EXECUTIVE

INTELLIGENCE
REVIEW October 10-16, 1978

Henry Kissinger's
approprIate
, .

technology'

New Solidarity International Press Service

[THIS PAGE IS INTENTIONALLY BLANK]
 Editor-in-chief
Fernando Quijano
Managing Editor
Tessa DeCarlo
Contributing Editors
Lyndon H. LaRouche Jr.
Nancy Spannaus
Criton Zoakos
Christopher White

International
Nora Hamerman
U.S. Report
Stephen Pepper
Konstantin George
Economics
David Goldman
Counterintelligence
Jeffrey Steinberg
Military Intelligence
Paul Goldstein
Europe
Henry Kissinger's
appropnate
Vivian Zoakos " .
Science & Technology

technology"
Morris Levitt
Soviet Sector
Rachel Berthoff
Middle East
Robert Dreyfuss
Although he is hated around the
Asia
world for many things, Henry
Daniel Sneider
Kissinger is not commonly
Africa
Douglas DeGroot identified as an environ­
Latin America mentalist. But as this week's cover story demonstrates,
Robyn Quijano Kissinger is using his continued grip on U.S. and world
Dennis Small development policy to enforce the most hideous "greenie"
Law backwardness on the entire developing sector. The results
Felice Gelman
are quite literally genocidal.
Press
In THIRD WORLD, Asia desk chief Daniel Sneider and
Fay Sober
Science and Technology analyst Cynthia Parsons have
Energy
William Engdahl joined forces to present an examination of the political
roots of Kissinger's appropriate technology policy, its
Production Editor
disastrous effects on individual developing nations and the
Deborah Asch
world economy, and its scientific refutation. Ranging from

Executive Intelligence Review documentary reports on the most influential Kissingerian

is published by New Solidarity policy proposals on the subject, to an Indian weekly's
International Press Service angry expose of the sabotage of effective development
P.O. Box 1922, GPO,
planning by Kissinger, the Brandt Commission, and the
New York City, N. Y. 10001
World Bank, our coverage pulls together a full intelligence
Subscriptions by mail
for the U. S.: briefing on one of the most crucial issues in the world
3 months-$125, today.
6 months-$225,
On our cover: "appropriate" earth-moving technology at work in
1 year-$4oo.
Bangladesh. from a Bengali government pamphlet extolling the
country's World Bank-inspired "Food-for-Work" programs.
ISSN 0 146-9614
© 1978 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited.
 EXECUTIVE
INTELLIGENCE
IN THIS ISSUE REVIEW

Revealed: Zion i st control

over Ku Klu x Klan
T HIS WEEK

In our TERRORISM report, the U.s. Policy: From Disneyland to Halloween? .... .. . . . 5
story that will rock the right and On The Death of Pope John Paul l . . . . . . . . .. . . . . . . . . .. 5
make the Zionist lobby scream: how High Score for Terror Foes in Europe ... . . . . . . .. . . . ..6
the political and financial power of
President Henry A. Kissinger? . . . . .....
. . . . . . . . . . . .. 7
Zionism is covertly aiding the far­
right terrorism of the Ku Klux Klan,
the Minutemen, and allied opera­ T HIR D WORL D
tions. Henry Kissinger's 'Appropriate Technology' .... . . . . . 8
Contributing editor Lyndon H. La­
1. The Kissingerians Plan U.S. Policy . .. . . . . . . . . . . . 10 .

Rouche, Jr. analyzes the recent

2. Why Appropriate Technology Can't Work . . . .... . . 13
"turn" in the Bircher press that
The real science of development. explained
signals an imminent terror acti­ by the FUSion Energy Founda tion
vation. Paul Goldstein dredges up
3. The Genocidal Results in Bangladesh . . . . . . . . . . . 15 .

the hidden story of the Klan's crea­

4. Kissinger and the Brandt Commission . . .. .. . . . . . . 16
tion by the B'nai B'rith conduits of
An expose from the Indian weekly New Wave
the British-Canadian intelligence
5. From the U.S. Debate on Development. ... . . . .. .. 18 .

services. And, Scott Thompson

Including excerpts from the Brookings Institution
provides a shocking report on how proposal and the Humphrey foreign aid bill
those same networks are organizing
Klan terror today. page 48
INTERNATIONAL
After Camp David, War Over Lebanon? . . . . .......
. . . 21
Soviets: Cam p David Syrian leader: Kissinger killed Faisal
is 'a nother M u n ich' U.S. Business Joins Administration
In Disneyland .. . ... ... . .. . ....
. . . . . . . . . . . . . . . . . . . . 24
Two issues ago our cover story Including an exclusive interview with top

charged that the Camp David Chicago ba nker Robert Abboud a n d a report
from the American Productivity Conference
"peace settlement" was a replay of
the Munich pact of 1938. Now the
Soviets' Novosti Press Agency has
ECONOMICS
provided three exclusive reports,
presented in SOVIET SECTOR, on Arabs, Japan, Soviets Link Up With EMS . . . . . . . . . . .. 27
The new monetary order seeks war-a voidance -
the "Microbes of Munich, " the rac­
but where is the United States?
ist parallels between Maoism and
Zionism, and the real basis for
Europe: A Shock Treatment for Brzezinski .. . . . . . . . 27 .

Mideast peace. Also: Soviet Sector O PEC: Direct Oil for Direct Technology . . . . . . . . . . . . . 29 .

correspondent Susan Welsh's survey Japan: Building up ' Bremen East' . . . . .. . . . . . . . . ....31
of how the Soviet perception of world
events has developed over the last
year. page 35

© 1978 EIR News Service Inc. All Rights Reserved. Reproduction in whole or in part without permission strictly prohibited.
 The underworld is
Vol. V, No. 39
October 10-16,1978
stealing your vote

The same men who run drugs,

gambling, and other illegal opera­
tions are involved up to their necks
SOVIET SECTOR in the mechanisms of vote fraud.
The details of the scandal, in U.S.
Soviets: Camp David is 'Another Munich' ............ 35
Highlights: the Soviets on Britain a nd Zionism R EP O R T , show how the
"respectable" political activities of
Exclusive: Three Commentaries From Novosti....... 36
Tiger's paws a'la Peking Zionist lobby heavyweights like
The microbes of Munich Edgar Bronfman interface with the
When the illusions of Camp David fa de away doings of the criminal underworld.
Included in our coverage: a wide­
ranging interview with Edg a r
COUNTERINTELLIGENCE Bronfman, provided exclusively to
The CIA - Only a Caretaker Force .................. 41 the Executive IntelJigence Review.
u. S. Labor Party Chairman L yndon H. L a Rouche page 43
looks at who's responsible for the Agency's collapse

U.S. REPORT NEXT ISSUE

Drug and Gambling Czars Tied to Vote Theft ......... 43
How Bronfman. mobsters fix U.S. elections
*The plot to take over the Vatican
Drugs and War: Edgar Bronfman Views the World .... 46
A wide-ranging interview with the Seagra m's boss by Europe's "black nobility" - a
report from our Europea n
correspondents that includes an
TERRORISM exclusive interview with one o f the
How Zionists Orchestrate KKK Terrorism ........... 48 most prominent black nobles, Otto
An introduction by the U.S. L a bor Party's von Hapsburg.
LaRouche on the prepara tions for a terror activation * A hard look at the current battle
The Rothschild Roots of the Ku Klux Klan ........... 50 between S a few a y and the
How Klan-Zionist Terror Operates Today ............ 55 Teamsters, using a different sort of
corporate profile of the supermarket
giant to explain the international
politics of what's at stake in the
dispute.
* A report on why the drug issue is
becoming the hottest in U.S. politics,
that will invE':::�igate some of the
financial an,: political powers
arrayed on the side of "decriminal­
ization" and document the growing
but largely unreported opposition
from around the country to the plans
to turn America over to the dope­
pushers.
 EXECUTIVE
EXECUTIVE INTELLIGENCE
REVIEW
INTELLIGENCE
REVIEW
... GIVES YOU
the intelligence you need to be making policy
whether your responsibilities are in government,
the labor movement, business, education, or
elsewhere.

. . . COVERED WHAT WAS

really negotiated at the July 1978 Bremen and
Bonn summits of industrialized countries ... and
how the European Monetary System launched at
Bremen was modeled on a 1975 proposal by the
American political economist Lyndon H.
LaRouche, Jr. as the "seed-crystal" of a new,
development-oriented world monetary system ...
how the United States can get into this system and
out of the depression ...
... REPORTED HOW
fusion energy researchers in the United States
achieved the milestone breakthroughs reported in
August, 1978 from Princeton, and what other
advances are coming in this clean, cheap and
virtually unlimited solution to the world energy
crisis ... how and why there was a massive
sabotage attempt against the U.S.fusion program,
and who's backing fusion now ... what were
Japan's and the Soviet Union's offers in 1978 to the
USA for joint fusion R&D.
$10
New Solidarity International Press Service
. .. DOCUMENTED
what's behind the world outbreak of terrorism .
the names of the global networks that deployed
both "Ieff' and "right" terrorism to kill Juergen
Ponto. Hanns-Martin Schleyer, and Aldo Moro­
and plan an even bigger terror wave for the United
States ... Executive Intelligence Review provides
the tirst-hand documentation from the world's
press, including accurate translations from non­
English sources, showing how continental Europe,
Japan, the East bloc, the Arabs and developing
sector countries are seeing and acting on events.

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Fro m Di sn ey l an d to Ha l lowe e n ?
Though the EM S moves forward, insanity rules in Washington
Political m etaphor bec a m e a l l-too­
sensuous reality last week when the
Presi dent of the United States u s e d
D i sneyworld a s t h e forum from
which to tell 2 , 500 leaders of
American business that C a m p
David w a s a roaring s uc c e s s . A l l
the evidence indicates that the
unchallenged hegemony of
Zbigniew B r z e z i nsk i , Henry
K i s s inger, and through the m the
City of London, over the Carter
A d m i n i s t r ati o n ' s for e i g n ,
monetary, and domestic p o l i c y h a s
p l unged n o t only the U . S . leader­
s h i p b u t , a p p a r e nt l y , l e a d i n g
c orporate , financ i a l . and other
business circles i nto a m a s s ­
p s ycho s i s Fanta s yland .
Camp David brought "pe a c e i n
our t i m e , " says the Ad m in i stra­
tion, and a s we go to pre s s , the
fighting in Lebanon i s q u i c k l y
approaching al l-out M i d e a s t w a r ,
w i t h t h e i m m inence of a U . S .­
Soviet showdown not fa r behind
( see INTE RNATIONA L ) .
The way to "defend the dol l a r " i s
t o throw the U . S . into rec e s s i o n and
strangle deve lop ment of the Third
World a ltogether, say the White
H o u s e and v a r i o u s b u s i n e s s
spokes m e n - wh i l e the E uropea n ,
Japanes e , a n d Arab p roponents o f
the "G rand D e s ign" world deve lop­
m ent strategy come under fire
from Washi ngton as "ant i d o l l a r "
for the ir efforts t o provide the U . S .
currenc y and the U . S . econo m y
with a rea l way out o f the c r i s i s .
The dolla r ' s continued p lunge on
Oct. 1 0- 1 6. 1 978
the world m a rkets only c o n fi r m s
t h e l u n a c y o f c u r r e n t U. S .
monetary polic y .
The p s ychology of t h e proc e s s
n o w in force i n t h e White H o u s e i s
a l l too c l e a r . A c l i n i c a l l y p s ychotic
policy-making doctrine h a s b e e n
i m posed top-down on a l l a s p e c t s o f
t h e A d m i n i stration . a n d a n y fac t s
that betray t h e insanity of the
Brzezinski p o l i c y line are b e i n g
d e l i beratel y . o b s e s s i v e l y ignore d .
With D i sneyland a l ready h e r e , the
obvious next stop i s Halloween .
What's going on out there?
Fortunately the fate of the world
does not rest entire l y in the hands
of J i m m y Carter. West G e r m a n
Chancellor Schmidt. French
P r e s i d e n t G i s c a rd d ' E s t a i n g ,
Japanese Premier Fukuda, a n d
th e i r a l l i e s in t h e Arab countries ,
the Third World , and the S o v i e t
s e c tor are r a c i n g a h e a d to effe c t
f u l l i m p le m entat ion of t h e n e w
E urop ean Monetary S ys t e m a n d
t h e a s soc iated progra m of global
h i gh-techno log y - b a s e d e c o no m i c
e x p a n s i o n ( S ee E C O N O M I C S ) .
They are a l so moving d i r e c t l y to
intervene into the Middle E as t ,
with a c o m b i nation of p u b l i c i n i t i a ­
t i v e s and p r i vate diplomatic m o v e s
f o r a G eneva solution to the C a m p
David mess.
S o dramatic h a s this motion
become that G reat Brita i n , the
policy motherland of the p s ychos i s
dom inating Washington, i s h o w l i n g
w i t h r a g e and terror. F a s c i s t
E X E C U T I V E I N TE L L L l G E N C E R E V I E W
E noch Powell h a s dec lared t h a t the
European Monetary S ys t e m
threatens to win the " wa r of
conquest they ( F rance and W e s t
G e r m a n y ) a r e w a g i n g against the
Un ited K i n gdom . " w h i l e , from the
oppos ite bench. the Labour P arty
has i s sued its own rej ection of the
EMS . on the grounds . a c c ording to
Eas t German radio report s . that it
is a n " i m p erialist s c h em e . "
L e s s p u b l i c l y , the strateg ists o f
London a r e e v e n n o w d e c i d i n g
whether to dep loy t h e i r I s r a e l i
puppet i n t o o p e n war on L e b a n o n to
s top the reporte d l y effe c t i v e ,
S o viet-backed S yr i a n a c t i o n s
a g a i n s t the Israeli- and London-run
F a lange . They m a y indeed be
d e s perate enough to go for a full­
scale E ast-West confrontation, a s
the " le s s e r e v i l " compared t o the
political and econo m i c obliteration
of C i t y of London power that the
E uropean Monetary S ys t e m drive
portend s .
That London a n d i t s a l l i e s a r e
indeed ful l y that insane should not
be doubted - look a t what that
outlook h a s already wrought on the
m ental proc e s s e s of A m er ic a ' s
leadersh i p . But a s long a s the
power of the United States r e m a i n s
i n t h e i r grip . t h e future of the world
rema i n s i n grave doubt .
The e fforts of S c h m idt. G i s c a r d .
a n d t h e r e s t c o u l d well b e for
naught unless the U . S . A d m i n i stra­
tion i s quickly dragged back into
reality.
T H I SW E E K 5

