propaganda, sabotage and countless other dirty tricks. After the war, and even after the CIA was created in 1947, the American intelligence community reverted to harmless information gathering and analysis, thinking that the danger to national security had passed. That changed in 1948 with the emergence of the Cold War. In that year, the CIA recreated its covert action wing, innocuously called the Office of Policy Coordination. Its first director was Wall Street lawyer Frank Wisner. According to its secret charter, its responsibilities included


propaganda, economic warfare, preventive direct action, including sabotage, antisabotage, demolition and evacuation procedures; subversion against hostile states, including assistance to underground resistance groups, and support of indigenous anti-communist elements in threatened countries of the free world.


By 1953, the dirty tricks department of the CIA had grown to 7,200 personnel and commanded 74 percent of the CIAÕs total budget. The following quotes describe the culture of lawlessness that pervaded the CIA:


Stanley Lovell, a CIA recruiter for "Wild Bill" Donovan: "What I have to do is to stimulate the Peck's Bad Boy beneath the surface of every American scientist and say to him, 'Throw all your normal law-abiding concepts out the window. Here's a chance to raise merry hell. Come help me raise it.'" (1)


George Hunter White, writing of his CIA escapades: "I toiled wholeheartedly in the vineyards because it was fun, fun, fun... Where else could a red-blooded American boy lie, kill, cheat, steal, rape and pillage with the sanction and blessing of the all-highest?" (2)


A retired CIA agency caseworker with twenty years experience: "I never gave a thought to legality or morality. Frankly, I did what worked."


Blessed with secrecy and lack of congressional oversight, CIA operations became corrupt almost immediately. Using propaganda stations like Voice of America and Radio Free Europe, the CIA felt justified in manipulating the public for its own good. The broadcasts were so patently false that for a time it was illegal to publish transcripts of them in the U.S. This was a classic case of a powerful organization deciding what was best for the people, and then abusing the powers it had helped itself to.


During the 40s and 50s, most of the public was unaware of what the CIA was doing. Those who knew thought they were fighting the good fight against communism, like James Bond. However, they could not keep their actions secret forever, and by the 60s and 70s, Americans began learning about the agencyÕs crimes and atrocities. (3) It turns out the CIA has:


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


The Association for Responsible Dissent estimates that by 1987, 6 million people had died as a result of CIA covert operations. (4) Former State Department official William Blum correctly calls this an "American Holocaust."


We should note that the CIA gets away with this because it is not accountable to democratic government. Former CIA officer Philip Agee put it best: "The CIA is the President's secret army." Prior to 1975, the agency answered only to the President (creating all the usual problems of authoritarianism). And because the CIAÕs activities were secret, the President rarely had to worry about public criticism and pressure. After the 1975 Church hearings, Congress tried to create congressional oversight of the CIA, but this has failed miserably. One reason is that the congressional oversight committee is a sham, filled with Cold Warriors, conservatives, businessmen, and even ex-CIA personnel.


The Business Origins of CIA Crimes


Although many people think that the CIAÕs primary mission during the Cold War was to "deter communism," Noam Chomksy correctly points out that its real mission was "deterring democracy." From corrupting elections to overthrowing democratic governments, from assassinating elected leaders to installing murderous dictators, the CIA has virtually always replaced democracy with dictatorship. It didnÕt help that the CIA was run by businessmen, whose hostility towards democracy is legendary. The reason they overthrew so many democracies is because the people usually voted for policies that multi-national corporations didn't like: land reform, strong labor unions, nationalization of their industries, and greater regulation protecting workers, consumers and the environment.


So the CIAÕs greatest "successes" were usually more pro-corporate than anti-communist. Citing a communist threat, the CIA helped overthrow the democratically elected Mohammed Mussadegh government in Iran in 1953. But there was no communist threat — the Soviets stood back and watched the coup from afar. What really happened was that Mussadegh threatened to nationalize British and American oil companies in Iran. Consequently, the CIA and MI6 toppled Mussadegh and replaced him with a puppet government, headed by the Shah of Iran and his murderous secret police, SAVAK. The reason why the Ayatollah Khomeini and his revolutionaries took 52 Americans hostage in Tehran in 1979 was because the CIA had helped SAVAK torture and murder their people.