On th e death of Pope John Paul
The Italian press has revealed that
prior to his unt i m ely death last
week , Pope John Paul I was
planning a personal intervention
into the Mideast crisis as well as
the full and rapid reunification of
the Roman Catholic and Russian
Orthodox Churches . In light of
John Paul ' s plans to undertake
s uch a crucial diplomatic rol e , the
i m m ediate response to his death
from his self-appointed crit i c s ,
Archbishop Lefebvre a n d t h e
radical Berrigan brothers - that
h i s sudden passing was " G od ' s
will " - is more than offensive . An
associate of Lefebvre ' s cheered the
Pop e ' s passing by telling the press
" if God withdrew him after one
month, it is because he didn't want
him to reign . . . . "
Beh i n d Archbishop Lefebvre
In a statement released Oct . I, U.S.
Labor Party Chairman Lyndon H .
L a R o u c h e n ot e d t h at t h e
predictions of John Paull ' s death
Hi g h score for terror foes in Europe
In a swift response to a series of
m urders and bombings claimed b y
the Red Brigades since m id­
S ept e m b e r , Ita l i a n a nt it er r o r
authorities carried out a successful
sweep of safehouses in Milan and
made at least nine arrests of sus­
pected terrorists b y Oct . 3. Thi s
brings the European-wide cleanup
of key terrorists to 15 arrests i n
three weeks .
In W e s t G e r m a n y , r e c e nt
BaadeJ;-Meinhof arrests resulted
largely from a national poster
campaign by police wh ich identi­
fied wanted gang mem bers and
m a de their public move m e nt
d ifficult .
The effect i v e m o v e s by
E u r o p e a n l a w e n f o r c e m e nt
. 6 T H I S WEEK
b y soothsayers like Jeanne Dixon,
a s well as the schismatic Lefebvre
force ' s i m m ed iate comm ent s , are
a "trick" of political intelligence
operatives that has been handed
down through the ages among E ur­
ope ' s black aristocracy.
" Although the titular leadership
and center of gravity of the ' B lack
Maltese' networks internationa l l y
is t he British monarchy , t h e hard
core of the Cult of Isis down
through the m i l lennia i s a group of
ancient Roman fam ilies, some
tracing their anc estry accurately
to the fa mily of Julius Caesar, "
LaRouche said in his statement .
" It i s that 'black nobi lity' which
has often m urdered Popes by
poisoning in the past , and which is
the leading sponsor of Archbishop
Lefebvre .
" The Agnelli fa m i ly is a n
i ntegral political component o f a
'black nobility' faction in Ita l y ,
which is principally situated within
the Fanfani wing of the Christian
authorities have followed wide­
spread exposures , including state­
m ent s b y Ita l i a n c a r a b i n i e r i
( na t i o n a l p o l i c e ) G e n . D a l l a
Chiesa, pointing t o Israeli and
Brit i sh intelligence control of inter­
nat ional terroris m . As we reported
i n our Aug. 29-Sept . 4 cover story,
Dalla C h i e s a , whom Pre m i er
Andreott i put in charge of Special
O p e r at i o n s a g a i n st the R e d
Brigades after the kidnapping and
death of Aldo Moro last spring,
i dent ified Baader-Meinhof terror­
i st Joachim Klein as a protege of
the Israeli intelligence servic e
Mossad.
Inc luded in the Milan arrests
were two of the original m e mbers
of the Red Brigade s , one of them
E X E C U T I V E I N TE L L I G E N C E R E V I EW
Democracy and the Italian fascist
organizations, but whi ch is also
represented politically under other
covers by the Lom bardi-Craxi
faction of the Socialist Part y and
by Ugo LaMa lfa of the Italian
Republican Party. "
LaRouche pointed out that the
same method of "predi c t i n g"
calamitous events was employed in
the first Nixon Administration, b y
Henry Kissinger, in h i s effort to
undercut the influence of then
Sec retary of State William P.
R ogers and his Mideast peace­
through-development polic y .
Not surprisingly, Lefebvre i s a
creation of the black nobilit y , his
p r i m e b a c k i n g c o m i n g from
Princess Pallavicini , the reigning
monarch who controls black fascist
net works from the Atlantic to Latin
A m erica as well as the Middle
East. The Princ ess comes from the
Lebanese S ursok family, which not
only shares in the control of the
Nazi Lebanese Falange, but has a
h i story of collaborat i o n with
oli garchic forces dating back a
thousand years , including the
anc ient Egyptian c ults of Isis and
Osiris. ·
Nadia Mantovani, who was on the
most-wanted list . She has been
ident ified as the coordinator of
logistics between the West German
Baader-Meinhof gang and the Red
Brigades operating from bases i n
Switzerland.
But Dalla Chiesa may have
uncovered something even m ore
important in last week ' s Milan
dragnet , which could lead up to
high levels of collusion with inter­
nat ional t error i s m i n s i d e the
g o v e r n m ent that h a v e b e e n
charged ever s ince former Prime
Minister Moro ' s death by several
Ita l i a n sources i n c l u d i n g the
Com m unist Party. The Ita lian
press reports that police found the
t r a n s c r i pt s o f Moro ' s 55-d a y
Oct. 1 0- 1 6. 1 978
imprisonment in one of the R e d
B r i g a d e s c o v e n s. D i vulging
nothing o f the contents o f the s e
documents , D a l l a C h i e s a hurried
off to Rome with the announc e m ent
that he will investigate within the
I t a l i a n J u s ti c e a n d Inte r i o r
Ministrie s .
Partly because of the s e
successes, and partly in a n e ffort to
hit the leadership and potentia l
leadership of the e m er g i n g
European Monetary S yste m , the
City of London has put out pre­
dictions that terror i s m will strike
West Germany and spread to n e w
targets i n Denmark and t h e U nited
State s .
British intelligence h a s e v e n
made a <so m e what l u d i c rous ,
under the c ircum stanc e s ) atte m p t
at discrediting G e n . D a l l a Chies a .
The Ita l i a n weekly L'Espresso,
which is c lose to the London-run
Italian Socia list Party, c a m e out
with an a rti c l e purporte d l y by
Joachim Klein " re futin g " h i s
Israeli inte lligence links . K l e i n
cited s u c h authoriti es a s J e a n - P a u l
Sartre a n d Daniel Coh n - B e ndit -
both noted m e m bers of the West
G erman terrorist-s upport infra­
structure !
Great Britain is a l so the source
of new threats against the West
G erman governm ent of H e l m u t
Schmidt. On Oct. 1 the Sunday
Observer cited the anniversary of
the suicides of three Baader­
Meinhof convi cts and scheduled
Schmidt campaign appearances in
Hessen state to " p redict" a terror­
ist attack on the chanc e l lor before
the end of October.
A n t i t e r r o r efforts in W e s t
Germany are compli cated b y the
report of increased British inte l l i ­
g e n c e a n d sec urity operati v e s
there a fter the b o m b i n g of British
Army on the Rhine bases l a s t
August. In the past, such d e p l o y ­
ments h a v e served as a cover for
protecting terror i s m ; in 1971
German police discovered that a
person who had leases on s i x terror­
ist safe-houses in the Stuttgart area
was a British intelligence opera­
tive . According to Interior M i n i ster
G erhart Baum , " there are s i g n s
Oct. 1 0 -1 6 . 1 978
that new people have b e e n
recruited - people who until late l y
s e e m e d t o b e leading a nor m a l life
and have now gone underground . "
I n related British i ntel l i g e n c e
initiati v e s , terrorism "experts "
G e n . R ichard C l utterbuck a n d
Brooks McC lure warned industria l
exec utives in Copenhagen a n d
C h i c a go l a s t w e e k that an outb r e a k
o f terror i s m i s "i n e v i ta b l e."
C lutterbuc k , a m e m ber of the
Royal Institute for Internatio n a l
Affa irs w h o operates a s a l ecturer
on Police Violence at Brita i n ' s
Univers ity o f E xeter, gave t h i s
m e ssage t o a conferenc e of l e a d i n g
Danish businessmen i n
C o p e n h a g e n. C l utte r b u c k is
work i n g with British i n s u r a n c e
group s w h i c h s e l l " a ntiterror "
coverage t o top executi ves; h e tol d
Presid ent Henry A. Kissing e r?
The c r i m e s of Henry K i s s inger, t h e
subj ect of s e v e r a l ite m s in the
Executive Intelligence Revie w th i s
week, have long been a c a u s e for
anger and dis m a y from A m eric a ' s
a l lies around the worl d . R e c entl y
m a n y of the m have expre s s e d ,
p u b l i c l y a n d m o r e often private l y ,
the i r extr e m e concern over his
"unoffi c i a l " - and disastrous
power over U . S . policy-m aking.
But things could get worse .
About a m o n th ago the
Venezuelan newspaper El
Universal ran a n Agence F r ance
Pre sse wire report of a s p e e c h
K i s s inger g a v e in Albany S ept. 6, in
which K i s s inger described his
politi c a l future a s " i mperial . " H e
explained that a s a naturalized
citiz e n , he i s pre vented b y the U . S .
Constitution from attaining "the
post that most interests m e , " the
p r e s i d e n c y. But, he a d de d ,
"Nothing in the Constitution sto p s
m e from becoming Emperor . . . "
Merely a podium witticism?
Washington Post colum nist D a vid
Broder thinks otherwise .
E X E C U T I V E I N T E L L I G E N C E R EV I E W
h i s audience, m a n y of the m a c ti ve
i n l inking D e n m a rk into th e
European Monetary S yste m , that
industr i a l and business leaders ,
rath e r tha n diplom ats , would b e
the m ain new targets o f terroris m.
A s i m i lar the m e was struck by
B rooks M c C lure, a British-linked
U . S. terror i s m expert who
g a th e r e d p r o f i l e s o f l e a d i n g
c orporations a n d executiv e s o n
the i r s u s c eptib i liti es t o terror
attac k for a rec ent C o m m e r c e
D e p a rtment p roj ect r u n o u t of the
National Security Counc i l .
M c C lu r e to l d more t h a n 2 0 0
r e p r e s e ntati ves of M i d w e s t
i n d u stri a l firms gathered at a S ep t.
2 7 conference in Chic ago to "pre­
p a r e " for an " inevita b l e " outbreak
of terro r i s m i n the United S tate s .
K i s singer, says Broder i n his
Oct. 4 c olumn , "ha s a star qua lity
that is conspicuously l a c king in
most oth e r s in the p o l itic a l
circuit. " And now Kis singer "does
not disguise the fact that this
y ea r ' s fund-raisin g " for a variety
of R epublican c andidates "is a l s o a
w a y of making a transition from
his old world of dip loma c y to wha t
h e hopes w i l l b e h i s n e w w o r l d of
elective politic s . The j ob he has his
eye on is that of senator from New
York , " possibl y oppos ing J a c o b
J avits .
Broder continue s , "The only
question some p eople ask a bout
Kissinger ' s candid a c y is whethe r
h e w i l l b e satisfied for long to b e a
m e r e s e n a t o r . A l r e a d y s uch
j ournalistic admirers a s Tim e
magazin e ' s Hugh Sidey are raising
the question of amending the
Constitution to a l low a naturalized
American citizen like Kissinger to
b e e l ected president. "
Kissin g e r , Broder c o n c l u de s ,
"ought to b e a senator - at the
very least. "
THIS W E EK 7
( THIRD WORLD
Henry Kissingerls
lappropriate technologyl
Environmentalism versus developing and industrial nations
In August of next year the U n ited Nations will convene
a special conference in Vienna on " S c ience and
Technology for Development . " a major international
event which is already a factor in the policy planning
of governm ents across the globe. Preliminary
statem ents on science and t echnology policy.
particularly as regards the task of developm ent for
and of the mass of humanity in what is called the
developing sector . have already been submitted to the
United Nations Secretariat charged with preparation
of the conference.
While none of these docum ents are yet publ ic . our
sources reveal that the dominant e merging theme is a
cry for " appropriate" (or in the language of the
developing agenci e s . " interme d i at e " ) technology.
This is not surprising - a s we reveal in this report . an
effort was mounted from the m o m ent the UN General
A ssembly first decided on holding the conference to
. m ake sure that the transfer of real s c ience and real
technology to the developing s ector never takes place.
The " appropriate technology " m afia that has
moved to dom inate all international discussion of
development is led in this effort b y none other than
former U . S. Secretary of State Henry Kissinger. While
sti ll officially holding that post (as opposed to his
informal maintenance of that p o s ition in the present
Administration ) . Kissinger organized to channel U.S.
participation in and control over thi s conference and
the event s leading up to it a long appropriate
technology line s . S i m ultaneous to K i s s inger' s efforts
within the government . a gaggle of S enators and
Congressmen. with the late S e nator Humphrey in the
lead. began moving for a revision of our foreign aid
legis lation which dictated that all A m erican aid be
channeled into the same form at.
The import of this fight on Capitol Hill should not be
underest imated - at stake is whether the United
States wi ll be known as an industri a l leader. the center
8 T H I R D WO R L D E X E C U T I V E I NT E L L I G E N C E R E V I EW
of science and technology in the world. or whether we
will now say to the rest of the world that science. like
God . i s dead and our industrial progress i s only a
model for the environmental i st bogeys of pollution.
waste. and technocracy.
Kissinger. Humphrey. and the rest in the U . S. here
are m erely the domestic wings of an internat ional
gang of " l i m its to growth" austerity advocates. The
castle keep of these latter-day feudalists is the
I nternational Monetary F und and the World Bank
(otherwise known as the International Bank for
Reconstruction and Development ) . headed up by
Robert McNa mara. Last year. the World Bank and
McNamara created an " independent " commiss ion of
individuals under the direct ion of West German
former Chancellor Willy Brandt to oversee their
attempt to determine the c ontent of relations between
the developed and developing worlds . the "North­
S outh dialogue . "
The Brandt Com m i s s ion. whose background and
history i s also examined belo w . is the m ost prominent
agency of the deindustrialization strategy of the
appropriate technology m!lfia. Just recently the
Com m is s ion held a c losed m eet ing in Tarrytown.
N . Y . which was graced with a special presentation by
Henry Kiss inger . a de fa cto m e m ber of the group .
described by Brandt as the m a n best qualified to know
"how we can sell our proposals to the rest of the
world . "
The th reat to the ind ustrial nations
The efforts of the IMF . the World Bank. Kiss inger. the
Brandt Com m is s ion. and so on to force appropriate
technology down the throats of the developing and the
developed sectors are a nec essary complement to
their drive to halt E uropean-centered moves to
restore stabilit y to the internat ional monetary system .
Oct. 1 0- 1 6. 1 978
The recent Brandt Com m i s s ion m eeting itself foc used
on th i s subj ect.
The new European Moneta ry S ystem agreed on thi s
s u m m e r in Bremen has a m u c h greater a i m than
m ere c urrenc y sta b i l ization . What terrifies the
Kis singer c rowd and its politi c a l h o m e b a s e , Great
Britain , i s that the EMS strategy i s the core of an
internationa l e ffort, to which the S audis and other
Arabs and the Japanese are l i nked , to c reate a credit
market to fund long-term deve lop m ent p roj ects in the These diagrams are from
a manual for developing
Third World and to expand world trade with an
nations published by the
e m pha s i s on real t e c h n o logy-tra n s f e r to th e
UN's Food and Agri­
developing sector. Expansion of E a s t-West econo m i c
culture Organization in
c ooperation i s also a p r i m a r y a i m . 1 969. The introduction to
The IMF and the friends of the I M F in London , New the manual. titled "Farm
York, and the G rand Cayman Islands are determined Implements for Arid and
to halt the EMS at a l l cost. The reason i s s i m p le : the tropical Regions." notes
E M S pulls the rug out from under the speculati ve that "the use of power
money markets run b y the E urodol l a r financiers in machinery can only be
London and elsewhere , the same financiers who have afforded where the

been running the c a mpaign against the dollar. These farming system provides
sufficient cash income to
mercanti lists run the IMF a s the i r debt-collection
pay for it ...... Animal­
agency in both the deve loped and developing sectors .
drawn plows are the
A Third World country desiring c redit for the kind of
h i g h e s t-t e c h n o l o g y
industrial expansion that p ro v i d e s the m arkets for
implements offered in
industri al produc ers in the U . S . a n d E u rope is told b y the booklet.
the I M F , o n behalf of itself and t h e E urodol l a r lenders ,
that such develop ment is s i m p l y " not appropriate " to
the h igher requirem ents of debt s e r v i c i n g .
Therefore these barons of fina n c e h a v e funded and
built up an immense propaganda c a m pa i gn over the
past decade or so with the M a lth u s i a n the m e song of
" l i m its to growth . " In the interests of the i r austerity
p l a n s , the developing sector has b e e n to ld it must seek
o n l y "l a b o r-i n t e n s i v e" means of e c o n o m i c
develop ment, that i t must abandon a n y hope o f ever
achieving advanced-sector levels of technology and
what might be termed energy inten s i venes s . The

Oct. 1 0- 1 6. 1 978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 9

basic argum ent - that " fixed l imits to resourc e s "
determine that t h e developing nations can't develop
( and we can't expand world trade) - has been
supplem ented with the i m portation of the more
spiritua l " types of environm enta l i st antiscience into
the Third Worl d .
Appropriate technology's British g odfather
The godfather of this new spiritual awakening is a
(now thankfully deceased) British " economist" by the
name of E . F . Schumacher, whose book Small is
Bea u tiful is the bible of our environ m e ntalists at home
and the appropriate technology crowd worldwide.
Schumacher was no wi ld-eyed hippy. but a top-level
ins ider of British policymaking circles and the British
Colonial Office (now known a s the O verseas
" D evelop m ent" Mini stry . This O x ford grad began in
the 1 940s with the Fabian Society. through which he
involved him self with the p lanning for the creation of
the postwar internationa l monetary system . In his
written wartime com m entary on the I M F proposals of
Lord Keynes and the U . S . ' s Dexter White , he
criticized even the British proposal for not going far
enough in c reating a transnational agency that would
be outside the control of any soverei g n government.
His concerns were c entered on the u . S . He viewed
the Keynes proposal as a compro m i s e . what the u . S .
could be manipulated into agreei n g t o given that (as
he explicitly stated ) the U . S . would never agree to the
kind of grand raid on the u . S . Treasury that bankrupt
Britain wanted to carry out at the end of the war. But
S chumacher confidently predicted that within 25
years the system would collapse anyway. and then the
British could again get what they wanted - control
over the international monetary s y s te m .
Thi s gentlem a n ' s s u b s e q u ent c a reer carried
1. The Kissin gerian s pl an U.S. pol icy
In November 1 9 76 Henry K i s s inger, then Secretary of
State. called together some 800 business . labor. and
other private-sector leaders for a m eeting to plan the
u . S . role in developing the Third World, and to
prepare for the 1 9 79 UN " S c ience and Technology"
Conference. The gathering took place only months
after the Non-Aligned movement ' s h istoric Colombo
resolution calling for debt moratorium and high-tech­
nology development. which p rom i s e d the final defeat
of Kissinger' s Internationa l R esources Bank scheme
to mortgage all developing nation ' s economies for
debt repayment, unless the Colo m b o c urrent could be
stamped out.
Among those at Kissinger ' s meeting were a number
of his most loyal cothinkers : Sterling Wortman of the
Rockefeller Foundation. infamous for its disastrous
Green Revolution polic y ; Orville Freeman. president
10 T H I R D WO R L D E X ECUTIV E I N TE L L I G E N C E R EVIEW
through many agencies. including involvement in the
British occupation of Germany. but he dedicated the
last 15 years or more of his life to eradicating
Am erica ' s " edge" over Britain - namely science and
technology . The author of the term " intermediate
technology. " he was the founder of the " I ntermediate
Technologies Group " in England in the early 1 960s ,
which together with the International Development
S ervice, a Colonial Office institution based at Sussex
U n i versity. was the initiating force behind the
appropriate technologies crusad e .
I t s spread since h a s been w i d e a n d effective.
R e m ember the Whole Earth Ca talogue. that do-it­
yourself guide for the rock-drug counterculture which
would have us all building our own outhouses in the
spirit of " getting it on with nature " ?
I n this report we also feature a n extrem ely compe­
tent statement by the sc ientific authorities of the Fus­
ion E nergy Foundation on why appropriate technol­
ogy s i mply doesn't work . exc ept a s a m ethod of mass
m urder. We leave it to the men and women of the
A m erican business community and labor movem ent
to i m agine for a moment what their economic future
w i l l look like in an appropriate technology world.
The vast markets for American capital goods .
s c i e n c e , and technology that are potent i a l l y
represented by a massive effort at the .full-scale
development of the develop ing nations is virtua lly
unlim ited - and the EMS and the efforts assoc iated
w i th it p romise to provide the m onetary and credit
system to make that possible. What has been
appropriate for America's growth and develop ment ­
the highest level of science and technology known in
human history - is no less appropriate for the billions
in the develop ing nations of the worl d .
- Da niel Sneider
of Business International Corporation and. during his
tenure a'S Secretary of Agriculture in the Kennedy
Administration. responsible for shutting down U . S .
food exports to the underdeveloped sector ; G . William
Miller. the asset-stripper head of Textron. who has
since been installed a s the head of the Federal
R eserve ; James P . Grant. president of the Overseas
D evelop ment Counc i l . which purveys the Kissinger­
World Bank line among businessmen ; and Frank
Pace. J r . . president of International Ex ecutive
Service Corporation.
Pace led off the m eeting with a state m e nt of purpose
designed to make even " appropriate technology"
sound good . " It is important to establish goa ls . " he
said. " not for the purpose of interm ediate or appro­
priate technology in the developing countrie s . not for
the purpose of developing new high-level technology .
Oct. 1 0- 1 6 . 1 978
 Th e AT mafia : 'Bock to 3,500 BC'
While the environmentalists have not yet been able
to force windmiJIs. h um an dung for fertilizer. and
other Stone-Age naturalism s on any significant
portion of the population in the advanced sector, the
peoples of the Third World are seen as a m ore
tractable target. A sample of appropriate tech­
nologies at work is offered by a recent issue of the
m agazine Mazingira : The world for u m for environ­
ment and develop m ent (No. 5. 1978), which is
published " with the support of" the UN's Environ­
m ent Programm e. (The sam e UN environmental
um brella also shelters the Friends of the Earth and
other environmentalist-lapping-over-into-terrorist
operations. ) The m agazine's m asthead notes that
"Mazingira m eans environm ent in S wahili, " and
adds that it is printed on partly recycled paper.
"S ix developing countri e s a r e now in the proce s s
of testing and modifying a wind powered water
pump which has been developed b y the Inter­
mediate Technology G roup w i th financ ial support
from Christian Aid . . . .
"The prototype was develop ed with help and
hospitality from the Engineering D ep a rt m ent of
R eading University. U K .
"It i s specifica l l y intended for l o c a l p roduction i n
workshops of light engineering plants .
"The wind machine has a 6-m etre d i a m eter and
but to arrange for present technology to be adapted to
the needs and requirem ents of the s m a l l business and
s m a l l farmers . "
G. William M i l l e r . for his part. p roc laim ed that i t
was obvious ly impos s i b l e to raise the Third World to :
the s a m e standard of l i v i n g that exists in the
United States . . . I don ' t b e l i e v e that we have the
resource s in the world in t e r m s of human
managerial resourc e s or labor resourc e s . nor do
we have the material re sourc e s to a c c o m p l i sh thi s
in a short t i m e .
N o r would it necessarily be d e s i r a b l e to esta­
blish the American standard of living a s it now
exi s t s . in many ways wastefu l . i n m a n y ways
perhap s less rewarding than alternate cultural
opportunitie s . a s the norm for the wor l d . I don ' t
suppose that any of u s would p ropose. i n thinking
of the use of technology to c r e a t e development in
the world. that we try to c lo s e that gap instantl y .
Another im portant speaker at Kis s inger ' s meeting
was H . Guyford Stever of the National R esearch
Coun c i l . " Technology transfe r . unless carefully
grafted to loc a l values and conditions . m a y be
rejected . " he said . " Wh i l e technology is at the heart of
the development p roc e s s . a new and more mature
Oct . 1 0- 1 6. 1 978 EXECUTIVE INTELLIGENCE REVIEW
is capable of driving a variety of reciprocating
p i ston. diaphra g m . or inertia p u m p s . O utput varies
from 0.5 to 7 . 5 kW depend i n g on wind speed.
D i fferent rotor and pump options a l l o w it to be used
either for low l i fts with high volu m e o r high lifts
with low vol u m e . for irrigation and borehole
p u m ping respective l y . "
But even m ore "appropriate" is this plan for
"Reviving Babylon's bricks" in the starving
Sudan:
"An anc i ent brick-making proc e s s - first used i n
B a bylon in 3 . 500 BC - i s b e i n g r e v i ved i n the S udan
in an a ttempt to find a local c h e a p source of bricks .
In the Sudan. as in m a n y d e v e l o p i n g countri e s .
concrete blocks a r e exp e n s i v e a n d l o c a l sun-dried
bricks have low l i fe expecta n c y a n d encourage the
breeding of insects and fungi i n their porous
structure . Burnt bricks are of b e t t e r quality. but
are relatively exp e n s i ve and m a k e catastrophic
d e m a nd s on l i m i ted tim ber s u p p l i es .
Perhaps the m ost telJing statem ent of purpose in
the m agazine appears in a caption to a picture.
Belo w a photograph of an Oriental m an carrying a
heavy burden on a yoke is the com m ent :
"Age-old technology - p erha p s p a inful. c ertainly
a p p ropriate . "
attitude toward the a p p l i cation of technology has
e m erged . " Th i s more mature attitude. h e exp lained,
i n c luded the recognition that d e v e l o p m ent could no
longer be thought of in ter m s o f " th e reaching of a
s p ecific goa l at a specific t i m e . " and that the
" prevailing belief or hope for m a n y years that
developm ent such a s that a c h i e ve d in industrial i zed
nations could be transplanted to a n L D C " ( less
d e veloped country) was chi m er i c a l .
" Ag r i c u ltural self-suffi c i e n c y " through appropriate
technologies i s the best the Third World c a n hope for .
h e concluded. a n d c a l l ed on the p r ivate s e c tor and
international aid a genc i e s to p e r suade the Third
World to a c c ept thi s a s inaltera b l e fact.
-Cynthia Parsons
The Stever re port
Stever was chosen to prepare a report to help define
the official U. S. stance at th e United Nations
conference. His paper was issued in April 1978. Titled
"U. S. Science and Technology for Development: A
Contribution to the 1979 UN Conference, " it was put
together with the help of the Brookings Institution as
well as the National A cadem y of Sciences, which
THIRD WORLD 11
S te ver form erly hea ded. and declared itself in its
II
introduction to be a "policy-shaping report.
Here are excerpts :
The goals of development. • 'The experience of the
past quarter century has shown the limitations of
equating growth with development.... The scarcity
of petroleum. minerals. and usable resources. for
example. affects world agricultura1 and industrial
production and demands on the world's ability to
produce food. jobs. and services."
Agriculture. "Increased crop production to feed the
world's growing population can be achieved either by
expanding the land area cultivated or by increasing
average annual yields per hectare.The latter may be
accomplished by applying more labor per hectare. (in
the form of fertilizers. equipment. irrigation ditches.
etc.) improving the biological factors that affect crop
productivity. or making other technological
improvements.
"Problems abound in this area. The costs
bringing land into production continue to rise. and the
expense and environmental damage associated with
production inputs constrain their use. People are
beginning to question the wisdom of building ever
more irrigation dams and using ever greater amounts
of chemical fertilizers to grow crops ....
"Irrigation projects have frequently failed to meet
expectations because the delivery. distribution, and
drainage of water on farmers' fields are uneven.
wasteful, poorly timed. and conducive to waterlogging
and salinity."
Industry. "While there is no assurance of success,
there is little doubt that their prospects for industrial­
ization will be enhanced if developing nations evolve
indigenous capabilities in research and develop­
ment....(but) the determinants of industrial growth
in a developing economy including the role
technology as an input into industrialization are not
well understood."
(The report proposes: )
"-creation of an international foundation with a
multinational board and diverse international funding
to manage a program of grants and contracts to
existing research institutions around the world;
"-creation of a private international research
center. with financing support from governments and
private sources. governed by a distinguished multi­
national board of directors and shielded as much as
possible from political influences;
"-creation of a research center or expansion of
existing research capabilities within an existing inter­
national institution such as the World Bank."
Energy. "Unexploited energy resources exist in
every country - nonrenewable fossil fuels such as
petroleum. coal. natural gas and peat; nuclear and
geotherman resources; or renewable resources based
12 THI R D WO R L D E X E CUTIV E I N TE L LIG E N C E R EVIEW
directly or indirectly on the sun.... we recommend
that the United States indicate its intent to lend major
new support for public and private research and
development activities related to energy problems in
developing countries.... using renewable energy
sources , .. The work would have two objectives:
conservation through energy-efficient designs and
replacement of costly imports with indigenous energy
sources....
"Developing countries must continue to seek and
exploit their own reserves of fossil fuels. but the
greatest long-term prospects for increased energy
supplies lie in exploiting renewable resources.
Especially important are decentralized technologies'
which may provide energy to rural areas without the
need to develop far-flung electric power grids such as
those on which the United States has come to depend·
... Some promising technologies have been developed
and others are on the drawing boards based on solar
energy used directly (e.g.. heating. distillation, photo­
voltaic conversion) or indirectly (e.g .• wind. biomass'
l
of hydropower) ....
"(The U.S.) could help universities or private sector
institutions in developing countries to complement
policy analysis by government agencies. Much con­
structive review of U.S. policy is done outside the
government; organizations like the Brookings Insti­
tution. the American Enterprise Institute for Public
Policy Research. Resources for the Future. Inc....
The U.S. might explore potential contributions to
encouraging the development of such institutions in
developing countries."
Appropriate technologies. "The 1 9 7 9 Conference is
certain to address the question of whether sound
industrialization in the developing countries requires
the availability of special technology ... (because)
economic conditions in developing nations differ in a
number of respects from those of the industrialized
of nations. Typically. developing nations have rather
large proportions of general skilled craftsmen and
relatively fewer persons with highly specialized
technical skill ... (and) a low rate of capital
formation so that they are characteristically capital­
poor when compared with industrialized nations.
" 'Appropriate technology' as used in this chapter
II
means technology that is optimal for a particular
situation in a particular developing nation, given that
nation's economic and social conditions and goals.For
example. if a nation's overriding goal is to maximize
national income. the technologies used should be those
that are most efficient. given relative factor costs
within the nation. If. on the other hand. a nation's
goals stress creating jobs over maximizing national
income. more labor-intensive technologies might be
chosen. Indeed. for many nations this would imply
technologies that are capital-saving and-or labor-,
intensive compared to corresponding technologies
used by industrialized nations. It would also imply
technologies that are relatively easily learned by
Oct. 1 0- 1 6. 1 978
workers with no prior indus tria l training or
experience and technologies to produce goods that are
less specia lized , sim p ler to use, a n d m ore versatile
that similar products m a d e in the indus tria lized
nations . "
Negotiation on technology imports. " . . . The U . S .
should sponsor workshops t o d e v e lop ne gotiating
skil ls. S uch workshops are c u rrently offered at
G eorgetown University and Harvard U niversity, for
exa m p l e . The UN also sponsors s u c h p rogra m s . . . I t
might be desirable to h o l d s o m e of t h e s e workshops
directly under the auspices o f a n international
organization such as the World Bank or UN a g e n c y .
. . . Technolog y transfers m a y have negative impacts
on the United S tates a s a whole or on c ertain
geographica l regions , econo mical s e c tors and incom e
groups."
Health. "We propose that the U nited S tates encour­
age expanded international support for efforts to
2. Why appropr i ate tec h no l ogy can't work
One of the most authoritative voices against environ­
mentalism in general and appropriate technology in
particular is that of the Fusion Energy Foundation, a
nonprofit organization devoted to the encouragement
of the most advanced technologies. The August 1978
issue of the Foundation's journal, F u sion, carried a
statement on appropriate technology and its antidote,
titled "World Development Requires the Most
Advanced Technologies," portions of which we
excerpt here:
The p rimary goal of develop m ent is to increase the
standard of living and educ ational level of the popula­
tion. The only possible way of in creasing per capita
consumption is to incre a s e per c apita p roduction -
the p roductivity of labor . In turn , the produc tivity of
labor can be inc reased only by the app lication of new
technologies that substitute inanimate energy and
machinery for human labor . B y increasing produc­
tivity , such new technology inc reases the standard of
living direc t l y . At the same tim e , b y reducing the tim e
the society as a whole m u s t work to m aintain the
current level of consumption and the existing m eans
of production. increased productivity generates a
surplus that is a vailable for expanding the econo m y a s
a whol e . T h e com bination of i n c r e a s e d consumption
levels and increased leis ure tim e a vailable for educa­
tion makes possible the p roduction of a more highly
skilled workforc e , whic h , in turn, allows the
implem entation of still more productive technologie s ,
continuing the cycle o f growth and d e v e lopment. Such
is the proc ess by which the most d e v e loped economies
Oct. 10-16, 1978 EXECUTIVE INTELLIGENCE REVIEW
d e monstrate effective appro a c h e s to p ro v i ding these
s e r vices wide l y and at low cost . . . would emphasize
p reventative servic e s (in c luding n utritio n , fa m i ly
p l a nnin g , and environmental s anitatio n ) , relatively
simple technology, and extensive use of com m un ity
hea lth workers and other p a r a p rofessiona l s , along
with intensified training for p h y sicians in delivery of
p ri m a r y health servic e s . M a n y s m a ll - s c a l e p rogram s
a long these lines h a v e worked w e l l , but with such
notable exceptions a s thos e in the People ' s Republic of
China and C u b a , few have b e e n e ffec tive on a large
scale.
" Given t h e nature of t h e n e e d s in the fields of health,
n u t ri ti o n , a n d p o p u l a tio n , t h e initi a ti v e s
reco m m ended are somewhat m o r e conc erned with
' s o f t t e c h no l o g y ' <methods of m a n a g e m e nt,
organizatio n , educatio n , info r m a tion , research, and
evaluation ) than with equip m en t . W e suggest the need
to develop new technologie s , but, in genera l , we are
more concerned with adapting and transferring
existing technologies . . . . "
in the advanc ed and the d e veloping sectors actual ly
a c hieved their current s uc c e s s .
From this desc ription of the g o a l s a nd methods of
develop ment, it follows that the c riterion for develop­
m e nt strategy is the maximiz a tion of the rate of
develop m ent. Our aim must b e to m axi mize the rate of
increase of labor power or productivit y , and thus the
rate of increase of the overa ll socia l s u r p l u s .
F rom these very e l e m entary considerations it can
b e seen that the strategy of a p p ropriate technologies
is not one that encourages develop m en t . The very
b a sis of this approach is to m axim i z e the labor
intensiveness of the technologie s e m p loyed in the
developing countries; in other word s , to minim ize
l abor productivit y . B y attacking the v e r y m otiv e force
of developm ent - inc reases in labor p roducti vity -
S uc h a strategy necessarily p reserves existing
backwardness . . . .
The failure of appropriate technology
What, in fac t , will b e the c o n s e q u e!lces of widespread
i m p l e m entation of a policy of labor-intensive develop­
m e nt? What is proposed is the m ere extens ion of the
p r e s ent low levels of p roductivity to a wider p ropor­
tion of the existin g population- a n increase in the
intensiveness of labor by the popula tion as a whole . At
the very best such a p roc e s s c a n result in only very
modest inc rea s e s in production in p roportion to the
add itional labor e m p loyed , inc r e a s e s barely suffic i ent
to cover the increased con s u m p tion necessitated by
productive outp ut. No added s u r p l u s is generated , and
thus no basis for continued growth p roduc ed. In fact,
THIRD WORLD 13
the real s ituation is considerably worse . since any
fixed level of technology tends to exhaust the
resources available to it. For example. existing
supplies of low-technology fuel s such as firewood are
already nearing exhaustion. S uch l i m itations rapidly
force upwards the cost of a fixed technology. leading
to increasingly rapid declines in overall productivity
and. therefore. in the standard of living. We conc lude
that even very modest " basic need s " c annot be met by
the use of low-productivity technology for any length
of t i m e . Furthermore . the exten s ion of labor time at
current wholly inadequate levels of productivity and
consumption must lead to the actual destruction of
present labor power on a large s c a l e .
How. then. c a n s u c h a policy appear t o b e
economical in terms o f t h e l o w cost of labor? It i s c lear
that this argument i s prem ised on the preservation of
the very conditions of m isery that development aims
to alleviate . Only if the cost of labor i s calculated at
the present grossly depressed wage levels can labor­
intensive methods compete with m ore productive.
cap ital-intens ive one s . But prec isely these grossly
depressed levels are the princ ipal hindrance to
development. By the accurate measure of the
resulting growth rate. capital-intensive m ethods are
far more economically effective than labor-intensive
one s .
I n other words . appropriate technologies are only
appropriate to the existing level of backwardness ;
they are wholly inappropriate to the task of develop­
ment. . . .
Capital-i ntensive development
Capital-intensive develop m ent i s premised today on
two interrelated polic ies. F irst. to provide the energy
supplies necessary to sustain development. we must
accelerate the implementation of existing nuclear
energy technologies and put the develop m ent of the
breeder and of thermonuclear fusion on a priority
bas i s . S econd. in the develop i n g s ector region wide
c enters of industrial development must be created to
act as the focus for high-technology industrialization.
It is clear that without the development of nuclear
energy. insufficient resources exist to power capital­
intensive development for any length of time.
However. existing fission technologies can sufficie n tly
expand and supplement energy supplies to ensure
adequate energy growth for the next decade and a
half. By the end of that period . liquid m etal breeders
and fission-fus ion h y brid reactors m ust be on-line . and
controlled thermonuclear fusion reactors could begin
to be i ntroduced. assuring a virtu a l l y unlim ited supply
of cheap energy for the future. An i nternational
p rogram to develop fusion power within the next
decade. a technically feasible obj ective. therefore . is a
necessary aspect of any sound developm ent strategy .
In the developing sector itself. cap ital-intensive
14 T H I R D WO R L D EXECUTIVE I NTELLIGENCE REVIEW
i ndustry must be introduced by a concentric-circles
process that upgrades the entire workforce . The core
of such a process will be regional industrial c enters .
using combinations of nuc lear and fossil fuel and
hydroelectric energy to drive advanced-technology
heavy i ndustry (for exampl e . primary processing
industries) . These centers will utilize the available
skilled workforces in parts of the developing sector.
S urrounding these centers will b e secondary centers
of light industry. more c losely l inked to rural areas
(such as food process ing) . Around these secondary
urban hubs . in turn . must be regions of advanced
agricultural development.
In thi s m anner. a relatively low-skilled population
can be progressively drawn into industries requiring a
higher and higher level of skill. While each industry
m aintains the highest possible level of productivity
and capital intensivenes s . the combination of
industries of relatively lower and higher skill levels
provides the basis for a continuous upgrading of the
total population.
The combination of nuclear energy development
and regional industrialization can provide the basis
for rapid rates of develop m ent in the developing
sector. as sim i lar policies led to the industrialization
of the advanced sector. It should b e noted that such a
policy is ideally and uniquely suited to reenergize the
c urrently depressed industries of the advanced sector
( s uch as steel) and to generally achieve a high rate of
exports from thi s sector to the lesser developed
countries .
Appropriate fi nanc ing
Capital-intensive develop ment i s not only technically
practical but also financ ially practical. The obj ection
that large-scale importation of capital i s impossible is
based on the assumption of the current high-interest.
short-term financing. Since cap ital-intensive develop­
ment. although relatively rap id. begins to pay for
itself only over a period of 15 to 2 0 years . such short­
term financing precludes large-scale capital import s .
I f s u c h financing is assumed. then indeed o n l y tech­
nologies involving few imports - in other words .
labor-intensive - a r e poss ible.
In fact. this is the real reasoning behind the appro­
priate technologies strategy - such technologies are
those appropriate to existing financing schemes !
Indeed . it was only in the early 1 97 0 s . when interest
rates on loans to lesser developed countries rose
rapidly and paym ent terms shortened. that the idea of
appropriate technolog i e s r e c e i ved w i d e s p read
attention . However. if the primary aim is rapid
de velopment. then it is n e c e s sary to c reate
appropria te financing - the provis ion of very long­
term. very low-interest loans and credit arrange­
m ents that are suitable to capital-intensive develop­
ment.
Oc t . 1 0-= 1 6 . 1 978
3 . The g e noc i dal resu l ts in Bang e l d esh
Victi m s of the severe floo d s that struc k Bangladesh in
late 1 9 74 have unwillingly b e c o m e human guinea p i g s
f o r one of the largest- s c a l e a n d c r u e l e s t exper i m ents
i n labor- intensive " ap p ropriate t e c h nologies . "
I n i t i a l l y , i m poverished B a n g l a d e s h attempted to
cope with the flood r e l i e f chore by setting up 6 , 00 0
gruel kitchens throughout the c o u n t r y , to h e l p w i t h the
d a i l y fee d i n g of s o m e 4 . 5 m i l l i o n p eople who were
hom eless or had had their c ro p s d estroyed . B ut 1 9 74
was a year of i nternational a u s t e r i t y , a n d Bangladesh,
one of the poorest of the developing s e c tor countr ie s ,
was soon u n a b l e t o f i n d the for e i g n e x c h a nge t o sustain
even this m i s erable level of r e l i e f .
Bangladesh t u r n e d f o r h e l p with its food prob l e m s t o
a U n i t e d Nations operation s p a w n e d o u t of the
K i s s ingerian 1 9 73 World Food Conferen c e , c alled the
Worl d Food Progra m m e .
The World Food Progra m m e ' s solution : a m a s s ive
" Food-for-Work " progra m . A c c o r d i n g l y , the relief
progra m s were c o n d e m n e d a s d e m ea n i n g , a n d , i n the
words of a B e n g a l i govern m ent report, " the gruel
kitchens were, there fore , c lo s e d d o w n , alms and doles
in all for m s were d i s couraged a n d Food-for-Work
progra m m e was i n i t iated ( s i c ) , b r i n g i n g rad i c a l
change i n t h e scope of relief . "
Under the conditions o f the progra m , which i s now
a d m i n i stered j o i n t l y by B a n g l a d e s h , the World Food
Progra m m e , and CARE on behalf of U . S . A I D ,
Be nga l i s earn a p p rox i m ately 6 p o u n d s of wheat for
excavating over a ton of earth - b y hand . Noting that
one of the goa ls of the progra m i s " to check inflation , "
the govern ment boasts that " one o f the maj or factors
in the s u c c e s s of Food-for-Work Progra m m e in
Bangladesh " has b e e n " pa y i n g food wage at less than
half the rate of nor m a l wag e . "
I f the govern m e nt o r o n e o f the agencies
part i c ipating i n running the progra m has m a d e
stud i e s of t h e nutrition l e v e l s or l i v i n g standards o f
workers i n t h e p rogra m , the r e s u l t s are a c l o s e l y
guarded s e c ret. But t h e a v e r a g e c a lo r i c i n t a k e f o r all
Benga l i s is a lready down to 1 7 00-2000 c a lories per d a y
- half w h a t an a c t i v e l a b o r e r n e e d s and w e l l below
acc epta b l e m i n i m u m nutritional l e v e l s .
Proj ects c a rried out under the program c enter
a r o u n d roa d - b u i l d i n g , construction of flood
e m b a n k m ents , a n d r e b u i ld i n g of c a n a l s . A l l work i s
c a r r i e d o u t b y m a s s c oo l i e labor u s i n g t h e m o s t
m i n i m a l e q u i p m ent : p r i m i t i v e h o e s f o r d i g g i n g a n d
w i c k e r b a s k e t s for earth- m o v i n g . F r o m J anuary t o
O c t . 1 0 - 1 6 . 1 978 EXECUTIVE I N T E L L IG E N CE R E V I E W
J u n e 1 9 7 5 , a c c o r d i n g to the g o v e r n m e n t , an
unspec i fi e d number o f Benga l i s w e r e paid 3 1 , 000 tons
o f wheat for 1 1 . 43 m i l l io n m a n - d a y s o f work to repair
871 m i les of embankm ent, 1 , 09 1 m i l e s of c a na l s , and
2 , 3 7 6 m i l e s of roa d .
F r o m January t o J u n e 1 9 7 6 , m an - d a y s spent i n
work-for-food proj ects w e r e i n c r e a s e d to 7 5 . 2 7 m i ll i o n ,
i n vo l v i n g efforts b y 2 m i l l ion workers o n 2 1 64 . 1 5 m i les
o f flood e m bankment s , 2 1 66 . 43 m i l e s o f c a n a l s , and 900
m i les of roa d s . For 1 9 7 7 , the g o v e r n m ent proj ected a
furth e r increase to " 3 m i l l i o n j ob opportuni t i e s "
involving 9 4 . 5 2 m a n - d a y s of work .
W o m e n have also been i m p re s s e d into the progra m .
States a 1 9 76 government report : " In Bangladesh
w o m en do not traditiona l l y work outdoor s . But the
practice i s fast changing both due to social
d e v e lop m ent and econo m i c c o m p u l s ions . I n April­
May, 1 9 7 5 , up to 30 percent of l a bo u r force i n some
F ood-for-Work proj ects in B a n g l a d e s h were w o m e n .
S c h e m e s h a v e b e e n w o r k e d o u t for g r e a t e r
opportun ities f o r women to p a r t i c i p ate i n food-for­
work during 1 9 76 - 7 7 seaso n . B e s i d e s , Day Care
C entres would b e set up at d i fferent p roj ects to take
care of the chi ldren while their m others work i n the
field . "
One of the m ore g r i s l y a s p e c t s o f the p rogram i s that
" fa m i l y planning stal l s " set up on the work-for-food
s i t e s are used to perform s u r g i c a l steril ization
procedures on the Bengali workers .
A l l thi s , s a y s the govern m e n t , " ha s i n s t illed a sense
of p r i d e and dignity o f l a b o u r a m on g the poor who
would oth e r w i s e have to depend o n charity. They now
w e l c o m e the opportunity to work hard for a living -
a n d hard work it is indeed - e x c a vation of 70 eft . of
e arth which w e i ghts over a ton - for only 2.8 kg. of
wheat . "
More c a n d i d l y , L e w i s S i m o n s r e ported i n a March
2 9 , 1 9 7 6 arti c l e i n the Washington Post : " As always i n
p roj ects of this m a g n i t u d e , the o v e r a l l figures a r e far
more i mp r e s s i ve than the b e n e f i t s to individua l s .
E ven a s t h e d i g g i n g g o e s o n , w o r k e r s c o m p la i n a bout
b e i n g cheated o f their full rations , o f poor quality food
and other inequitie s . "
But m o s t d i s a strous for B a n g l a d e s h , " Food-for­
Work " and s i m i l a r progra m s are destroying the
potent i a l for the country to i n d u s t r i a l i z e , and break
the cycle of poverty and labor i n t e n s i v e technology
which led to the flood and fa m i n e d i s a ster in the first
place.
T H I R D WO R L D 15
4 . Kiss i n g e r a n d th e Bra n dt Co m m i ss i o n
The Brandt Commission 's role a s the enforcer of for transfer of technology from the advanced sector to
Henry Kissinger's "develop m en t policies " is well the developing sector - the basis for new North-South
kno wn in the Third World. We reprint here portions of cooperation to replace the looting relationships of the
profile of the Commission published by the influential past. Henry Kissinger was and is dead set against the
Indian weekly New Wave. The article, by Leela establishment of a new international economic order.
Narayan, appeared in New Wave 's S ept. 1 7, 1 9 78 issue.
'Talking to death'
Under flimsy cover of a so-called Independent Kissinger's game. as the New York Tim es admitted in
Commission on International Development Issues, an unusual love for truth in June 1 9 7 7 . was to " talk
World Bank President McNamara and S ocial them to death." The Brandt Commission now intends
Democrat Willy Brandt of West G ermany are working to talk the Third World into the grave. The spade­
hard to find the " final solution " to the debt and work Kissinger did is being expanded in two re­
development crises facing the developing nations this spects.Kissinger combined a strategy of dividing the
decade. Brandt wanted to finish the job Henry developing nations into groups of " radicals. "
Kissinger began in the earlier phase of the "North­ " moderates. " and "conservatives " as a prelude to
S outh " dialogue between the developed and manipulating them and to formalising these synthetic
developing nations. The job is to force the third world divisions with proposals for " case-by-case" treatment
to accept " case-by-case " deindustrialization and the of the issues that were then and are now at the centre
imposition of World Bank-International Monetary of the North-South controversy: trade. raw materials
Fund fascist dictatorship over both the advanced and and the massive accumulation of debt by developing
developing nations. nations to the World Bank and the private Eurodollar
The Brandt Commission. as it is known. was banks of London and New Y ork.
ostensibly constituted to promote a revived " North­ Kissinger's genocide plan was embodied in two
S outh" dialogue. It is touted as a group of "well proposals - the formation of an International
meaning independent" individuals who wish to bridge Resources Bank (IRB) and the so-called Common
the gap between the demands of the Third World for a Fund for Commodities. The IR B was an unabashed
new international economic order and the position of proposal for multinational looting of Third World raw
the advanced capitalist countries. materials. designed to ensure repayment of the huge
Brandt, operating from Commission headquarters debt. It linked World Bank development funds and
at Gymnich Castle in Geneva. and Kissinger. working International Monetary Fund credits for rapid
from the offices of Aspen Institute in the U.S .. close­ development of Third World nations' resources in
ly coordinate the Commission's operations. The primary metals and commodities. The Common Fund
Commission members. who include Katherine was a "Third World " version of the Kissinger­
Graham. publisher of the Washington Post. Peter sponsored IRB scheme. sanitized through the United
Peterson of Wall Street's Kuhn L oeb banking house. Nations Conference on Trade and Development
Edward Heath of the British Conservative Party. and (UNCTAD) after loudly proclaiming it as a grand
a hand-picked group of Third World leaders. have cartel of Third World producer nations to get pro­
been deployed to divide developing nations and thus tected prices for their commodities. While the Third
scuttle their just demands. Weakening the popular World was left to haggle over which raw materials
base of those Third World leaders as are committed to would take it onto the Common Fund list. the World
ihdustrial and technological development figures high Bank and Kissinger shoved their anti-industrial debt
on the priority of their tasks. Brandt and Kissinger. collecting policies through an open door . . ..
who once trained their gun on India's Indira Gandhi. Kissinger's evil influence over the policy-making for
Pakistan's Zulfikar Ali Bhutto. Guyana's Fred Wills the Third World is clear again here. Each one of the
and others. are determined in converting the Third formulas propagated through newspapers as a basis
World into so many replicas of Chile. for North-South relations bears the imprint of his IR B
The proposal for the formation of the Brandt scheme. Calls for a "basic-needs " or "minimum­
Commission. mooted by R obert McNamara. coincided needs " approach to Third World development are
with the collapse of the North-South dialogue in Paris. thinly disguised proposals for genocidal cuts in
and the failure of the Conference on International essential imports to the developing sector. In
E conomic Cooperation (CIE C) . in the spring of 1 977 to Kissinger's scheme, the advanced sector would
reach an agreement on any substantial issue. As maintain "orderly growth " whicle supplying the
France's late President Pompidou and Mexico's developing sector's "basic needs. " This is a
former President Luis Echeverria had conceived it. euphemism for the de-industrialisation and dec api­
the Paris dialogue was to be a forum to finalise plans talisation of Japan, the US and Western E u rope . . . .