Another "success" was the CIAÕs overthrow of the democratically elected government of Jacabo Arbenz in Guatemala in 1954. Again, there was no communist threat. The real threat was to GuatemalaÕs United Fruit Company, a Rockefeller-owned firm whose stockholders included CIA Director Allen Dulles. Arbenz threatened to nationalize the company, albeit with generous compensation. In response, the CIA initiated a coup that overthrew Arbenz and installed the murderous dictator Castillo Armas. For four decades, CIA-backed dicatators would torture and murder hundreds of thousands of leftists, union members and others who would fight for a more equitable distribution of the countryÕs resources.


Another "success" story was Chile. In 1973, the countryÕs democratically elected leader, Salvadore Allende, nationalized foreign-owned interests, like ChileÕs lucrative copper mines and telephone system. International Telephone & Telegraph (ITT) offered the CIA $1 million to overthrow Allende — which the CIA allegedly refused — but paid $350,000 to his political opponents. The CIA responded with a coup that murdered Allende and replaced him with a brutal tyrant, General Augusto Pinochet. Pinochet tortured and murdered thousands of leftists, union members and political opponents as economists trained at the University of Chicago under Milton Friedman installed a "free market" economy. Since then, income inequality has soared higher in Chile than anywhere else in Latin America.


Even when the communist threat was real, the CIA first and foremost took care of the elite. In testimony before Congress in the early 50s, it artificially inflated Soviet military capabilities. A notorious example was the "bomber gap" that later turned out to be grossly exaggerated. Another was "Team B," a group of hawkish CIA analysts who seriously distorted Soviet military data. These scare tactics worked. Congress awarded giant defense contracts to the U.S. military-industrial complex.


And not even the fall of the Soviet Union and the demise of American defense contracts have stopped the CIA from serving the elite. Journalist Robert Dreyfuss writes:


Since the end of the Cold War, Washington has been abuzz with talk about using the CIA for economic espionage. Stripped of euphemism, economic espionage simply means that American spies would target foreign companies, such as Toyota, Nissan and Honda, and then covertly pass stolen trade secrets and technology to U.S. corporate executives. (5)


If this isnÕt bad enough, a worse problem arises in that the CIA doesnÕt hand over this technology to every American auto-related company, but only the Big Three: Ford, Chrysler and General Motors.


In a 1975 interview, Ex-CIA agent Philip Agee summed up his personal observations of the agency:


To the people who work for it, the CIA is known as The Company. The Big Business mentality pervades everything. Agents, for instance, are called assets. The man in charge of the United Kingdom desk is said to have the "U.K. account"É


American multinational corporations have built up colossal interests all over the world, and you can bet your ass that wherever you find U. S. business interests, you also find the CIAÉ The multinational corporations want a peaceful status quo in countries where they have investments, because that gives them undisturbed access to cheap raw materials, cheap labor and stable markets for their finished goods. The status quo suits bankers, because their money remains secure and multiplies. And, of course, the status quo suits the small ruling groups the CIA supports abroad, because all they want is to keep themselves on top of the socioeconomic pyramid and the majority of their people on the bottom. But do you realize what being on the bottom means in most parts of the world? Ignorance, poverty, often early death by starvation or diseaseÉ


Remember, the CIA is an instrument of the President; it only carries out policy. And, like everyone else, the President has to respond to forces in the society he's trying to lead, right? In America, the most powerful force is Big Business, and American Big Business has a vested interest in the Cold War. (6)


Domestic Recruitment


The CIA had no trouble recruiting elites who sought a more exciting life. Between 1948 and 1959, more than 40,000 American individuals and companies acted as sources for the U.S. intelligence community. (7) LetÕs look at each area of recruitment, and see how they enabled the CIA to conduct its crimes:


Big Business


The CIA co-opted big business right from the start, beginning with the most famous billionaire of the time: Howard Hughes. Hughes had inherited his fatherÕs million-dollar tool and die company at age 19. Anxious to expand his fortune, he made a conscientious decision "to go where the money is" — namely, government. With a few well-placed bribes, Hughes secured defense contracts to build military planes. The result was the Hughes Aircraft company. By 1940, he had also acquired a controlling interest in Trans World Airlines. His government connections and international airline soon caught the attention of the CIA, and the two began a lifelong relationship. Hughes, whom the CIA dubbed "The Stockbroker," became the agencyÕs largest contractor. Not only did he let the CIA use his business firms as fronts, but he also funded countless CIA operations. Perhaps the most notorious was Operation Jennifer, an allegedly failed attempt to recover nuclear codes from a sunken Soviet submarine. HughesÕ right-hand security man, Robert Maheu, was a CIA agent who at one time represented the CIA in negotiations with the Mafia to assassinate Fidel Castro.


The CIAÕs contacts with big business quickly spread. The agency showed a preference for international companies, public relations firms, media companies, law offices, banks, financiers and stockbrokers. The CIA didnÕt limit its activities to recruiting businessmen; sometimes the CIA bought or created entire companies outright. One benefit of co-opting big business was that the CIA was able to create a secret source of funds other than from government. With stock portfolios multiplying their profits, itÕs impossible now to say how flush the CIA really is. If Congress ever cut off funds for a mission, the business fraternity could easily replace them, either by donations or even setting up profitable businesses in the target country. In fact, this is precisely what happened during the Iran/Contra scandal.


By allying itself with the business community, the CIA received the funds and ability it needed to remove itself from democratic control.


The Media


Journalism is a perfect cover for CIA agents. People talk freely to journalists, and few think suspiciously of a journalist aggressively searching for information. Journalists also have power, influence and clout. Not surprisingly, the CIA began a mission in the late 1940s to recruit American journalists on a wide scale, a mission it dubbed Operation MOCKINGBIRD. The agency wanted these journalists not only to relay any sensitive information they discovered, but also to write anti-communist, pro-capitalist propaganda when needed.


The instigators of MOCKINGBIRD were Frank Wisner, Allan Dulles, Richard Helms and Philip Graham. Graham was the husband of Katherine Graham, todayÕs publisher of the Washington Post. In fact, it was the PostÕs ties to the CIA that allowed it to grow so quickly after the war, both in readership and influence. (8)


MOCKINGBIRD was extraordinarily successful. In no time, the agency had recruited at least 25 media organizations to disseminate CIA propaganda. At least 400 journalists would eventually join the CIA payroll, according to the CIAÕs testimony before a stunned Church Committee in 1975. (The committee felt the true number was considerably higher.) The names of those recruited reads like a Who's Who of journalism:


Perhaps no newspaper is more important to the CIA than the Washington Post, one of the nationÕs most right-wing dailies. Its location in the nationÕs capitol enables the paper to maintain valuable personal contacts with leading intelligence, political and business figures. Unlike other newspapers, the Post operates its own bureaus around the world, rather than relying on AP wire services. Owner Philip Graham was a military intelligence officer in World War II, and later became close friends with CIA figures like Frank Wisner, Allen Dulles, Desmond FitzGerald and Richard Helms. He inherited the Post by marrying Katherine Graham, whose father owned it.


After PhilipÕs suicide in 1963, Katharine Graham took over the Post. Seduced by her husbandÕs world of government and espionage, she expanded her newspaperÕs relationship with the CIA. In a 1988 speech before CIA officials at Langley, Virginia, she stated:


We live in a dirty and dangerous world. There are some things that the general public does not need to know and shouldnÕt. I believe democracy flourishes when the government can take legitimate steps to keep its secrets and when the press can decide whether to print what it knows.


This quote has since become a classic among CIA critics for its belittlement of democracy and its admission that there is a political agenda behind the PostÕs headlines.