16 TH I R D WO R L D E X E C U T I V E I N TE L LIG E N C E R E V I E W O c t . 1 0-1 6 . 1 978

' Sudpolitik' expanding world trade in a d e v e loping econom y . To
Based on this understandin g of the Third World. the s e l l this fraud, Yugoslav c o m m odities expert at the
Com mis sion ' s blueprint. due to b e released next World Bank , Drago s l a v Avra m o vic , h a s j oined the
m onth . can be expected to s trid e n t l y sell the following Com mis sion .
lines to the developing sector . An anti-technology pro-disarma ment stance. This
The World Bank's version of the interdependence of attempt is to be heavily foc u s s e d with the UN special
the North and the South. Ac cording to Brandt him self. s e s sion on disarm a m ent held in N e w York in May.
who unasha m e d l y uses s t ra i g h t World Bank Inform e d sources indicate that there is considerable
terminology, this means " fu l filling the basic needs of p r e s s ure on key deve loping countrie s . such a s India
all Third World countrie s , within the fra m e work of and Cuba, to take a " mora l " p osition on disarmam ent
orderly growth in both developing and industrialised by reducing their conventional a r m s.
countries . . . after Ostpolitik now Sudpolitik. " The Alternate energy development. T h e Brandt
"basic needs " formula is mouthed by many Third C o m mis sion wil l try to s c uttle nuclear energy
World social democrats in t e r m s of " appropriate develop m ent p rogra m m e in favour of solar energy,
technologie s " and " orderly growth " in the developed the firs t tied to a growing world e conomy , and the
nations . This is a frontal atta c k on all advanced latter to the backward energy n e e d s of village
natio n s . such a s Japan, which a r e oriented towards economie s .

Appropriate tech nology at work A s u rvey of seven villages

Do m i n ican
TAS K Republ i c Et h io p i a M ic ronesia N epal N i ger

Planting hand hand hand hand hand

e l ect r i c occas i o n a l l y hand

I rrig a t i n g pump b y g rav i t y none none (with scoops)

H a rvest i n g hand hand hand hand hand

c o p ra i n s u n ;
Preserving none s u n d ry f i s h s a l t ed o r s u n d ry s u n d ry
s m o ke d ;
bread f r u i t b u r i ed

town p i pes, wel l , ru n- o f f , s t ream

D ri n k i n g water water t r u c k s st ream wel l w i t h nearby we l l
bu cket o r p u m p

e l ect r i c , m a i n l y kero s e n e , kerose n e , p itch p i ne,

lighting kero s e n e l a m p st raw f l as h l i g h t ra re l y k e ros e n e keros e n e

cart , o x women , h a n d , boat , ha n d ,

H au l i ng t ract o r animals h a n d- c a rt p o rt e rs a n i ma l s

m a n u re ,
c o m post ;
Fert i l izing N .A.* none N.A. * c h e m i ca l none
b y ha n d

• N o t ava i l a b l e S o u r c e : Overseas Development Cou n c i l

O c t . 1 0- 1 6 . 1 978 EX ECUTIVE INTELLIGENCE R E V I E W THIRD WORLD 17

5 . From the u . s . d e bate on d evel opm en t
That the appropriate technologies strategy is
murderous for the developing sector and economically
(and otherwise) suicidal for the industrial nations i s
recognized by many in A m erica ' s government . even
b y some long-ti me " develop m ent b u rea ucrats " in the
S tate Department. A I D . a n d other agenc ies .
Therefore much of the organizing effort around the
UN conference in particular and appropriate tech­
nologies in general has been devoted to pushing aside
any opposition forc es. or even those who may not go
for these policies quickly enough .
A m i lestone in the c a m p a i gn to m ake the
A d m i nistration safe for appropriate technology was
the Novem ber 1 9 77 " Interim R eport on U . S . Develop­
m ent Assistance Strategies " i s s ued by the B roo kings
Institution . Author Lester Gordon. of the Harvard
In stitute for International D evelop ment. spelled out
two primary goals :
First. all develop m ent policy should b e removed
from the hands of the State Department. the Congress.
and any other bodies that m i ght fail to be
appropriately tough on the Third Worl d . and put into
the hands of a new D evelop ment Cooperation Agenc y .
responsible only to the President. Gordon explained in
congressional testimony that " there i s a tension in
A m erican aid agencies which goes back many years .
between officials comm itted to quick results . and
those concerned about our lack of knowledge for
achieving such results . " Taking development policy
out of the hands of the former is necessary to open the
field to innovative strategies e m phas izing " quality of
life . " not technology and econo m i c growth .
Second. development aid is to go only to the poorest
countries . The " R LD C s " - relati vely less developed
countries - that m ight be within shouting distance of
real develop m ent are to be left to existing institutions
like the World Bank. Brookings advises . Moreover .
the aid to the trul y poor nations must be kept small
( " rationed . " in Gordon ' s phrase) . because " if it
becomes substantial . it is likely to discourage the kind
of economic policies which would enable it to survive
on its own . "
A cou nterproposal from ind ustrial ists
In contrast t o both S tate Department muddling and
" appropriate technologi es" superagency proposals.

From proposal to policy :
the Humphrey bill
The principles laid out in the Stever
and Brookings reports were given
legislative form by one of the
giants of British-brand . 'social
consciousness " in the U. S. . Hubert
Humphrey. and introduced after
his death as the International
Development Assistance A ct of
1978 by Senators Sparkm an and
Case in January. Now part of the
foreign aid bill. it is a waiting
Carter's signature, and he is
expected to sign it this m onth.
However, the provisions calling for
an organization bypass of the State
Departm ent were not passed ;
hence Carter's m ove to accomplish
this wi t h o u t C o n g r e s s b y
expanding AID head Gilligan 's
powers.
Here are excerpts from the text
of the bill as it was originally intro­
duced:
Sec. 102. Development Assistance
Policy. . . . . Provision of develop­
m ent resourc es must be adapted to
the needs and capabilities of
s p e c i fi c develop i n g c o u n t r i e s .
U nited States assi stance to
countries with l o w p e r capita
incomes which have l i m ited a c c e s s
to p r i vate external resourc e s
should prim arily be provided o n
concess ional ter m s . Assi stance to
other develop ing countries should
generally consist of progra m s
which fac i litate their access to
private capital markets , invest­
m ent, and technical skills . . . .
Bi lateral ass istance and United
S tates partic ipation in multi lateral
institutions shall emphasize
p rogra m s i n support o f countries
which pursue deve lop ment
strategies designed to m eet basic
human needs and achieve self­
sustaining growth with equit y . The
Congress declares that the
principal purpose o f United States
b i latera l deve lop ment assistance is
to help the poor majority of people
in develop ing countries to partici­
pate in a process of equitable
growth through productive work ,
and to influence decisions that
shape their lives . . .
Activities shall be emphasized
that effectively involve the poor in
development, by expanding their
access to the econom y through
services and institutions at the
local leve l , increasing t h e i r
partic ipation i n the making o f
decis ions that affect their l i v e s ,
increasing labor-inten s i v e
p roduction and the use of appro­
p r i a te t e c h n ol og y , e x p a n d i n g
p roductive investm ent a n d
services out from major cities to
s m a l l towns and rural area s , and
otherwise providing opportunities
for the poor to improve their lives
through their own efforts . . . .
Sec . 201 . Bilateral Development
Assistance . . . . Ass istance from the
U nited States shall be used in

18 T H I R D WO R L D E X E C U T I V E I N T E L L I G E N C E R E V I EW O c t . 1 0- 1 6 . 1 978
there is another plan on the ta b l e . The industrialist
faction in the U . S . is trying to s e cure governm e nt­
private cooperation for h igh-technology export s .
I l linois Democ rat S enator A d l a i S t evenson I I I and
Delaware R epublican Congres s m a n William Roth are
support ing the creation of a n e w c a b i net-level depart­
m ent to p romote high technology exports to b e called
something like the Department of Internationa l Trade
and Investm ent ( D IT I ) ' The new d e p a r t m ent would be
c o n s c i o u s l y modeled on J a p a n ' s M i n i s t r y of
International Trade and Ind u s t r y , M I T ! . Hearings
were held on this proposal s e v e r a l months ago, before
Stevenson ' s International F i n a n c e s u b c o m m ittee of
the S enate Banking C o m m ittee . O n l y last wee k , Roth
introduced legislation to set up a foundation to pro­
mote hi gh-technology export s , w h i le S tevenson pro­
m i sed to submit s i m i lar l e g i s lation to the S enate .
T h e Stevenson-Roth m o m entum directly attacks the
" appropriate technolo g y " m enta l i t y . As S tevenson
told the Chicago Daily Defender, S ep t . 1 2 , " That
concept - appropriate technology - is a very
d e m eaning one to the less developed countri es . "
Behind Stevenson-Roth and their congressional
allies lie the industrialists of the M i d w e st and mid­
Atlantic region s . Last year, a t a time when Treasury
S e c retary Blum enthal was p u s h i n g p rotectionism
against Japan and Europe and talking down the
dollar, the Chicago International Trade C l u b , a group
of p ro m inent i n d u s t r i a l i s t s , proposed a h i gh­
technology export drive. Their report pointed out that
th i s would not s i m p l y take a w a y exist i n g m a rkets
fro m . for exa m p l e , J a p a n , but expand world m a rkets
for exports . and would help s t a b i l i z e the dollar. In
respon s e , and with p rodding fro m trade Ambassador
R o b ert S traus s , the Admini stration set up an export
task force . But due to sabotage from the Treasury
D e p a rt m ent, the task force never a m ounted to very
m uc h .
T h e proposed " appropriate technology" super­
a g e n c y is. among other thin g s . an atte m p t to divert
the industria l i s t s ' effort for a c a b i net-level export
department. The latest stat e m ents and proposed
l e g i s lation of S tevenson and Roth indicates that the
industrialist fac tion has not fal l e n for the g a m b i t .
Brookings : no technolog y for the Thi rd World
I n d e e d . like most appropriate t e c h nology tracts. the
Brookings report is fairly d i r e c t i n expressing its
opposition to industry in general and U . S . industry
exports in p articular. I n h i s c o n g r e s s iona l testimony.
B rook ings ' s Gordon exp lained that the purpose of the
Brookings plan was to keep t e c h nology . a s it i s
genera l l y understood in the a d v a n c e d s e c t o r , o u t o f
the T h i r d World ' s hands . E v e n m a c h inery and equip­
m ent c a st-offs from the U . S. a r e too " technic a l " for
the R LD C s . let alone the L D C s , he s a i d . And anyway,

support of, rather than substitution
for , the s elf-help e fforts that are
essential for successful develop­
ment progra m s , and shall b e
conc entrated in those countries
that take positive steps to h e l p
the m s e l ves . . . .
United S tates develop m ent
a s s i stance should focus o n c r i t i c a l
p r o b l e m s i n t h o s e fun c t i o n a l
sectors which affect t h e lives o f the
maj ority of the people in the
d e v e l op i n g c o u n t r i e s : food
p roduction and nutrition ; rural
development and generation of
gainful e m p loyment : population
planning and hea lth ; environ m ent
and natural resourc es ; and
education, develop ment
a d m i n i strat ion, and human
resource develop ment. . . .
Sec. 205. Selected Develop ment
Programs. . . . Progra m s to h e l p
d e v e lop i n g countr i e s a l l e v i a t e
their energy problems by
increasing their production and
conservation of energy, through
such m eans as research a n d
d e ve lop m ent of s u i t a b l e energy
sources including relatively s m a l l
s c a l e , dec entra l i z e d r e n e w a b l e
energy sourc e s , conservation
m ethod s , collection a n d analysis o f
information concerning countri e s '
potential suppl ies o f a n d n e e d s for
energy, and pilot projects to t e s t
n e w or unconventional m ethods o f
prod u c t ion of conservation o f
energy, with d u e priority to b e
a ccorded t o earliest practicable
develop ment and use of energy
technologies which are environ­
m e n t a l l y a c c ep t a b l e , require
m in i m u m capital investment, are
most a c c eptable to and a ffordable
b y the peop l e using the m , are
simple and inexpensive to u s e a n d
m a intain . . .
Progra m s i n cooperation w i th
de veloping countries to prom o t e
the develop ment and d i s s e m i na ­
t i o n of intermediate a n d othe r tech-
nologies appropriate for d e velop­
ing c ountrie s .
Sec . 701 . Establishment : Principle
Officers. The Adm inistration s h a l l
be headed b y a n Adm inistrator
who sha l l be appointed b y the
President, by and with the a d v i c e
a n d c o n s e n t of the S enate . . .
Sec. 703. Administrative
Provisions . . . . S u b je c t t o the
provis ions o f this section , the
President. for a period of four
years a fter the date of e n a c t m ent
of this Act, may transfer to the
Adm inistration any func t i o n
( i n c luding powers , dutie s , a c t i v i ­
ties, faci l i t i e s , and parts of
functions ) or a n y other depart m e n t
or a g e n c y of t h e United S ta te s , or
o f a n y officer or organization a l
e n t i t y thereof. which relate
primarily t o the function s . p o w er s ,
a n d duties o f the Adm inistration a s
prescribed b y this Act . . . .