Ben Bradlee was the PostÕs managing editor during most of the Cold War. He worked in the U.S. Paris embassy from 1951 to 1953, where he followed orders by the CIA station chief to place propaganda in the European press. (9) Most Americans incorrectly believe that Bradlee personifies the liberal slant of the Post, given his role in publishing the Pentagon Papers and the Watergate investigations. But neither of these two incidents are what they seem. The Post merely published the Pentagon Papers after The New York Times already had, because it wanted to appear competitive. As for Watergate, weÕll examine the CIAÕs reasons for wanting to bring down Nixon in a moment. Someone once asked Bradlee: "Does it irk you when The Washington Post is made out to be a bastion of slanted liberal thinkers instead of champion journalists just because of Watergate?" Bradlee responded: "Damn right it does!" (10)


It would be impossible to elaborate in this short space even the most important examples of the CIA/media alliance. Sig Mickelson was a CIA asset the entire time he was president of CBS News from 1954 to 1961. Later he went on to become president of Radio Free Europe and Radio Liberty, two major outlets of CIA propaganda.


The CIA also secretly bought or created its own media companies. It owned 40 percent of the Rome Daily American at a time when communists were threatening to win the Italian elections. Worse, the CIA has bought many domestic media companies. A prime example is Capital Cities, created in 1954 by CIA businessman William Casey (who would later become ReaganÕs CIA director). Another founder was Lowell Thomas, a close friend and business contact with CIA Director Allen Dulles. Another founder was CIA businessman Thomas Dewey. By 1985, Capital Cities had grown so powerful that it was able to buy an entire TV network: ABC.


For those who believe in "separation of press and state," the very idea that the CIA has secret propaganda outlets throughout the media is appalling. The reason why America was so oblivious to CIA crimes in the 40s and 50s was because the media willingly complied with the agency. Even today, when the immorality of the CIA should be an open-and-shut case, "debate" about the issue rages in the media. Here is but one example:


In 1996, The San Jose Mercury News published an investigative report suggesting that the CIA had sold crack in Los Angeles to fund the Contra war in Central America. A month later, three of the CIAÕs most important media allies — The Washington Post, The New York Times and The Los Angeles Times — immediately leveled their guns at the Mercury report and blasted away in an attempt to discredit it. Who wrote the Post article? Walter Pincus, longtime CIA journalist. The dangers here are obvious.


Academia


By the early 50s, CIA Director Allen Dulles had staffed the CIA almost exclusively with Ivy League graduates, especially from Yale. (A disproportionate number of CIA figures, like George Bush, come from YaleÕs "Skull and Crossbones" Society.) CIA recruiters also approached thousands of other professors to work in place at their universities on a part-time, contract basis. Not stopping at recruiting scholars, the agency would go on to create several departments at elite universities, including Harvard's Russian Research Center and the Center for International Studies at MIT.


Although most academics were supportive of the CIA in the 50s, most were unaware of its abuses. In the 60s, academia would become outraged to learn that anti-communist organizations like the National Student Association were actually creations of the CIA. The most audacious CIA front was the Congress for Cultural Freedom, an organization that attracted liberal, freethinking artists and intellectuals who nonetheless deplored communism.


By the late 60s and 70s, growing reports of CIA crimes and atrocities had deeply alienated academia. Scholars were further troubled to learn that the CIA had penetrated and disrupted student antiwar groups. Unlike business and the media, academia overwhelmingly denounced the CIA after the Vietnam era. This eventually forced the CIA to turn to new places to find their analysts and scholars. The most important source was the conservative think-tank movement, which it helped to create. More on this later.


The Roman Catholic Church


Although the CIA began as a mostly Protestant organization, Roman Catholics quickly came to dominate the new covert-action wing in 1948. All were staunchly conservative, fiercely anti-communist and socially elite. Just a few of the many Catholic operatives included future CIA directors William Colby, William Casey, and John McCone. Another well-known personality from this period was William F. Buckley, Jr., editor of the National Review and gadfly host of TVÕs Firing Line. Buckley, it turns out, served as a CIA agent in Mexico City, and his experiences there served as fodder for his Blackford Oakes spy novels.


There were several reasons for this influx of Catholic elites. First, Wisner (himself a Wall Street lawyer) had an extensive and glamorous circle of friends to recruit from. Second, Italy was in constant crisis in the 1940s, both during World War II and after. Throughout this troubled period, the American intelligence communityÕs greatest ally in Italy was the Roman Catholic Church.


The Roman Catholic Church, of course, is one of the most anti-communist organizations in the world. The Marxist doctrine of atheism threatens Catholic theology, and its equality threatens the ChurchÕs strict tradition of hierarchy and authoritarianism. When Hitler invaded Communist Russia, the Vatican openly approved. Jesuit Michael Serafian wrote: "It cannot be denied that [Pope] Pius XII's closest advisors for some time regarded Hitler's armoured divisions as the right hand of God." (11)


But Hitler persecuted Catholics as well, and ultimately drove the Church to the Americans. In 1943, the Vatican reached a secret agreement with OSS Chief Donovan — himself a devout Catholic — to let the Holy See become the center of Allied spy operations in Italy. Donovan considered the Church to be one of his prize intelligence assets, given its global power, membership and contacts. He cultivated this alliance by sending AmericaÕs most prestigious Catholics to the Vatican to establish rapport and forge an alliance.


After the war, half of Europe lay under Communist control, and the Italian communist party threatened to win the 1948 elections. The prospect of communism ruling over the heart of Catholicism terrified the Vatican. Once again, American intelligence gathered their most prestigious Catholics to strengthen ties with the Vatican. Because this was the first mission of the new covert action division, the American Catholic agents acquired positions of power early on, and would dominate covert operations for the rest of the Cold War.


At a public level, the U.S. government sunk $350 million in social and military aid into Italy to sway the vote. On a secret level, Wisner spent $10 million in black budget funds to steal the elections. This included disseminating propaganda, beating up left-wing politicians, intimidating voters and disrupting leftist parties. The dirty tricks worked — the Communists lost, and the Catholic AmericansÕ success permanently secured their power within the CIA.


The Knights of Malta (12)


The Roman Catholic Church did not forget the American agents who had saved them from both Nazism and Communism. It rewarded them by making them Knights of Malta, or members of the Sovereign Military Order of Malta (SMOM).


SMOM is one of the oldest and most elite religious orders in the Catholic Church. Until recently, it limited its membership to Italians and foreign heads of state. In 1927, however, an exception was made for the United States, given its emerging status as a world power. SMOM opened an American branch, awarding knighthood or damehood to several American Catholic business tycoons. This group was so conservative that one, John Raskob, the Chairman of General Motors, actually became involved in an aborted military plot to remove Franklin Roosevelt from the White House. SMOM has also been embarrassed by knighting or giving awards to countless people who later turned out to be Nazi war criminals. This is the sort of culture that thrives within the leadership of SMOM.


Officially, the Knights of Malta are a global charity organization. But beginning in the 1940s, knighthood was granted to countless CIA agents, and the organization has become a front for intelligence operations. SMOM is ideal for this kind of activity, because it is recognized as the worldÕs only landless sovereignty, and members enjoy diplomatic immunity. This allows agents and supplies to pass through customs without interference from the host country. Such privileges enabled the Knights of Malta to become a major supplier of "humanitarian aid" to the Contras during their war in the 1980s.


A partial list of the Knights and Dames of Malta reads like a WhoÕs Who of American Catholicism:


When this group gets together, obviously, the topics are spying, business and politics.


The CIA has also used other religious and charity organizations as fronts. For example, John F. Kennedy -- another anticommunist Roman Catholic who greatly expanded covert operations -- created the U.S. Peace Corps to serve as cover for CIA operatives. The CIA has also made extensive use of missionaries, with the blessings of many right-wing, anticommunist Christian denominations.