Oc t . 1 0 - 1 6 . 1 978 E X EC U T I V E I N T E L L I G E N C E R EV I E W T H I R D WO R L D 19
why indulge in capital investment when we need the
kinds of technologies that wi l l keep hundreds of poor
natives employed? In the L D C s " the E:ndowm ent of
la bor as compared to capital is more abundant . " he
explained :
so it really does not make m uch sense. in strict
economic efficiency term s . for these countries to
adopt highly capital-intensive activity when it has
so much cheap labor .
S ince a lot of our technology essentially is so
capital-intensive. so much of it i s i nappropriate
for these countries . . . The inappropriateness of a
lot of our technology shows up particularly on the
farm. where tractorization tends to lead to higher­
priced products and to a great deal of
unemployment.
But the report itself makes it a point to say that.
despite appearance s . it does not oppose economic
growth per se :
While growth has been reasonably well served
(in the Third World ! -e d . ) . b a s i c human needs
have not . It should now b e possible. without
sacrificing growth . to serve the needs of the poor
majority better than in the past . . . (There i s a )
tendency t o equate these n e w and legitimate
imperatives with an ' anti-growth ' policy. We
believe that econom ic growth remains the under­
lying means by which satisfaction of human needs
is made possible. S i mp l y put. the problem is how
large can and should assistance be for the direct
provision of social servic e s . W e believe that the
size should be l i mited by each country' s capacity
in the long run to generate the revenues needed to
sustain the m . That capacity will be largely the
result of the productive activities that are
initiated . . . we urge that priority be given to the
expansion of employment opportunities and the
redirection of health. education . and other social
program s away from a high technology. urban .
a n d elite orientation towards low-cost services to
the rural masses .
In his testimony. Gordon went on to explain that in
the case of a nation that insists on inappropriate
capital-intensive m ethods . or i s not sufficiently
comm i tted to the Brookings version of " growth with
equ,ity . " " we should lay bac k " - that i s . refuse funds
and assistance.
The report continue s :
Expansion of the kinds of education. health. and
other social program s now underway in the
developing countrie s i s likely to help the poor only
marginally. Health program s which emphasize
20 T H I R D WO R L D E X E C U T I V E I N T E L L I G E N C E R E V I EW
urban . high-technology curative services are
unlikely to help the masses of people in rural
area s . or even the poor in the c ities . whose
dom inant health problems are largely environ­
m ental in origin . . . .
S i m i larly. expansion of university education.
which i s typically free in poor countries. deserves
deemphasis in comparison with rural literacy or
out-of-school progra m s . The high-cost. urban­
centered. high-technology p rograms are what
i nternational assistance has tended to empha s ize
because that i s how Western technology i s more
easily transferred . The challenge i s to develop
low-cost delivery system s that will meet the needs
of substantially more peop l e with any given
amount of funds . . . .
It should also be rem e mbered that U . S . forei gn
aid strategy should reflect the fact that its
capacity to help is lim ited by factors within the
d e v e l o p i n g n a t i o n s th e m s e l v e s . E x p l i c i t
recognition o f thi s fact should mute excessive
expectations and ensure that highest priority in
allocating assistance funds goes to nations
following sound growth with equity polic ies .
The Brookings report reco m mends that the Agency
for International Development ( A I D ) be dissolved into
the new Development Cooperation Agency . a step that
would require congre ssional approval . In m id-May
President Carter went a good part of the way by
naming John Gilligan. the head of AID . a s chief
coordinator of all assi stance and related econom ic
policies supervised by federal departments ranging
from the State Department to the Office of S c ience and
Technology - a move requiring no congres s ional
okay. G i lligan will be Carter ' s leading advisor on
development affairs and the Administration ' s chief
development spokesman to Congress .
In his testimony. Gordon had stressed . however .
that a thorough c lean-out of the old-line developm ent
m en in AID and other agenc ies - those responsible for
the Nixon Admini stration ' s " R ogers plan" and other
relatively sane development initiatives in the past -
was necessary if Brookings ' s proposals were to come
into their own. The change to a D C A structure . he said.
has to be more than " p laying musical chairs . "
" Unless the change makes possible a substant ial
increase in flexibility for hiring and getting rid of
personnel. then I see not m uch point to i t . " Perhaps .
he suggested. real autono m y could be guaranteed by
making the DCA a "Department of Development"
with its own S ecretary .
Oct. 1 0- 1 6 , 1 978
Afte r Ca m p Dav i d , wa r ove r L e ba n o n ?
Th e grim fru its o f th e Carter Adm in istration 's fa ilure
The worst fighting in Lebanon s i n c e the 1 9 7 5 c i v i l war
has p lunged that country into tota l chaos . B a c ked b y
I s r a e l , Christian warlord C a m i l l e C h a m oun and h i s
r o v i n g bands of fa s c i st m i l i t i a m e n have triggered the
current c r i s i s , b y far the m o s t d a n g e rous in Lebanon ' s
belea guered hi story .
The deadly s ituation in L e b a non h a s arisen fro m the
d e l i b erate fa i lure of the C a m p D a v i d s u m m i t , and in
particular of the C a rter Ad m i n i stration , to push
through a formulation for a c o m p r e h e n s i v e settlem ent
of the Middle E a s t d i l e m m a . I n the a b s e n c e of such an
overa l l approac h , the Lebanon situation has r e m a ined
dangerous l y unresol ved, a cocked trigger for a n
I s rael-S yria confrontation t h a t threatens t o rapidly
e s c a late into a full-blown M i d d l e East w a r .
Henry K i s s inger, t h e architect of C a m p D a v i d a n d
t h e driving forc e behind t h e Carter A d m i n i s tration ' s
s u i c i d a l confrontation i s t cour s e , i s looking t o a war
over Lebanon to help stem the a c c e lerating motion
toward the consolidation of a new world monetary
system to replace the bankrupt International Mone­
tary F und . Moreover , a Leba non c onfrontation would
a l so thwart ongoing Arab d i p l o m a t i c effort s to unify
the Arab world against Camp D a v i d and iso late
E gyptian President S a d a t .
In obstructing Arab unity a n d the E uropean
Monetary S ystem , K i s s i nger and his cohorts hope to
maintain enough leverage in the M i d d l e East to
reshape the region into a n a n t i - S o v i e t , NATO-style
Middle E a st Treaty Organization that would poli­
tically ensure the continued econo m i c d o m i nation of
the region b y the IMF and allied financ ial institution s .
K i ss i nger' s strategy would a l s o c l e a r t h e w a y l U 1
" ba lkanizing " each country i nto feuding sectarian
camps to weaken various central governments and
thus m a intain top-down control over the region .
Horror in Lebanon
Chamoun and his I s r a e l i patrons a r e going for broke .
"We are determ i ned to continue the war unt i l the
w i thdra wal of the last S y r i a n soldier from our
territory , " ranted s e lf-avowed Nazi worshipper
Chamoun. " I f there i s no i ntervention from the
c i v i l ized world, chiefly the U . S . , the fighting w i l l go
on . "
A ccord ing to As Safir. a L e b a n o n d a i l y . Chamoun
and his henchmen are " tr y i n g to a c c e lerate the
O c t . 1 0 - 1 6 . 1 978 E X E C U T I V E I N T E L L I G E N C E R EV I E W
a n nounced Carter initiative ( for a " ne w charter" for
Lebanon. without Soviet a n d P a l e s t i n i a n p a rt i c ipation
- ed . ) through the greater d e t e rioration of the
s ituation . "
The c urrent Lebanon e x p l o s i o n was ignited b y
F a l a nge-Chamoun atte m p t s to p r e vent S yria from
c a rrying out c erta i n t a c t i c a l e v a c uations i n B e i rut
b u i l d i n g s . evacuations that, a c c o r d i n g to Cuba ' s
Prensa L atin a. would have " p revented a pretext for
n e w ( F alange) p rovoc ations . "
The Chamounists then l a u n c h e d w h a t they c a l led " a
f i g h t to the d e a th , " c a r r y i n g out " s u i c i d a l
Syrian l eader: Kissinger killed Faisal
I n 1 9 7 5 . S a u d i Ara b i a n K i n g F a i s a l was
a s s a s s i nated . A leading spoke s m a n for a n Ato m s
For P e a c e development approa c h to t h e M i d e a s t
c r i s i s , F a i s a l had c o n s i s t e n t l y t h w a r t e d then
U . S . S e c retary of S tate Henry K i s s i n g e r ' s plans
to separate E g ypt from the rest of the Arab
world and move towards the p artition of
Lebanon.
Now S yrian Defense M i n i ster M ustapha Tlass
h a s charged that K i n g F a i s a l ' s death was
c a rr i e d out under direct orders from Henry
Kissinger.
T h e n a s n o w , K i s s inger w a s the architect of a
s e p a rate E g ypt- Israel p e a c e a n d the d e struction
of the Palestinian population of L e b a n o n .
T h e following are e x c e r p t s f r o m a statem ent
T l a s s made before S yr i a n m i l i t a r y c a d ets , a s
reported b y the Portuguese d a i l y 0 Diario S ep t .
2 9 , 1 9 78 :
" Tlass a ffi rmed that the a s s a s s ination was
c arried out b y orders of e x - S tate S e c retary
of the U. S. Henry K i s s in g e r .
" A fter p ra i s ing t h e late m on a r c h f o r h i s
c o m p rehens ion of the S yr i a n nationa l i s t i c
position , ' Tlass t h e n turned to E gyptian
President Anwar Sadat a s ki n g : " ' D o you
want m e to remind you who k i l l e d h i m ? He
was k i l led b y the A m e r i c a n s ec ret services
under orders of h i s friend K i s s i nger . ' "
I N T E R N AT I O N A L 21
provocations " against S yrian peacekeeping forces
stationed in Lebanon .
The S yrian response, in the fac e of this onslaught,
was swift and overwhelming, reflecting a strategic
decis ion on the part of the S yrian governm ent to no
longer tolerate Chamounist Israeli provocations and
to elim inate the rightists' sourc es of political and
m i l itary power.
After only three days of intens e fighting, the S yrians
had dealt the Chamounists a heavy blow. The two
bridges linking East Beirut to the port of Junieh , the
source of supplies for the rightist force s , were taken
by the S yrian troops . The Christian stronghold of
Ashrafiyeh in East Beirut was bom barded by S yrian
shel l s , while the S yrian navy shelled Falangist­
Chamounist coastal position s .
Whi le the Kiss inger-allied p r e s s i s running com­
m entaries about " S yrian genoc ide against the
Christians , " Chamoun and his a l l i e s are responsible
for the murder of Lebanon ' s Christian population . The
Oct. 3 Wa shington Post quoted a Cha m ounist m i litia­
man, who had admitted to receiving two years of
m i litary training in Israe l . " I t ' s them <the S yrians) or
us , " he said. " We want the S yrians to try to come to
get u s , but they won ' t . They ' r e s cared they'll be
killed . "
This astonishing adm i s s ion that the Chamounists
want thousands murdered to further their own
feuda l ist-warlord a i m s was confir m ed by Chamoun
him self. Following an appeal to the Lebanese nation
by Lebanese President E lias S arkis to stop the
fighting and to cooperate with him i n putting together
a peace plan, Chamoun declared, " Th e only thing left
for Sarkis now is to resign . " All of Chamoun ' s actions
are tailored to force Sarkis ' s resignation, and to bring
about the " internationalization " of the situation
through Israel and-or U . S . intervention .
The insi stence o f the diehard Chamounists to wage
war has all but destroyed what still r e m a ined of Beirut
after the civil war. One-third of the capital c ity lies in
ruins, and thousands are dea d . Water, e lectricity, and
telephones are all cut off. Hospita l s , packed full with
the wounded and dying, are turning away patients .
The city, once the j e wel of the Middle East, is gone .
Arabs reject Cam p David
Spurring the Chamounists on i s the refusal of the
entire Arab world to buy the C a m p David deal worked
out at the summit last month . All hopes that Jordan or
Saudi Arabia wiJI get involved in the Camp David
" step-by-step " approach have been shattered . Despite
U . S . d iplomatic efforts through S e c retary of S tate
Cyrus Vance and his understudy A l fred Atherton to
convince them otherwise, both Jordan and Saudi
Arabia have made it clear that Camp David was and is
not the fra mework for a Middle East peace.
S i m ilarly , West Bank Palestinians have refused to
be wooed into supporting the C a m p David accord s .
Following a meeting in Jerus a le m , 1 00 leading West
Bank Palestinian mayors , c i v i l a d m ini strators , pro-
22 I N T E R N ATI O N A L EXECUTIVE I NTELLIGENCE REVIEW
fes s ionals , and intellectuals a n nounced " total
opposition" to the Camp David agreements, declaring
them to be in " blatant" contradiction with the will of
the world and the national rights of the Palestinians . "
None of the leaders will participate i n the local
governing councils that the Camp David accords call
for . The leaders reiterated that only the Palestine
Liberation Organization can be considered the legi­
ti mate representative of the Palestinian s .
Franco-Arab d i plomatic offensive
A double-pronged offensive led by France, Saudi
Arabia, and Iraq is c urrently underway to stabilize the
Lebanese powderkeg and at the s a m e time pull Sadat
and E gypt out of the Camp D avid quagm ire . This
coordinated F ranco-Arab strategy i s aim ing at the
nullification of the Camp David separate peace agree­
m ent between Egypt and Israel as the immediate
precondition for a resolution of the Lebanese cri s i s .
T h e manner in which the A r a b world h a s chosen to
resolve the Mideast crisis is based on a war-avoidance
perspective of economic develop m ent. This approach
is somewhat m irrored in the latest call from the Iraqi
government - a proposal which i s supported by Saudi
Arabia - to offer the E gyptian government a
whopping $5 biJIion yearly for a period of five year s , if
Sadat renounces Camp David . Calling for mas sive
E gyptian develop ment progra m s , Iraq and S audi
Arabia are presently organizing an Arab s u m m it
around such a develop ment outlook . So far Saudi
Arabia, Jordan, and Bahrain have officially s upported
the I raqi s u m m it initiative.
The transformation in Iraq ' s Mideast strategy is
key in this light. Shedding its ideological isolation,
Iraq is moving back into the Arab fold, and calling for
j oint action to unify Arab rank s . At a meeting of the
Arab Economic and Soc ial Counc i l , the Iraqi Trade
Mini ster along with Arab League head Mahmoud R iad
stressed the need for j oint Arab action in fighting
underdevelopment in the region. Linking the struggle
against backwardness to the Palestinian question, the
Trade Mini ster said, " E conom ists com batting back­
wardness in Mauritania and Sudan are fighting for the
liberation of the Palestinian people . "
Iraq i s also focusing o n mending fences with its
traditional enem y - S yria. At the above-mentioned
Arab Economic Council meeting, the Iraqi spokesman
declared that Israel has for too long fanned rivalries in
the Arab world as a lever of contro l . O n O ctober 4 , the
Iraqi News Agency ( INA) announced that Iraqi Presi­
dent Bakr sent a message to his S yrian counterpart,
Assad, praising his " positive stance on confronting the
com mon danger in Lebanon , " i . e . , Israel and the
F a lange .
In the last 48 hours the French government of
G i scard d ' E sta ing has moved dec isively to intervene
into the Lebanon bloodbath . Seen within the overall
context of a UN initiated peacemaking role , France ' s
initiative h a s received t h e support of UN Secretary
G eneral Kurt Waldhei m . The French plan, which calls
O c t . 1 0- 1 6 . 1 978
for an i m m ediate ceasefire a n d the expansion of the
S yrian-dom inated Arab D eterrent F o r c e w ith S a u d i
a n d S udanese troop s . a l s o p r o v i d e s f o r a m i xed
Christian-Mu s l i m Lebanese a r m y u n i t to a c t a s a
buffer between F a la n g i s t s a n d S yr i a n s in E a s t Beirut.
Already Radio Israel i s report i n g the French p l a n a s
t h e " F ranco-S a u d i " p ropo s a l . b e c a u s e of d ' E staing ' s
meeting with S audi Foreign M i n i s t e r P r i n c e S a u d i in
Paris on Oct. 4.
I n an interview on CBS on O c t o b e r 5. U . S . S e c retary
of S tate C yrus Vance warned that it w a s i n c r e a s i n g l y
d iffi c u l t to r e s t r a i n I s raeli i n t e r v e n t i o n i n t o Lebanon
and c a l led for a n i m m ed i at e i m p le m entation of the
French plan. I n addition. Vance c a l l e d for a n Arab
sum m it of the Arab m e m be r s o f the Arab Deterrent
Force ( U n ited Arab E m irate s . S ud a n . Saudi Arabia
and S yria ) to discuss the F re n c h strategy.
France criticizes Cam p David,
proposes its own plan
In an editorial published in Le F i garo Oct. 3. foreign
affairs analyst Paul-Marie de la Gorce places the
current events in Lebanon in the context of the
separate deal worked out at Camp David :
Let us take things as they now s t a n d . The fact is that
the S yrian army will not tolerate o n its rear flank the
existence of Maronite m i l i t ia s . whose leaders - no
one ignores - have been in contact w ith I s rael s i n c e
t h e c i v i l war b e g a n . . . . T h e y are p r e s s e d i n t o action
to the extent that President S a d at ' s policy has brought
about the near-disappeara n c e of the " southern front"
of the I s rael-Arab theater a n d that S yria r e m a i n s
a l m ost i solated on t h e " northern front . "
I t was thus predictable that they would want to put
an end to the existence of the M a ronite m i l i t i a s ,
s u spected of links with I s ra e l . This is what ' s
happening . . . . B u t what the p a t r i a r c h s - Maronite .
Greek Catho l i c . G reek O rthodox - fear is that the fate
of the Christian c o m m un i t i e s as a whole w i l l be linked
to that of the troops of C a m i l le C h a m oun and the
G e m a yel fa m i l y . . . .
Oc t . 1 0 - 1 6 . 1 9 78 EXECUTIVE I N T E L L I G E N C E R E V I EW
President Carter - perhaps m a d e over-confident by
his experience at C a m p David - thinks that a general
conference on Lebanon c o u l d s et t l e the affa i r . The
truth is that it could not. without t a k i n g into a c c ount
the context in which it t a k e s p la c e : either the
Lebanese w i l l agree together to o r g a n i z e coexistence
between their d i fferent c o m m u n i t i e s a n d with the
P a l e s t i n i a n s . who will i n e v i ta b l y stay on the i r
territory until t h e i r prob l e m h a s b e e n settled ; o r
L e b a n o n w i l l r e m a i n a c lo s e d c a m p of forc es
confronting each other i n the inter m in a b l e Israeli­
Arab confl i c t .
I n a n intervie w with French radio correspondents at
the United Nations Oct. 3, French Foreign Minister
L ouis de Guiringaud outlined his proposal for a cease­
fire a rrangement in Lebanon in the following terms:
On the b a s i s of the conve rsa t ions that I have had
w i th offi c i a l s ( from K u w a i t , L e b a n o n . S a ud i Arabi a .
S yr i a a n d others - e d . ) . I s u gg e s t e d last ni ght a
proc e s s to try to reach a c e a s e -fire in B e i rut. an
effe c t i v e and lasting c e a s e-fire . B e c a u s e . before
trying to deal w i th the problem o f L e b a n o n . we have to
stop the fight i n g . stop the m a s s a c r e . And this process
would be the followi ng : i t would c o n s i s t of a
redeploym ent of the Arab deterr e n c e for c e s in Beirut.
a n d the interpos i t ion between th i s A r a b for c e a n d the
Christian m i l it i a s of e l e m ents of the Lebanese army
m a d e up e q u a l l y b y C h r i s t i a n s a n d M u s l i m s i n the
hope that th i s would p e r m i t a n end to the fighting.
I have even proposed that the F re n c h A m ba s sador
i n Lebanon and some of his c o l l a bo r a tors take part. as
witne s s e s . in the talks between m i l i t a r y c o m m anders
i n order to guarantee that there be no future
d i s a greement over the interpreta t i o n of what would be
decided . . . . This ( p ropos a l ) w a s i m m ed i a t e l y
a c c epted b y t h e L e b a n e s e authoriti e s . . . . Before
b e i n g able to talk about a confere n c e which would
d i s c u s s the future of Lebanon ( P re s i d ent Carter ' s
p roposal for a conferen c e - e d . ) . w e m u s t first stop
the fight i n g . th i s i s what we are c o m m itted to for the
m o m ent . . . . What I am p rop o s i n g is a French
i n i t i a t i v e . which would not i n v o l v e U n ited Nations
intervention . . . .
I N T E R N ATI O N A L 23
u .s. b u s i n ess i o i n s Ad m i n i strat i on
i n D i sn ey l a n d
Cinderella ' s Castle provided a fitting backdrop to the
year' s most prestigious annual business conference,
the International Cham ber of C o m m erce, who
gathered last week at Disneyworld in Orlando,
Florida. Posing for photographers on the fourth-floor
balcony of the Castle of the Magic K ingdom , President
J i m m y Carter told the 2 ,500 business leaders
attending the conference that he had achieved peace
in our time.
The International Chamber of Com m erce meeting
was the largest of several major conferences over the
past week drawing business leaders into the fantasy­
world of the Carter Adm inistratio n . Before the ICC,
Henry Kissinger sprinkled " free enterprise" fairy­
dust, while Lehman Brothers-Kuhn Loeb chief
executive Peter Peterson proposed to throw out the
North-South dialogue in favor of a global Proposition
13 program . Many ICC partic ipants s p ent last week at
the International Monetary Fund annual event in
Washington , a mass debauch of dollar-dumping.
Since the capture of the Adm in i s tration by the pro­
British faction around Zbigniew Brzezinski , Walter
Mondale, and so forth , through the Camp David
fiasco, Carter has been straying farther away from
the path of a sane economic policy laid down for him
by President Giscard of France and Chancello r
Helmut Schmidt of West Germany at the Bon n
S u m m it last July, and deeper into the " fiscal
austerity" trap which London has carefully set for the
u . S . economy.
This week, two highly placed Administration
officials reported privately that the U n ited States will
oppose the E uropean Monetary F und . . . if it helps the
dollar ! The Administration hasn ' t taken an offic ial
stand on the EMF, said one offi c i a l , " but we would
have a major problem if it supported the dollar. We
are also concerned that the arrangem ents are
"
c: onsistent with doing a way with gold i n the world
economic system . . . There can b e no fixed rate s .
There m u s t not be an attempt to determine t h e rate of
the dollar. "
With this psychotic attitude, it should come as no
surprise that, despite Carter' s p l edges at the
D isneyworld ICC m eeting to defend the dollar
vigorously, this Pitst week, the U . S . c urrency went into
its worst tailspin in months this past week .
Back In the real world
Following the precise and unm istakable demands of
British officials at last week ' s IMF m eeting, the dollar
fel l to all-time record low levels against the West
German mark and the Japanes e y e n . The fact that the
24 I N T E R N ATIONAL EXECUTIVE I N T E L L I G E N C E R E V I E W
dollar collapse occurred despite central bank support
operations totaling several billion dollars in the first
days of October shows that the British scenario is in
operation : American banks and multinational cor­
porations are unloading dollars en masse, and British­
influenced Third World country c entral banks are
" d i versifyin g " their reserves out of U . S . dollars .
At the c lose Oct. 4, the dollar stood at barely 1 .90
West German marks , a 5 percent drop over the
previous two weeks . The dollar is down for the count .
Without drastic countermeasure s , that i s , a change in
Adm inistration policy or a E uropean assault against
the C ity of London, the dollar could be out, precisely as
the British have been demanding.
Carter ' s decision to veto the public works bill
because it funds allegedly " unnecessary" water
proj ects is an indication that he i s retreating further
into the magical belief that cutting government
spending will ipso fa cto cure i nflation . As Senate
Maj ority Leader Robert Byrd angrily noted Oct. 3, in
announc ing that he will organize a Senate override of
the President ' s veto , the public works bill funds
proj ects which enhance overall real economic growth .
A m erican business morality has deteriorated to the
point that a British banking delegation can appear in
the heartland of Am erican industry, Chicago, and
offic ially propose to wipe the dollar out as a reserve
c urrency. Speaking before an audience of Chicago
bankers at the Mid-America Club, a luncheon
sponsored by Continental Illinois Chairman Roger
Anderson, Bank of England official C . W . McMahon
gloated that the recent IMF meeting showed that the
dollar would have to follow the pound sterling down
the drain " sooner or later . " McMahon said, " A s an
official, I have to say later . But w e all know when
bankers get together and talk about sooner or later, it
m eans sooner. " The Chicago banks are wary , and
know exactly what the British are up to, but they see
the British calling the shots in Washington , and there­
fore are hedging their bets in that d irection .
If the IMF m eeting and various sideshows such as
the British banking tour in Chicago succeeded in
setting the dollar up for last week ' s butchery, Henry
K i s singer and his friends used the ICC event at
D isneyworld to portray the post-dollar future .
Harvard professor John Dunlop , the ex-Labor
S ecretary, told the gathering that the postwar era of
slow growth was finished, and at best. the world could
look forward to a long period of slow growth inter­
nationally.
The " s low growth " argument i s the rubric for the
austerity program that Britain and the International
Oc t . 1 0- 1 6 , 1 978
Monetary Fund openly d e m a n d for the U n ited S tate s .
Leh man Brothers-Kuhn L o e b c h i e f Peter Peterson
i nformed the ICC that the " strident rhetori c " of the
Third World had sabotaged the Third Wor l d . a n d .
consequent l y . t h e North- South d i a logue was f i n i s h e d .
(After t h e f u l l elaboration of W e s tern E urop e ' s Third
World deve lopm en t policy in the context of the E uro­
pean Monetary Fund. which i n c l u d e s the potential for
doubl i n g of American export s . the fact that a business
audience even perm itted Peterson to f i n i s h h i s speech
i s shoc king . )
Bluntly. Peterson was a s k i n g the U . S . business
com munity to abandon its b e s t c h a n c e s of avoiding a
dollar collap s e . the Third World ' s capacity to
profita bly absorb A m erican c a p i t a l goods export s , i n
fa vor of an international confrontation ! But t h e I C C
tolerated Peterson , b e c a u s e t h e U . S . delegation a t the
United Nations torpedoed a j oi n t E urop ean-Soviet­
Third World plan to r e - i n i t i a t e the North- South
d i alogue under UN a u s p i c e s . The order to l ik e w i s e
torpedo the rest of the world ' s agreem ent c a m e
d i r e c t l y from S e c retary of State Cyrus " P inoc c h i o "
Vanc e , w h o has been report e d l y " brown-no s i n g "
Brzezinski s i n c e the C a m p D a v i d s u m m i t .
Laza rd Frere s ' partner, I a n M a c G regor. picked up
the the m e of confrontation with the Third Worl d .
d e m a n d i n g t h a t t h e h a t e d W o r l d Bank a s s u m e
sovereign authority o v e r m u ltinational compani e s '
contracts w i t h Third World governm ents .
London cheers Carter debacle
The British press couldn ' t suppress d e l i ght over the
First National ' s A b boud Terms E M F " P rod ollar"
A n important indication tha t not all U. S.
businessmen and bankers have s wallowed the
line that the EMF is "antidollar " c ame this week
from Robert A bboud. chairman of the board of
the First National Bank of Chicago. In an
exclusive intervie w given to E x e c u t i v e
Intelligence R e v i e w while in Ne w York for the
A merican Productivity Center-Business Week
conference on "Inflation and Unemployment:
the Productivity Solution. " Mr. A bboud made
the following comments:
Q: What do you think of the European Monetary
Fund ?
A : I believe it w i l l work .
Q : Then you don 't think it is directed against the
doJlar ?
A : Absolutely not. On the contrar y . I think it w i l l
Oct . 1 0- 1 6 , 1 978 E X E C U T I V E I N TEL L I G E N C E REV IEW
h u m i l i ation of the A m e r i c a n A d m i n i s tration. Helmu t
S c h m idt. the London Financial Tim es noted O c t . 3 .
" dec i ded in t h e e n d n o t to attend t h i s week ' s conclave.
p rob a b l y because of p r e s s i n g b u s i n e s s a t home, but
pos s i b l y because he was concerned a t the potenti a l l y
adverse c o n s e q u e n c e s f o r b o t h h i s a e s thetic sense and
his p u b l i c i m a g e . After a l l , i t takes a man like J i m m y
C a rter, feeling on top of t h e w o r l d j us t now , not to
m i nd being s een i n the c o m p a n y o f M i c key Mouse and
Donald Duck. "
V i rtua l l y the s a m e anti d o l l a r speeches were
d e l i vered in New York a t a conference of the
A m erican Product i v i t y C e n t e r . G eneral Motors
C h a i r m a n Tho m a s Aqu i n a s M u r p h y stated. " G overn­
m ent spending m ust b e reduc e d . " echoing the current
view of the A d m i n istrati o n . w h i c h threatens to veto
a d d i t iona l funding for fa st breeder r e a c tor and fusion
power develop m ent. the greatest p o s s i b l e contri­
butions to A m erican produc t i v i t y !
A m b a s sador Robert Strauss spoke at length on the
P r e s i d e nt ' s Export Progra m . announced last week.
The p la n w i l l spend $500 m i l l i o n o v e r s e veral years
(against c urrent export volum e of $ 1 20 billion) a
program one senior Com m e r c e D ep a r t m ent staffer
d e s c r i bed as " like land i n g a s ingle d i v i s ion at
Nor m a n dy . "
S ince the U . S . ha s n ' t had a n y i n c r e a s e i n exports at
a l l , Walt D i sn e y ' s Mad Hatter w o u l d have s a i d , the
P r e s i dent ' s p rogra m must mean m ore, because there
could n ' t pos s i b l y be l e s s .
boost t h e dollar. I t h i n k the d o l l a r i s terr i b l y
underva lued . I guess I ' m o l d-fa s hioned . but I
b e l i e ve in a strong dollar. . . .
Q : How do you think the A dm inistration 's new
export enhancement program m easures up ?
A : We need a stronger export thrust . The
A d m i n i strat ion i s s t i l l too c o m m itted to
i d eo l o g i c a l c o n s i d e r a t i o n s : h u m a n r i gh t s .
e n v i ronmenta li s m . etc . F o r i n s ta n c e , the
Japanese are beginning to view the U . S . a s a n
unre l i a b l e trad ing p a r t n e r b e c a u s e of t h e
A d m i n i s t r a t i o n ' s n u c l e a r n o n p r o l i fe r a t i o n
p rogra m . We got t h e Japanese i n t o t h e nuc lear
energy field. and now w e won ' t even guarantee
them a sec ure supply of uran iu m . Because of
thi s . they ' r e being forc ed to look e l s e where , for
instance to the Soviet Union . for u r a n i u m . This
s ituation has got to be turned a ro u n d .
I N TER N A T I O N A L 25

Am e r i ca n prod ucti v i ty
co nfe re n ce : a ' Pro position 1 3
fo r prod ucti v i ty'
The hoary ghost o f Adam S m ith could b e heard
c lanking down the halls of the New York Hi lton
October 3-4 , as 400 busine s s m en gathered to hear
government and corporate leaders blame rising
inflation on declining productivity and urge a
nationwide Proposition 1 3-type m o v e m ent to boost
productivity by ending " governm ent interference in
the free market" and slashing governm ent spending.
The occasion was a conferen c e on " Inflation and
Unem ploym ent : The Productivity Solution , " co­
sponsored by the business-s upported American
Productivity Center and Busin ess Week magazine .
Featured speakers i n c l u d e d F e de r a l R e s erve
Chairman G . W. Miller ; Barry B o s worth, director of
the Council on Wage and P r i c e Stability ; Labor
S e c retary Ray Marshall ; form e r D eputy Secretary of
S tate and A m b a s sador to J a p a n , R obert Ingersoll ;
General Motors chairman Tho m a s Aquinas Murphy ;
Special Advisor to the President on I nflation, Robert
S trauss ; I . W. Abel, former p r e s ident of the United
S teelworkers Union ; and Robert Abboud, chairman of
the board of The F irst National B a nk of Chicago.
The conference is one in a series of s e m i nars and
lectures to which the U . S . b u s i n e s s c o m m unity has
been subj ected over the past few m onths a s part of an
effort by London-centered finan c i a l networks to
prevent U . S . parti cipation in the ready-and-waiting
European Monetary S ystem ( E MS ) .
To bury the concept of govern ment responsibi lity
for industrial and technological advanc e , a concept
c entral to the new EMS , London networks , through
K i s s inger, are m anipulating the j ustifiable anger of
businessmen strangled by enviro n m enta l i s m and tax
policies into an undifferentiated a s s ault against " B ig
Governm ent . "
This antid irigist, " free enterpr i s e " sentim ent
dom inated the New York productivity conference . The
keynote, presented by C. Jackson Grayson, chairman
of the Am erican Produc tivity C enter and for mer
chairman of the U . S . Price Com m i s s i o n , set the tone.
26 I N T E R N AT I O N A L E X E C U T I V E I N TELLIG E N C E R E V I EW
I gnoring comp letely the cause of worldwide
inflation-namely, the inherent inability of the IMF­
World Bank dom inated international monetary
s ystem to support real econo m i c growth and world
trade - Grayson instead called for a " national
productivity effort which, in my opinion, is the single
most effective thing that this nation can do."
" The pri m e source of growth is productivity , " said
Grayson. " If we are to have growth , reduce inflation ,
and create j obs , then there must be an increase in
productivity. . . . I propose a produc tivity
solution. . . . Call it, i f you w i l l , Proposition 1 4 :
Productivity . . . . "
Grayson ' s theme was echoed b y Thomas Murphy of
G eneral Motors, who blamed " governm ent spending
a s the greatest single cause of this year ' s inflationary
spurt" and called for the country to emulate the
" m iraculous Mr. Jarvis (the sponsor of Proposition
1 3 ) by em barking on an anti-governm ent binge .
Likewise, Thomas R a leigh, senior vice president of
Lockheed Corp . , ma intained that " the Jarvis
sentim ent is the national voice of the peop l e . The
them e of Proposition 13 is that the Am erican people
have had enough of Big Brotherism . . . . We need a
Jarvis-Gann initiative on productivity, unemploym ent
and inflation , a labor-industry coalition to boost
p roductivity. ' ,
Government regulation was hit by nearly every
speaker as a prime cause of declining productivity,
including by Fed Chairman Miller. Miller, who has
repeatedly insisted that the A m erican econo m y would
benefit fro m a recession, put on his best probusiness
fac e and c a l led for an " extensive reform of F ederal
regulatory activiti e s " and for devoting "a larger
share of GNP to capital investm ent . "
M i ller has n ' t reformed overnight ; he i s j ust c lever
e nough to know that the deregulation issue is not only
one of the easiest ways of diverting the business
com m unity ' s attention from the real solutions to the
c urrent economic m e s s , but it can be a very effective
weapon against industry, a s the havoc wreaked on the
airlines by rate deregulation a m p l y testifies .
While the speakers took pains to insist that
productivity is not antilabor and does not m ean speed­
up or wage cuts , the ruthless gouging of labor ' s living
standards is the bottom line of any productivity
program that operates within the anti growth confines
of the c urrent world monetary syste m .
- Kath leen Murphy
Oct . 1 0 - 1 6 . 1 978