But the World Grows WiseÉ


It was only a matter of time before other nations caught on to these fronts. They learned that when the CIA comes to their countries to commit their crimes and atrocities, they come disguised as American journalists, businessmen, missionaries and charity volunteers. Unfortunately, foreigners are now targeting these professions as hostile. In Lebanon, terrorists held U.S. journalist Terry Anderson hostage for nearly seven years, on the not unreasonable assumption that he was a spy. Whether or not this was true is beside the point. The CIA has put all Americans abroad at risk, whether they are CIA agents or not. In hearings before the Senate in 1996, many organizations urged Congress to stop using their professions as CIA cover. Don Argue of the National Association of Evangelicals testified: "Such use of missionary agents for covert activities by the CIA would be unethical and immoral." (13)


From the Cold War to the Class War


As noted above, academia was the first major institution to denounce the crimes of the CIA. Why? One reason is that scholars conduct their own extensive research into world affairs, so naturally they were the first to learn the truth. This is the main reason why protest against the Vietnam War and the CIA erupted first among students on the nationÕs campuses. By the end of the Vietnam War, the CIA had suffered a "brain drain" as its academic allies became its most articulate, passionate and eloquent critics.


The social revolutions of the 60s terrified the CIA. James Jesus Angleton, chief of counter-intelligence and a truly paranoid man, was convinced the Soviets had masterminded the entire antiwar movement. FBI Director J. Edgar Hoover shared his conviction. The CIA had always spied on student groups throughout the 60s, but in 1968 President Johnson dramatically stepped up the effort with Operation CHAOS. This initially called for 50 CIA agents to go undercover as student radicals, penetrate their antiwar organizations and root out the Russian spies who were causing the rebellion. Tellingly, they never found a single spy. The agents also began a campaign of wire-tapping, mail-opening, burglary, deception, intimidation and disruption against thousands of protesting American civilians.


By the time Operation CHAOS wound down in 1973, the CIA had spied on 7,000 Americans, 1,000 organizations and traded information on more than 300,000 persons with various law agencies. (14) When academia learned of this, its outrage grew.


The loss of academia was only the first blow for the CIA. Other disasters quickly followed; in the early 70s, the CIA was trying desperately to stave off a growing number of scandals. The first was Watergate.


The CIAÕs fingerprints were all over Watergate. First, we should note the CIA had clear motives for helping oust Nixon. He was the ultimate "outsider," a poor California Quaker who grew up feeling bitter resentment towards the elite "Eastern establishment." Nixon, for all his arch-conservatism, was surprisingly liberal on economic issues, enfuriating businessmen with statements like "We are all Keynesians now." He created a whole host of new agencies to regulate business, like the FDA, EPA and OSHA. He signed the Clean Air and Clean Water Acts, which forced businesses to clean up their toxic emissions. He imposed price controls to fight inflation, and took the nation fully off the gold standard. Nixon also strengthened affirmative action. Even his staffers were famously anti-elitist, like Kevin Philips, who would eventually write the bible on inequality during the 1980s, The Politics of Rich and Poor. Add to this NixonÕs withdrawal from Vietnam and Dˇtente with China and the Soviet Union. Nixon and his Secretary of State, Henry Kissinger, had not only tried to remove control of foreign policy from the CIA, but had also taken measures to bring the CIA itself under control. Not surprisingly, Nixon and his CIA Director, Richard Helms, couldnÕt stand each other. (Nixon fired him for failing to cover up for Watergate.) Clearly, Nixon was fighting at cross-purposes with the CIA and the nationÕs elite.


As it turns out, the CIA had inside knowledge of NixonÕs dirty work. Nixon had created his own covert action team, "The Committee to Reelect the President," more amusingly known by its acronym, CREEP. The team consisted of two CIA agents — E. Howard Hunt and James McCord — as well as former FBI agent G. Gordon Liddy. They also employed four Cubans with long CIA histories. In fact, a CIA front called the Mullen Company funded their activities, which ranged from disrupting Democratic campaigns to laundering NixonÕs illegal campaign contributions.