Arabs, Japan , Sov i ets l i n k u p with EMS
New monetary order seeks war-avoidance-but where 's the U.S. ?
The French. West Germans . a nd Soviets are now
c losely coordinating their d i p l o matic and econo m i c
activities t o p u t into action t h e n e w E uopean Monetary
S ystem and its poli cy of j oint E a st-West develop ment
of the Third World. These countries and their allies in
Japan. the Arab nations . and the Third World are
trying to ex ert the leadership n ec ess ary to avert war
and economic collapse - the kind of leadership for
which for so many years the world looked to the
United S tates.
The following three-part report deta ils how those
efforts took shape last week around the world .
It is now c lear from reports of the j ust-concluded
Franco-Soviet trade com m i s s ion m eeting in Paris that
the French. West G er m an. and Comecon sector
economies are being integrated at the highest leve l s .
T h e fact that t h e Soviets u s e d t h e P a r i s m eeting a s the
site of their announc em ent of a major nuc lear deal
with Li bya s ignals that j oint develop m ent of the Third
World is a maj or component of the East-West
E u ro pe : a sh ock treat m e nt fo r Brzezi nski
Am erican Nationa l S e c urity Advisor Zbigniew
Brzezinski arrived in E urope on O c t . 2 for a tour of
Western capita l s . including Pari s . Bonn and London .
expecting t o a r mt w i s t G e r m a n y and Franc e . He w a s
looking for s upport of a s eparate peace between E gypt
and Israel. aba ndonm ent of Franco-German deter­
mination to implem ent the new E uropean Monetary
S ystem and Fund. and a halt to expanded cooperation
with the Soviet Union under the threat that West
Germany ' s " self-F inland ization " m i ght have to be
ha lted forc eful ly.
But instead. Brzezinski was treated to some of the
most determined language from the German and
French governm ents to date . E x c epting London .
which has already officially endorsed the Carter
Administration ' s proposal for a Lebanese " peace con­
ference" excluding the Palesti n i a n s . E uro p e ' s leaders
Oc t . 1 0- 1 6 . 1 978 E X E C U T I V E I N TE L L IG E N C E R E V I EW
.CONOM ICS )
i ntegration. The first part of th i s report desc ribes in
depth the wide range of E urop e ' s activities to that end .
Japan ' s govern ment has c o m e out with its own
E M F -type arrange m ent. as the third article in this
s e ction deta i l s . urging tight collaboration with
continental E uropean forc e s . d e v e loping Third World
c ountries . and the OPEC states of the Mideast.
And Japanese Pri m e Minister Takeo F ukuda ' s trip
to the Mideast pointed to the other part of the
Japanese-E uropean " G rand D e s i g n . " when Sheik
Yam ani offered direct ship m ent of oil to Japan.
bypassing the multinationa l s . i n return for direct
technology transfers . But Y a m a n i ' s offer is by no
m eans restricted to Jap a n . as the O P E C portion of our
coverage sho w s .
Forty years a g o t h e Munich a g r e e m ent was si gned
as the inevitable c l i max to the Briti sh-run economic
insanity of the 1 920s and 1 9 3 0 s . Tod a y the Western
E uropeans. Japane s e . Soviets . and O P E C nations are
providing the leadership . where the U . S . has so far
fa i l e d . to make sure there is never a nother Munich.
are now united around Cha n c e l lor S c h m idt and
President G i scard D ' E staing to resist the m arch of
Brzezinsk i ' s oligarc h i c a l fa ction i nto economic
depression and war.
F rom Brzezinski ' s standpoint. the trip could not
have been more ill-tim ed . It c o i n c ided with the
Thirteenth Session of the Franco-Soviet Grand
Com m is s ion in Pari s . and the " notifi cation" by the
West German Bundestag of the 2 5 - year G erman­
Soviet econo m i c cooperation agre e m ent. Brzezinsk i ' s
worst nightmares about so-called F i nlandization roll­
ed on all week .
In an interview with the newspaper Europiiische
Zeitung. Chancellor S c h m idt stre s s e d a " E urope from
the Atlantic to the Ura l s " concept :
France and the Federal R ep u b l i c of Germany
form a c lose partnership which w i l l m a intain
E CO N O M ICS 27
 France and the Federal R epublic of Germany
form a close partnership which will maintain
continuity of EEC policies for the next year.
E urope is now able to rai s e its united voice in
i nternationa l affairs , and a large part of the
E uropean Com munity' s policy is cooperation with
the East bloc nations and the Third World. As
E urope is a greater E urope, because both Western
and Eastern E urope originated i n com mon
c ultura l , but also economic roots , negotiations
with the Comecon are of key i m portance.
Se veral days later , a s reported i n Die Welt Oct. 5 ,
Schm idt addressed a congres s of h istorians i n
Ham burg, warning against Christian-Social Union
leader Franz-Josef Straus s ' s b e l ligerent use of the
theme of G erman reunification :
I want to warn against sent i m ental use of the i ssue
of German reunification. . . . E urope cannot be
lim ited to the area of the present European
Com m unity . . . but has to b e seen and understood
in its manifold unity . . . . We ( m us t ) contribute to
the next chapters of history a n d thereby shape our
own future . We m ust also m a ke history, and not
j us t conserve the past . .
But while Brzezinski and his K i s s i n gerian allies are
using their hold over the Carter A d m i n istration to
The E M F versus the I M F
On Sept. 26 the Italian financia l daily I I F iorino
published a pointed comparison of the European
Mon e ta ry Fund and th e British - b a c k e d
In terna tional Monetary Fund. Here are excerpts
from the article entitled "EMF versus IMF. " which
was written by An tonio Lova to and datelined Paris.
President G iscard d ' E staing and Chancellor
Helmut Schmidt are determined, cost what it will . . .
to implement the plan for a " E uropean zone of
monetary stability" before the year ' s end . . . Italy
has comm itted itself . . . .
The EMF will end up being the a lternative to the
IMF with the following characteristic s : the EMF is
in favor of fixed parities , in opposition to the
floating system that the IMF has accepted . The
EMF also has rehabilitated gol d , while the IMF is
for demonitizing gold . . . . The E MF would m ean­
while become the dispenser of credits on a scale not
m uch below that of the Washington-based Fund.
The impress ion is that France and the Federal
R epublic of Germany w i l l exert all sorts of­
pressures on Italy to make it enter in the monetary
zone . . .
British participation i s sti ll rather doubtful . . .
England prefers the IMF , which i s accustomed to
giving her greater amounts of credit than any other
beneficiary . . . . England, whose gold reserves make
up only 5 percent of tota l reserves .
28 ECO N O M ICS EXECUTIVE I N T E L L I G E N C E R E V I E W
c reate what one German source described as the
worst era of offical relations between West Germany
and the U . S . in the postwar era , G iscard and Schmidt
are using what means they have at their disposa l to
influence the White House . According to sources c lose
to the West German Foreign Ministry, the BRD and
France used last week ' s International Monetary F und
conference in Washington to d i screetly set up
channels of com m unication with the White House
independent of the normal channels controlled by
Brzezinsk i .
S i m i larly, when the Frankfurter Allgemeine
Zeitung alleged that West Germany fears an early
agreem ent between the U . S . and Soviet Union on
strategic arms lim itations ( S A LT ) because it would
s omehow leave E urope defensele s s , Defense Minister
Apel responded with a state ment affirming that his
governm ent " looks forward to a successfu l and early
conc lus ion " of SALT I I .
The Franco-Soviet " G rand Co m m ission , " created
when Charles de Gaulle initiated the era of " detente ,
entente and cooperation " with the Soviet Union, j ust
concluded its highly successful Thirteenth S e ss ion,
presided over by French · Prime Minister Raymond
Barre and Soviet Deputy Prime Minister Kirillin . In
order to keep growth in trade moving toward targeted
trip ling between now and 1 980 decided by G i scard and
Brezhnev during their 1 9 7 7 sum m it meeting, France
has announced that it is ready to unblock up to 10
b i llion francs worth of credit " at a favorable rate , "
according t o F rench F inance Ministry sources .
Among the firms that would be involved in new deals
are Pechiney-Ugine-Kuhlman ( for a 3 billion france
alum inum plant in S iberia ) , Technip ( a gaslift p lant in
S i beria worth 750 m i llion franc s ) , and other proj ects
with Creusot- Loire , RhOne-Poulenc and S aint-Gobain.
I n addition, agreement was reached on increasing
j oint research in fastbreeder and fusion energie s , and
space cooperation .
Trad e stems u nemployment
I nterviewed on Soviet television at the conc lusion of
the Com m ission talk s , F rench Prem ier Barre
expressed satisfaction with the results in increased
trade. But he added :
You know that Franco-Soviet economic cooper­
ation is not only econo m i c but that it is for
E urope and for the world . I hop e, for my part, that
this Franco-Soviet entente, this cooperation
between our two countries , can be an i mportant
factor of international detente, of peace in E urope
and in the world. It i s with confidence that I
envisage the future of our relations . . .
Hungarian government leader Janos Kadar is
arriving in Paris Nov . 1 7 to m eet with Presi dent
G iscard, the F irst Franco-Hungarian s u m m it s ince
before the Second World War . Trade deals lead the
agend a . Following President G iscard ' s visit last
m onth to Poland , a F rench delegation is currently
Oct . 1 0- 1 6 . 1 978
there negotiating a b i l l ion-franc deal for the sale of
nine French ships . Th i s deal and those being
negotiated with the Soviet U n ion are explic itly
conceived in France as ste m m i n g the tide of an
increasingly dramatic unemployment situation .
Picking up the pieces after Camp David
F rance and West G e r m a n y are a l s o giving the U . S .
lessons o n how to run p o l i c y i n the Middle East and
Afric a . Contrary to U . S . p o l i c y , which has de facto slid
into a c c eptance of the S m ith governm ent' s " solution"
to the southern Africa c r i s i s , E urope i s stressing the
need for econom i c develop m e n t . Otto Wolff von
Amerongen , leader of G e r m a n p r i vate sector
industrialists, i n addre s s i n g the Germ an-South
African Chamber of C o m m er c e in Johannesburg
emphasized that :
If S outh Africa wants to get out of its econom i c
bottleneck s , it w i l l h a v e t o c reate about 200, 000
new j obs each year . . . . We have to rej ect any
pol ic i e s of em bargo or blockade, because this
would first hit those conc erned , the black
workers . . . . Apartheid i s an obstacle to econo m i c
a n d industrial develop m ent i n S outh Afr i c a . The
S outh African governm ent would do well to lift the
rac ial l a w s , to allow the blacks to partic ipate in
OPEC : d i rect o i l fo r d i rect tec h n o l ogy
E m i lio C o lombo , the president o f the E uropean
Parliam ent, told a s p e c i a l l y organized Italo-Arab
d ia logue in R i m i n i , Italy last week that the " Bremen
Aggreements . . . must be extended to the Arab
nations as well a s the least d eveloped countries . "
C o l o m bo ' s s tate m e n t r e f l e c t s the econo m i c
integration drive s i n c e the E uropean Monetary
S ystem proposal at the Bremen s u m m it last Jul y.
E u ro-Arab econo m i c integration f o r developm ent is
n o t n e w . M a n y of t he t e c h n o l o g y t r a n s f e r
arrangements e s p e c i a l l y t o A r a b o i l p roduc ing nations
have been actively pursued s i n c e the 1 9 73 Mideast
war. But since the Bremen accords there has been an
escalating proc e s s a i m ed at bringing the ongoing Ara­
ab-E urop ean econo m i c d i a logue to fruition.
A significantly new variant i n econo m i c c ooperation
negotiations with the Middle East oil producers is the
heightened role of Japan . The Japanese governm ent is
closely coordinating wi th the West German and
French governments to procure expanded transfer of
technology deals for the Mideast O P E C countries . In
return, O P E C has begun to voi c e an unprec edented
policy of moderation on p r i c i n g and p roduction of
crude o i l , in the interest of world economic stab ility.
Fukuda 's Persian Gulf tour
The early S eptember tour of J a p a n e s e Pre m ier Takeo
Oc t . 1 0- 1 6 . 1 9 78 E X EC U T I V E I N T E L L I G E N C E R E V I E W
industr ia l develop m ent as the white workers do .
In order to concretize this p rodeve lop ment relation­
ship with Africa , F r a n c e has been i n strum ental in
negotiating the diplomatic entente between Angola
and Zaire which was part of the " boo merang" effect
of the British- Belgian i n s t i gated S h a b a province crisis
this summer. This week the F rench firm Tita n , whose
m a i n c lients inc lude the French a r m y and the Soviet
Union, concluded a $6 m i l lion deal w ith Angola for a
c istern tank a nd industr i a l v eh i c l e p lant which will
allow Angola to save $30 m i l lion i n fore i g n exchange .
In the Mideast, the French are p i c k i n g up the pieces
before the C a m p David debacle l e a d s to w ar . Foreign
Mini ster Louis de G u ir in g au d , after consulting with
Arab offi c i a l s , p roposed fro m the U n ited Nations a
Lebanese cease-fire form u l a who s e i m m ed iate a i m i s
to s t o p t h e bloodshed . C o n t r a r y to t h e hopeful
a s s ertions of Brzez inski and the S tate D epartment,
Franc e ' s p roposal is emphat i c a l l y not conce ived as
part of the C a rter A d m i n i stration ' s p roposal for a con­
ference that would leave out the P a l e s t i n i a n s . In fact,
the F rench President i s known to b e working towards
a Paris Middle E ast peace conference that would
include the p a rties exc luded fro m the Camp David
talks .
- D. Sloa n a n d J. Sigerson
F ukuda heading a high-level 50- m a n trade delegation
to four oil p roduc i n g states of the P e r s i a n Gulf had a
dram atic effect on O PE C ' s p o l i c y v i s -it-vis the dollar
and future o il p r i c i n g poli c y . F o l l o w i n g his talks with
the leaders of S audi Ara b i a , I r a n , Qatar , and the
U nited Arab E m i rates ( U AE ) , the Emirates News,
S e p t . 1 7 reported that Fukuda i n fo r m ed h i s cabinet
that :
We have won a n understa n d i n g from the leaders
of the four countries either for a freeze on oil
prices or the i ntroduction of m in i m u m in c reases
to prevent adverse i m pacts o n the world econom y .
It is i n thi s context that t h e S au d i s and other leading
m e m bers of OPEC have continued their unflinching
s up p ort for the dolla r . S au d i P r i n c e Abdullah, the
s econd Crown Princ e , told the R i yadh D o m estic News
service on S ept. 1 4 :
. . . the currency muddle w h i c h governs the world
today cannot be dealt with by d e a l i n g blows to the
dollar, particularly now that the dollar has
become a currency unit for m i n g a basic factor in
bolstering other c urrenc i e s . W e m ust not overlook
the fact that the fields of investm ent of the dollar
are much wider than those of any other c urrenc y .
We m u s t a l s o n o t forget t h e inflation from which
the world suffers and the effect the dollar can
have i n remedying it .
ECO N O M ICS 29
 Pla tt 's Oilgram reported S ep t . 28 that the OPEC
nations were disturbed b y the outcom e of the Inter­
national Monetary Fund (lMF) m eeting last week,
and that no action was taken to resolve the world
monetary crisis centered on the falling value of the
currency. Pla tt's reports that O P E C and the other
underdeveloped nations were critical of British
Chancellor of the Exchequer D e n i s Healey's demand
for the same kind of currency stabilization efforts
which have prevailed until now . A reporter on the
scene on the IMF parley indicated that many of the
OPEC and underdeveloped countries would like to
return to some form of fixed parities between
currencies to stabilize the dollar. He noted that these
countries are " getting a good sounding" from E urope
on the EMS as a m eans of achieving such currency
stability.
01 1 for tec h nology
Saudi Oil Minister Sheikh Zaki Yamani told the
Japanese press, Sept. 1 2 :
The door to deals for direct o i l supplies could be
opened by Japa n ' s transfer of technology to Saudi
Arabia and other oil produc i n g nations . . . . Saudi
Arabia needs Japan for industrialization and
Japan needs Saudi Arabia for oil . . . Saudi Arabia
has made a deci s ion not to export oil directly
without reciprocation i n technology transfer and
cooperation in industrialization , w i th Japan being
one of the few countries that can meet Saudi
Arabia ' s needs . "
Yamani i s heading up a newly formed Long Range
Planning Comm ittee within OPEC which is present­
ly putting together for the first t i m e , a 1 0-year
production and pricing formula a s part of a global
economic proj ection . Venezu e l a n Oil Mini ster
Hernandez Acosta, following a m eeting last week of
the Comm ittee in Taif, Saudi Arabia told Pla tt 's
Oilgram , S ept. 28 :
. . . we want to avoid another s i tuation like 1 9 7 3
. . . Venezuela i s propos i n g a gradual increase in
the price of oil . . . and a formula so that the
i mporting nations will know in a d vance what is
happening with the pric e , while we protect the
purchasing power of our revenues in relation to
the dollar and inflation . . . .
We have a b i g respon s i b i lity not only in
reference to prices but in providing the right
supply for the industrial a s w e l l as the developing
countries, to avoid a world supply trauma .
Yam ani is already known for the s a m e kind o f long
term small incremental price rise approach to OPEC
pricing policy. Such price rises would amount to no
m ore than 2 to 3 percent annual l y with a maximum of
5 percent. Abdul Hadi Taher, the d i rector of Saudi
Arabia ' s state-owned oil company Petro men was
quoted by the Sept. 30 Financia l Tim es a s saying that
the December OPEC price settin g m eeting would
yield no more than a 5 percent price rise. He dis-
30 ECO N O M ICS EXECUTIVE I NTELLIGENCE REVIEW
counted any serious effect the controversial Camp
David Accords might have on OPEC pricing policy.
O P E C ' s Secretary G eneral Ali Jaidah, on the
occasion of OPE C ' s 1 8th anniversary last month made
a powerful public statement from OPE C ' s Vienna
headquarters on behalf of the cartel calling for
transfer of technology from the advanced nations to be
stepped up as a price for OPEC pricing moderation :
Through our moderation in the exercise of the con­
trolling power over prices and production of crude
oil in our sovereign territories , we have hopefully
banished forever the spirit of confrontation which
for so long bedeviled relations between OPEC and
the industrialized consuming nation s.
In order, however, for us to be a b l e t o continue
to observe that moderation, we require something
in return, namely the cooperation of the west in
reaching our aspirations in the downstream sector
of the oil industry s uch as refineries , petro­
chem icals, transportation s .
Another strong indication that the Persian Gulf oil
producing states are planning to exert more
i ndependence in selling their crude through state-to­
state oil-for-technology deals c a m e during a Sept. 20
Arab OPEC (OAPEC) meeting. The nine OAPEC
m e m bers announced from S audi Arabia that
preference should be given to Arab tankers in
delivering crude . Moreover, OAPEC will extend an
$80 m illion subsidy to the Arab Maritime Petroleum
Transport Company to cover operating losses.
U n ified reg ional development perspective
The Arab League and the O AP E C are coordinating
regional developm ent for greater effectiveness .
OAPEC j ust produced a n e w five-year plan, which
according to the Baghda d Observer calls for even
closer coordination in all areas of refining and
petrochemical industrial develop ment, and urges a
pooling of sparse skilled industrial labor among the
m em ber nation s . It also calls for a greater role of the
advanced countries in training executive and skilled
labor within the downstream sector of the petroleum
industry.
At a recent meeting of the Arab E conomic Unity
Council, the Iraqi Trade Minister proposed creating
new Arab money m arkets to fund regional
development and stressed that the foundation of Arab
Unity was a unified approach to regional develop­
m ent . The statement from the Iraqis represents a
break with Baghda d ' s i deological isolation within the
Arab world. More than that, it indicates the
a wakening within OPEC and the Arab world to the
idea of cooperation with the industrialized states of
both East and West as they key to regional stability
and world peac e .
T h e success of s u c h a global strategy depends
dec i s i vely on the success of the E uropean Monetary
F u nd .
-Judith Wyer
Oct . 1 0-1 6 . 1 978
Ja pa n : b ui l din g u p 'Bre m en East'
Japan i s now b u i l d i n g a s o l i d A s i a n counterpart to the
E uropean Monetary S ys t e m , a " B rem en E a st , "
i mp l e m e n t i n g the strategy for g e d i n d i s c u s s ions with
West G e r m a n y d u r i n g the w e e k s p rior to the J u l y
B re m e n m e e t i n g . The e s s e n c e o f the a p p roach i s to r e ­
c y c l e into c a p i t a l - d e v e l op m e n t p roj e c t s d O l l a r s n o w
u s e d m a i n l y for ro l lover of debts , s p e c ulation or other
unprod u c t i v e purpos e s .
T h e A m e r i c a n o b s e r v e r of th i s process should not
look for a spectac u l a r m ee t i n g a la B r e m e n in which a
grand new i n s t i t u t i o n i s a n n o u n c e d - the Japanese
s i m p l y do not work that w a y a s yet . I nstead , J apan i s
Q u i e t l y b u i l d i n g d e v e lop m e nt a l l i a n c e s w i th strategic
countries s u c h a s M e x i c o and O P E C i n which trade i s
transformed from mere b i lateral exchanges into
p o l i t i c a l l y d e t e r m i ned d e v e l o p m e n t a l p la n n i n g .
Though the i n d i v i d u a l a c t i o n s m a y at first appear a s
so m e what rou t i n e , a lb e i t more s i zea b l e d ea l s , the
a c t u a l content i s m u ch more .
As J a p a n e s e P ri m e M i n i ster Takeo F ukuda told
M e x i c a n n e w s m e n last week, " J a p a n depends on
exports of i n d u s t r i a l p roducts and capital goods while
M e x i c o has o i l a n d other natural resources and is p ro­
m o t i n g i n d u s t r i a l p roj ects . Thus. economic relations
bet ween th e t wo are not limited o nly to trade. Rather.
we h ope to broa den economic cooperation and to offer
Mexico th e fina ncia l and technological means for agri­
cultura l a nd industrial development" ( e m p h a s i s
added ) .
At the s a m e t i m e , M e x i c o m a ndated four Japanese
banks - I n d u s t r i a l Bank of J a p a n , M i t s u b i s h i . S anwa
and Dai-ichi K a n g yo - to orga n i z e a $500 m i l l ion loa n .
s i n c e doubled to $ 1 b i l l ion, to fina n c e c a p ital develop­
ment p roj e c t s i n M e x i c o . One Quarter, to be handled
by M i t s u b i sh i . will be a ten-year yen-denominated
loan at a n astounding 6 p ercent interest rate - far
below E urodo l l a r ra tes .
M e x i c a n P r e s i d e n t Lop ez Portillo w i l l v i s i t Japan
beginning Oct. 17 to consolidate the development
a l l i a nc e .
S i m i l a r l y , in d e s c r i b i n g F u k u d a ' s m i d-September
l O-da y tour of the M i d e a s t , J a p a n ' s Mainichi Daily
Ne ws editor i a l i zed S e p t . 6 , " I t w i l l be of s i gnificance
for him to d i s c u s s the fea s i b i l i t y of tripartite coopera­
tion c o m b i n i n g the funds of oil c ountri e s . Japanese
technology and the manpower o f non-oil countries . "
This i s exactly what F u k u d a negotiated during h i s
tri p . On t h e s a m e day t h a t F ukuda a d d r e s s e d Japa n ' s
D i et upon h i s retu r n . S e p t . 2 1 , the D u b a i-based B a n k o f
O m a n announced i t w i l l soon o p e n a deposit-ac c eptin g
bra nch in Hong K o n g - the first w h o l l y OPE C-owned
bank to do so - i n order to pool Japanese and O P E C
f u n d s to f i n a n c e proj ects i n A s i a a n d t h e M i d e a s t . The
announc e m ent said the a i m was to take advantage of
Japan ese . Korean and P h i l i p p i n e s technology . P etro-
O c t . 1 0 - 1 6 . 1 9 78 E X EC U T I V E I N T E L L I G E N C E R E V I E W
c h e m i c a l proj ects and oi l-for-te c h n o l o g y a greem ents
were announced during the trip as w e l l a s a common
determination to stabilize the d o l l ar .
Japan-German coordination
Japan ' s c urrent actions were p l anned in intensive
d i s c us s ions held over the A p r i l - J u l y p eriod between
Japanese and German offi c i a l s and b u s i n e s s m e n ,
a c c ording to J a p a n e s e b a n k i n g sourc e s . These
d i s c us s ions were part of th e l ea d - u p to the July
B r e m e n a c cords which created the E urop ean
Monetary S ystem . They also p l a n n e d out a " Bremen
East. "
The key figures on the J a p a n e s e s i d e were unoffic i a l
e m i ssaries of P r i m e M i n i s t e r F uk u d a , individuals
within the Industrial Bank o f J a p a n . a n d sections of
the Mitsubishi bus iness group . The a l l i a n c e between
the latter two business groups a n d their political allies
in the ruling Liberal-Democratic party ( F ukuda and
Y a suhiro Nakason e ) i s the b a s i s o f J a p a n ' s forthright
m oves over the last few month s . O n the G e r m a n s i d e .
t h e key representatives w e r e e m i s saries of H e l m ut
S c h m idt - who has had a p e r s o n a l relationship with
Japan and F ukuda s i n c e both S c h m id t and Fukuda
were finance m i n i sters . along with F ra n c e ' s G is c a r d .
i n 1 9 7 3 - as w e l l as Deutsche B a n k and German
business a s s oc iation head Otto W o l f von A m erong e n .
Both have longstanding b u s i n e s s t i e s to Japan .
S o m e t i m e in the spring, a c c o r d i n g to the Japanese
sourc e s . Japan and G e r m a n y d e c i d e d that Treasury
S ec retary Michael B l u m entha l ' s g r i p on the U . S .
A d m i n i stration was too strong t o reverse the U . S .
weak dollar polic y . Therefo r e , the two countries and
F r a n c e would have to act i n d e p e n d e n t l y o f the U . S .
both t o stabilize the dollar a n d t o c reate the envir­
o n m e n t in which the U . S . s ituation c o u l d be trans­
for m e d .
T h e E uropean w i n g of t h i s strategy w a s t h e Bremen
a c c ords the m s e l v e s , which s e t up a c re d i t fac ility to
r e c y c l e E urodollars into prod u c t i v e trade activit y .
T h e content of Japa n ' s a c t i v i t i e s w a s to b e t h e s a m e ,
but i n a s o m e what l e s s d irect for m . T h e Germans ,
particularly D eutsche Bank , a d v i s e d J a p a n to step up
the role of the Tokyo internat i o n a l c ap i t a l market in
order to e l i m inate c urrent d o m ination of the i\,sia
dollar m a rket b y British-contro l l e d Hong Kong and
S i n gapore a s well a s to a d d J a pa n ' s financial m ight to
the E uropeans ' develop ment effort s . Three steps were
discussed :
1 ) Yen-deno m i nated loans s h o u l d be expande d .
N o m u r a R esearch I n stitute r e p o r t e d last w e e k that
i n the year ending March 1 9 7 9 yen loans w i l l double
the 1 9 7 7 - 7 8 figures to reach the e q u i valent of $5
b i l lion . They can increase a t least 20 percent
annua l l y thereafter i f restr i c t i o n s a r e removed . .
E C O N O M ICS 31
 2) Dollar loans should be expanded. Due to London­ negative interest margins on most funds.
organized speculation. Japan's dollar reserves have Businessmen and bureaucrats in Japan are now
soared to $29 billion. In recent months. the Bank of debating to what extent to risk London's wrath by
Japan has lent dollars to selected commercial banks moving with Bremen East.
at slightly below Eurodollar market interest rates.
These funds are being lent out long term for capital The Case of Mex ico
development projects - exactly the content of the Japan's economic diplomacy over the past few
European Monetary Fund. Without these con- months shows it is moving ahead with the Bremen
. cessionary rate deposits. long-term lending is very East policy. The case of Mexico is quite striking.
limited. Mexico. under President Lopez Portillo. has a
This policy has driven London up the wall. The commitment to industrialization comparable to
S eptember issue of the Rothschild-published In ter­ Japan's own during the late 1 9th century "Meiji "
na tional Currency R e vie w fiercely attacked this period. Last week. Japan's leading business
practice as credit-dumping. " It could well turn out. " federation. Keidanren, led by Toshio Doko. visited
I CR w ar n e d . " that the ori gInS of the Mexico to secure oil deals and promote economic
' crash o f 1 9 79' should b e sought not i n Saudi Arabia. cooperation. State-owned PEMEX oil chief Diaz
but in the challenge to the Western banking system Serrano has indicated that beginning in 1 982 Japan
coming from the Far East. " U . S .commercial banks could purchase 200.000 barrels per day. or 20 percent
- fearful of losing deals to Japanese - pressured of Mexico's projected production.He emphasized to a
Vice-Finance Minister Matsukawa to stop this Sept.27 press conference, "We have great interest in
practice during the latter's August trip to the U . S . having Japan's cooperation in other areas .. . in very
These same bank s have meekly tolerated specific areas of industrialization. such as capital
Blumenthal's weak dollar. IMF dictatorship policy. goods and heavy industry where Japan has a great
Due to this pressure, Japan has so far limited the deal of experience. "
concessionary loans to an estimated $400-500 million S ome of the members of the Keidanren mission.
per month - far below development needs. took a "hard-nosed businessman's " approach to
3) Japan and OPEC should pool funds. This is Mexico: 1) they tried to pressure Mexico to cut the
exactly what Fukuda discussed on his Mideast tour price of oil ; 2) they labeled as obstacles to cooperation
and what the Bank of Oman move into Hong Kong Mexico's protective controls over foreign investment
represents. (controls not unlike Japan's own) ; and 3) they
The speed and manner with which Japan moves attacked Mexico's progressive labor legislation. In
ahead with this program is determined by the degree addition. they hired as their agent to secure contracts
of support it obtains from Europe, OPEC. and U.S. the Business Coordinating Council (CCE) led by Jorge
industrialist forces. particularly the Chicago group. Sanchez Mejorada.The CCE is controlled by the Mont
One Japanese banker told the Executive In telligence Pelerin Society and the economic faction in Mexico
R e vie w, "There is a great deal of pressure that can be determi ned to destroy Lopez Portillo's
applied to Japan. For example. the dollars in Japan industrialization program.
are hot money which can flow out as easily as it flowed Mexico. eager to obtain Japan as an economic
in. What happens if we lend long term and then the partner but unwilling to undermine its own develop­
dollars are removed from J apan? Furthermore. on ment commitments in order to do so. refused to
some pretext or even genuine tightness of the Euro­ discuss cheapening of oil prices and alteration of
dollar market - such as during Mideast tension - investment laws.
ways are found to apply a disguised ' Japanese pre­ More far-seeing government and business layers in
mium' (a higher interest rate to Japanese borrowers Japan have been quick to rectify the Japanese
than others. first applied during 1 974 Herstatt approach. Premier Fukuda. in his interview with the
collapse-ed.) Therefore. we are trying to reduce our Mexican press. implicitly rejected pressure to change
dolar obligations and will move cautiously on overseas Mexico's laws by saying there were no obstacles to
investment and loans unless we are assured of economic cooperation . S i m u lt a n e o u s l y . the
support. " Mitsubishi. Nissan and Matsushita conglomerates
Economic necessity. nonetheless, compels Japan to each announced interest in expansion of manu­
move aggressively to restore world trade and facturing projects in Mexico. indicating there was no
monetary stability.In the last three months. exports problem with the investment laws. Japanese banks
in real terms have staggered 8 percent below 1 9 7 7 are providing major financing for Mexico. with the
levels - the product o f world trade stagnation. the yen-denominated component at very lenient interest
rising yen and "voluntary " export restraint. So far rates.
this year 72 major multimillion dollar projects have
been lost to competitors due to the rising yen. The The case of OPEC
effort to prevent this loss from crippling Japan's As Japan's Asahi E vening News reported prior to
export-dependent economy has strained the credit Fukuda's departure for the Mideast. " He hopes to
system to the utmost. Banks are now receiving build up bonds of cooperation with the Arabs in such a