The CIA not only had intimate knowledge of NixonÕs crimes, but it also acted as though it wanted the world to know them. When the FBI began investigating Watergate, Nixon tried using the CIA to cover up for him. At first the CIA half-heartedly complied, telling the FBI that the investigation would endanger CIA operations in Mexico. But a few weeks later it gave the FBI a green light again to proceed again with their investigation.


Furthermore, Watergate was exposed by the CIAÕs main newspaper in America, The Washington Post. One of the two journalists who investigated the scandal, Robert Woodward, had only recently become a journalist. Previously Woodward had worked as a Naval intelligence liaison to the White House, privy to some of the nationÕs highest secrets. He would later write a sympathetic portrait of CIA Director Bill Casey in a book entitled Veil: The Secret Wars of the CIA. It was Woodward who personally knew and interviewed "Deep Throat," the unnamed source who revealed inside information on NixonÕs activities. Many Watergate researchers consider one of WoodwardÕs old intelligence contacts to be a prime candidate for Deep Throat. (15)


Despite all the facts of CIA involvement, Woodward and Bernstein made virtually no mention of the CIA in their Watergate reporting. Even during Senate hearings on Watergate, the CIA somehow managed to stay out of the spotlight. In 1974, the House would clear the CIA of any involvement in Watergate.


The CIA was not as lucky in 1974, when the Senate held hearings on James Jesus AngletonÕs illegal surveillance of American citizens. These disclosures resulted in his firing. But that was nothing compared to the 1975 Church Committee. This Senate investigation looked into virtually every type of CIA crime, from assassination to secret war to manipulating the domestic media. The "reforms" that resulted from these hearings were mostly cosmetic, but the details that emerged shattered the CIAÕs reputation forever. Interestingly enough, the two Senators who held these hearings — Frank Church and Otis Pike — were both defeated for reelection, despite a 98 percent reelection rate for incumbents.


The CIA wasnÕt the only conservative institution that found itself embattled in the early 70s. This was a bad time for conservatives everywhere. America had lost the war in Vietnam. U.S. corporations had to cope with the rise of OPEC. The anti-poverty programs of RooseveltÕs New Deal and JohnsonÕs Great Society were causing a major redistribution of wealth. And Nixon was making things worse with his own anti-poverty and regulatory programs. Between 1960 and 1973, these efforts cut poverty in half, from 22 to 11 percent. Meanwhile, between 1965 and 1976, the richest 1 percent had gone from owning 37 percent of AmericaÕs wealth to only 22 percent. (16)


At a 1973 Conference Board meeting of top American business leaders, executives declared: "We are fighting for our lives," "We are fighting a delaying action," and "If we donÕt take action now, we will see our own demise. We will evolve into another social democracy." (17)


The CIA to the rescue


In the mid-1970s, at this historic low point in American conservatism, the CIA began a major campaign to turn corporate fortunes around.


They did this in several ways. First, they helped create numerous foundations to finance their domestic operations. Even before 1973, the CIA had co-opted the most famous ones, like the Ford, Rockefeller and Carnegie Foundations. But after 1973, they created more. One of their most notorious recruits was billionaire Richard Mellon Scaife. During World War II, Scaife's father served in the OSS, the forerunner of the CIA. By his mid-twenties, both of Scaife's parents had died, and he inherited a fortune under four foundations: the Carthage Foundation, the Sarah Scaife Foundation, the Scaife Family Foundations and the Allegheny Foundation. In the early 1970s, Scaife was encouraged by CIA agent Frank Barnett to begin investing his fortune to fight the "Soviet menace." (18) From 1973 to 1975, Scaife ran Forum World Features, a foreign news service used as a front to disseminate CIA propaganda around the world. Shortly afterwards he began donating millions to fund the New Right.


Scaife's CIA roots are typical of those who head the new conservative foundations. By 1994 the most active were:


Between 1992 and 1994, these foundations gave $210 million to conservative causes. Here is the breakdown of their donations:


The political machine they built is broad and comprehensive, covering every aspect of the political fight. It includes right-wing departments and chairs in the nationÕs top universities, think tanks, public relations firms, media companies, fake grassroots organizations that pressure Congress (irreverently known as "Astroturf" movements), "Roll-out-the-vote" machines, pollsters, fax networks, lobbyist organizations, economic seminars for the nationÕs judges, and more. And because corporations are the richest sector of society, their greater financing overwhelms similar efforts by Democrats.


Besides creating foundations, the CIA helped organize the business community. There have always been special interest groups representing business, like the U.S. Chamber of Commerce and the National Association of Manufacturers, and the CIA has long been involved with them. However, after 1973, a spate of powerful new groups would come into existence, like the Business Roundtable and the Trilateral Commission. These organizations quickly became powerhouses in promoting the business agenda.


Their efforts clearly succeeded. With the 1975 SUN-PAC decision, corporations persuaded government to legalize corporate Political Action Committees (the lobbyist organizations that bribe our government). By 1992, corporations formed 67 percent of all PACs, and they donated 79 percent of all campaign contributions to political parties. (20) In two landmark elections — 1980 and 1994 — corporations gave heavily and one-sidedly to Republicans, turning one or both houses of Congress over to the GOP. Democratic incumbents were shocked by the threat of being rolled completely out of power, so they quietly shifted to the right on economic issues, even though they continued a public fa¨ade of liberalism. Corporations went ahead and donated to Democratic incumbents in all other elections, but only as long as they abandoned the interests of workers, consumers, minorities and the poor. As expected, the new pro-corporate Congress passed laws favoring the rich: between 1975 and 1992, the amount of national household wealth owned by the richest 1 percent soared from 22 to 42 percent. (21)


The CIA also helped create the conservative think tank movement. Prior to the 70s, think tanks spanned the political spectrum, with moderate think tanks receiving three times as much funding as conservative ones. At these early think tanks, scholars typically brainstormed for creative solutions to policy problems. This would all change after the rise of conservative foundations in the early 70s. The Heritage Foundation opened its doors in 1973, the recipient of $250,000 in seed money from the Coors Foundation. A flood of conservative think tanks followed shortly thereafter, and by 1980 they overwhelmed the scene. The new think tanks turned out to be little more than propaganda mills, rigging studies to "prove" that their corporate sponsors needed tax breaks, deregulation and other favors from government.


Of course, think-tank studies are useless without publicity, and here the CIA proved especially valuable. Using propaganda techniques it had perfected at the Voice of America and Radio Free Europe, the CIA and its allies turned American AM radio into a haven for conservative talk show hosts. Yes — Rush Limbaugh uses the same propaganda techniques that Muscovites once heard from Voice of America. The CIA has also developed countless other media outlets, like Capital Cities (which eventually bought ABC), major PR firms like Hill & Knowlton, and of course, all the AgencyÕs connections in the national news media. (22)


The following is a typical example of how the "New Media" operates. As most political observers know, the Republicans suffer from a "gender gap," in which women prefer Democrats by huge majorities. This is, in fact, why Clinton has twice won the presidency. But, curiously enough, as the 90s progressed, conservative female pundits began popping up everywhere in the media. Hard-right pundits like Ann Coulter, Kellyanne Fitzpatrick, Laura Ingraham, Barbara Olson, Melinda Sidak, Anita Blair and Whitney Adams conditioned us to the idea of the conservative woman. This phenomenon was no accident. It turns out that Richard Mellon Scaife donated $450,000 over three years to the Independent Women's Forum, a booking agency that heavily seeds such female conservative pundits into the media. (23)


Conclusion


The most obvious criticism of the New Overclass is that their political machine is undemocratic. Using subversive techniques once aimed at communists, and with all the money they ever need to succeed, the Overclass undemocratically controls our government, our media, and even a growing part of academia. These institutions in turn allow the Overclass to control the supposedly "free" market. It doesn't win all the time, of course — witness Bill Clinton's impeachment trial — but it does score an endless string of other victories elsewhere, all to the detriment of workers, consumers, women, minorities and the poor. We need to fight it with everything we've got.


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