32 ECO N O M ICS E X E C U T I V E I N TE L LI G E N C E R E V I E W Oct . 1 0- 1 6 , 1 978

way that their oil dollars w i l l be used to stabilize the
free world econom y . " In addition to pooling OPEC and
Japanese funds for capital investm ent. F ukuda
announced that the governm ent would support petro­
chemical proj ects in Saudi Arabia and Iran. as part
of a larger effort at aiding O P E C industrialization .
And he reported ly went over the " greening of the de­
serts " proposal recom m ended as part of the $500
bill ion global develop m ent report of the M itsubishi Re­
search Institute .
Sheik Y a m ani o f S a u d i Arabia proposed oil-for-tech­
nology dea l s . H e told F ukuda that S a ud i Arabia would
like to sell oil directly to J a p a n . bypassing the oil
m ultinationa l s . In a future oil c ri s i s . he pointed out.
Japan could not expect cons ideration from the multi s .
D irect deals would be approved o n l y i f Japan imp le­
m ented technology transfers to S audi Arabia. Ya mani
added .
S i m ilarly in Iran, F ukuda and Premier J aafar
Sharif-E m a m i agreed to find ways to sponsor j oint
research on alternate energy sourc e s . including
nuclear power, a s w e ll a s ensuring a transfer of tech­
nology. No specific proj ects related to thi s have been
announced as yet.
F ukuda told his cabinet that he had won under­
standing from OPEC for either an o i l price freeze or a
low increase in ord er to avoid d e stabil ization of the
dollar .
Prior to the Fukuda m i s s ion . for m e r Industrial
Bank of Japan chairman S oh e i Nakayama led the
third annual meeting of the M i d d l e E a s t Cooperation
Center with representatives fro m 14 Mideast countries
to plan further technology transfer p roj ects .
As a result of the " Bremen E a s t . " offe n s i v e , F ukuda ' s
political strength is soaring . F r o m a dis m a l 2 0 percent
popularity i n the beginning o f the s u m m er , approva l

F u k uda : O i l fo r tec h n o logy dea l s fo r Japa n a n d Mex i co

Japanese Prim e Minister Takeo
Fukuda, in a Tokyo intervie w
with Mexican newsm en Sept. 26.
outlined his conception of long­
term cooperation for
developm e n t b e t w e e n his
country and Mexico. The
interview. excerpts of which
appear below, cam e in the midst
of intense preparations for the
Lopez Portillo trip to the Far
East later this m onth. including
daily interviews and features in
the press of the t wo countries,
and a stream of back-and-forth
visits by b usinessm en,
':ongressional deputies and
governm ent officials. Excerpts
are taken from the m exican
dailies El Nacional and E l
Univers a l .
When President Lopez Porti llo
visits Japan. I wish to conduct
frank conversations with him on
the internationa l situation and
on the possibi lity of econo m i c
a n d technological cooperation ,
including disarmament
questions .
In economic term s , I think
that our relationship is
fundamenta l l y complem entary,
since Japan has scarce natural
resources, depending on the
export of industria l products
and capital good s , wh i l e Mex i c o
is r i c h in oil and m i n e r a l
resources and is sponsoring
num erous industrial proj ects .
Thus econom ic relations are not
lim ited j ust to trad e . Rather. we
hope for a b roa d e n i n g of
economic cooperation in which
Japan would offer Mexico the
financ ial and techno l o g i c a l
m eans needed for the industrial
and agricultura l develop m ent of
that country .
Mex ico R e s p o n ds :
" I n d u s t r i al i z a t i o n in
spec ific areas "
The Japanese interest in Mexi­
co is fully reciprocated at the
highest levels of Mexican
governm ent, and in strikingly
sim ilar term s. Belo w, the
Executive Intelligence R e v i e w
presents sections o f a press
conference held Sept. 27 by
Petroleos Mexicanos director
Jorge Diaz Serrano, together
with the Mexican minister of
Natural Resources and
Industry, Jose Andres de
Oteyza. Diaz Serrano endorsed
the formulations Fukuda used in
his press intervie w the day
before, but firmly rejected the
pressure of segm e n t s of
Japanese business who have
demanded that Mexico cut its oil
prices as a precondition for
increased Japanese investm ent
and trade. Excerpts from Diaz
Serrano's rem arks follow :
We have great interest in the
m arket of the Orient, and Japan
i s the largest internation a l
c o n s u m er a fter the U n i t e d
S tate s . W e a r e doing everything
possible to find a form ula to s e l l
them crude and refined
p roducts . We cannot s e l l cheap .
nor lower pri c e s . E ven if they
should wish it, we cannot do i t .
What interests us greatly i s
having cooperation with Japan
in other areas . . . industria liza­
tion in very specific area s , s u c h
a s c a p i t a l goods and heavy
industry. and Japan has a great
deal of experience in this fi e l d .
H e n c e . during the v i s i t o f
President Lopez Portillo, we
may possibly find some
arra n ge m ent. . . . in ter m s of
technology excha n g e . j oi n t
investm ents and investment s .
A s ituation o f selling o i l j ust
for the selling of it s i m p l y
doesn ' t interest Mex i c o .

Oct . 1 0- 1 6 , 1 978 E X E C U T I V E I N T E L L IG E N C E R E V I E W ECO N O M ICS 33

rose to 27 percent at a poll taken j us t prior to his return
from the Mideast. A current poll would undoubtedly
show a higher figure . F ukuda i s virtually c ertain to
defeat an attempt to replace him b y London-ally
Masayoshi Ohira , currently Liberal-Democrat Party
S e cretary-G enera l .
The foundation o f F ukuda ' s strength i s an alliance of
two crucial bus iness-politic al groups that have often
been kept at odds . F ukud a ' s m a i n backing comes from
the Mitsubishi group . Mitsubishi was created during
the l 870s as a vehicle for the p o l i c i e s of the dirigist
political faction in Japan, a faction closely allied to the
U . S . Lincoln Republicans . F o l lowing post-World War
II trust-busting and reformation, it had been partially
i nfi ltrated by antidirigist factions and has since been
politically split . Prior to becoming Premier, Fukuda
had mostly allied with the anti dirigist group and had
often criticized the very polic i e s h e i s now imple-
34 ECON O M I C S E X E C U T I V E I N T E L L I G E N C E R E V I EW
m entin g . But since becoming Prem ier, Fukuda has
m oved close to the prodevelopment wing of Mit­
subishi .
The second axis of the alliance i s the Industrial
Bank of Japan group , which backs LDP faction leader
Yasuhiro Nakasone. Throughout this century, the IBJ
has been the core of the prodevelop ment faction. Its
own influence within Mitsubishi i s key to the strength
of the latter' s prodevelopment wing. I B J is the prime
promoter of both fusion power and policies for Third
World industrialization.
S i n c e the spring of thi s year, IBJ and Mitsubishi -
and Fukuda and Nakasone - have formed a firm
alliance against Ohira and for the promotion of global
deve lop ment strategies . This a l l iance i s what made
possible J apan ' s close coordination with Germany.
- Richard Katz
Oct . 1 0 - 1 6 . 1 978
 C o
Sov i ets : Ca m p Dav i d , la n ot h e r Mu n i c h l
In c l ud i n g th re e ex c l u s i ve repo rts fro m N o vosti p ress a g e n c y
The l eadership o f the Soviet Union has given an
extraord inary warning to the interna t i o n a l
community. The wor ld i s now i n a s ituation so
dangerous that World War I I I b e c o m e s increasingly
probable, the Soviets have d e c l a red in a number of
public foru m s , j ust a s Great Brita i n ' s pact w ith H itler
at Munich Sept. 29 , 1 9 38 m eant that the countdown to
World War I I had begun .
And for the first t i m e , the Soviet press has accused
the British-l inked " B lack Internationa l " with seeking
control over the foreign policy of the United States
govern m ent in order to push that policy toward a
" m i l itary cata strophe " ( se e the a rt i c l e by S e rgei
Vishnevsk i i excerpted below ) .
The Soviet decis ion to go p u b l i c with this strategic
eva luation, which the U . S . L a bor Party has been
circu lating for over a year, i s intended to provide a
suffi c i ent shock to partic ul a r l y the United States and
Britain to set war-avoidance m e a sures into motion.
That the Soviets believe such a turn of events is
possible is indicated by the p o s i t i ve reference in
Pravda Oct . 1 to for m e r U . S . Presi dent D w i ght D .
E i s enhower . the com mander o f the U . S . armed forc es
in the wart i m e a l l i a nc e aga inst fasc i s m . and
representative. in the Soviet v i e w , of the " sane­
thinking" tradition in A m erican public life . ( F or
excerpts . see belo w . ) However, as the accompanying
excerpts from a second Pravda c o m m entary make
clear, the Soviet Union i s prepared to take matters
into its own hands should the West fa i l to act in t i m e to
prevent the outbreak of w a r .
How the present t urn developed
There can be little doubt that the treacherous
agreements of the C a m p D a v i d sum m it were what
fina l l y induced the Soviets to p u l l out a l l the stop s .
( S e e the artic l e " The M i c robes o f Munich . " below . )
And we l l - a i m ed attacks o n Britain and o n Z ionist
control of international terrori s m that have appeared
in the Soviet m i l itary and youth-ori ented press
indicate that the present policy shift has the strong
backing of a s i gnificant portion of the US S R ' s m i litary
and youth apparats .
The present turn h a s been b u i l d i n g since March ,
when the m i l itary daily Red Star. on the anniversary
of Hitler ' s annexation of Austria ( the Anschluss) ,
leveled the first s i gnificant atta ck on Brita i n . The
O c t . 1 0- 1 6 . 1 978 EXECUTIVE I NTELLIG E N C E R E V I E W
SO VIET SECTOR )
March 1 1 arti c l e described how P r i m e M i n i ster
N e v i l le Chamberlain gave H it le r h i s b l e s s i n g , hoping
to turn Nazi Germany to the E a s t . The " l esso n s of the
Anschluss" retain their s i gnificance to this d a y . Red
Star s a i d .
As G r e a t Brita i n ' s present-day s u b v e r s i o n of the
U . S . governm ent bec a m e increa s i n g l y apparent, and
the gleeful British backing for Z b i gn i e w Brzezinski ' s
" China card " fantasy took o n more a n d m o r e tangible
form ( i ncluding Chinese Party h e a d Hua K uo-fen g ' s
t r i p t o R o m a n i a a n d Yugos l a v i a in A u g u st ) . t h e Soviet
attacks on Britain esca lated . But contrary to
Brzezinski ' s calculations , the S o v i ets have not . on the
who l e , reacted to the deteriora tion of their relations
with the United States in a p a ranoid " hard-line "
fashion . Cruc i a l to th is w as the s m a s hing success of
Soviet Presi dent Leonid Brezhne v ' s M a y trip to West
Germany. which resulted in a k e y s tone 25-year treaty
for political and econo m i c cooperation .
The indications are that Brezhnev ha s conso l idated
political support behind thi s pol i c y as reflected in the
entire array of articles .
Ironically-from the standpoint of London- it may
w e l l have been the increa s i n g l y host i l e activities of
China and Israel that Britain h a s so lustily supported,
plus the deteriorating U . S . p o l i t i c a l c l i m at e , that
enabled Brezhnev to orga n ize foot-draggers in the
Soviet leadership to back h i m . S o v i e t m i l itary men in
particular may well h ave b e e n s wayed by the
argum ent tha t, in view of the e s c a lating war danger,
the USSR should seek every opening availab le to
bolster the " p rodetente forc e s " against the more
aggre s s i ve tendenc ies within the NATO a l l i a n c e .
Moscow 's perception of Carter
Wh i l e the Sovi ets have never b e e n enthusiastic about
J i m m y C arte r ' s Admin istration , there was a period
one year ago when it looked as if things m i ght not be so
bad . The O c t . 1 . 1 9 7 7 U . S . - S o v i e t Joint Statement
c a l lin g for a G eneva conference on the Middle East
was a hop eful sign. and the strat e g ic a r m s l i m itation
talks ( S A LT I I ) were proceeding w e l l .
The crisis in the Horn of A fr i c a and the Israeli
invasion of Lebanon. howe v e r . were a m ong the key
e v e n t s t h a t t h r e w th i s f r a g i l e U . S . - S o v i e t
rapprochem ent off balanc e . The S o v iet news agency
TASS res ponded to Carter ' s March 17 speech at Wake
S O V I ETS 35
Forest University, where he referred to the Soviet
Union as " our adversarie s , " w ith a release charging
that Carter's speech " means a shift of emphasis in
A m erican foreign polic y " away from detente. Soviet
Am bassador to the U . S . Anatoli i Dobrynin abruptly
flew to Moscow for consultations .
Brezhnev gave a major speech April 7 0n board a
cruiser in the Eastern port of Vladivostok , warning
that " both to the West and to the East of our frontiers
there are forc es interested in the arms race, in
working up an atmosphere of fear and hostility . "
Pointing to the " indec ision and inconsistency" of the
Carter Admini stration, Brezhnev ca lled for the U . S .
" to meet u s half way . " But " frankly speaking, " he
said, " we do not see such steps of late . "
Soviet and East E uropean press coverage of Carter
increasingly treated him a s the victim of a
conspiracy, centered in the figures of Brzezinski and
E nergy S ec retary J a m e s S ch l e s i n g e r . The
Czechoslovak daily R ude Pra vo May 23 c alled Carter
a pri soner of the " Israel lobby, " and compared him to
Harry Truman, whose " bad advis ers " kept him from
continuing the wartime alliance w ith the U S S R . More
recently, a Pra vda feature by V i shnevskii Sept. 2
identified S chles inger and Brzezinski as the hawks in
Carter' s cabinet, the main advoc ates of the " China
card , " who give the White House " top secret
recom mendation s , constantly a i m e d to subvert the
p rocess of detente . "
- Susan Welsh
Exc l u s i ve to o u r readers :
The three reports here, provided exclusively to
NSIPS news service and its affilia tes by the Soviet
Union 's No vosti Press Agency, include some of the
sharpest Soviet polemics to da te on the Nazi-brand
racism of the Zionists, the ominous parallels between
the Munich and Camp Da vid Summits, and the road to
lasting pea ce in the Mideast.
Tiger's paws a 10 Pek i n g
The G erman Naz is were already using it, and the
Zionist hawks are using it now , so one shouldn ' t honor
Chairman Mao and his successors as the inventors of
their policy on the national question .
When Germany set out to conquer the entire world,
the Nazis had worked out a plan for the " G ermaniza­
tion" of the United States of Am erica, where , they
claimed. "30 million peop le have German blood
flowing through their veins . " In fact, the Nazis did
succeed in starting a " G erman-Am erican Bund"
which recruited spies and various other people from
persons holding leading positions in Am erican
factories . and they succeeded i n forcing not a few

. . Black I nternational "
seeks to control
U . S. govern ment
From the "Interna tional Week "
column by Sergei Vishne vskii.
Pravda. Oct. 1 :
. . . Above all. blind anti-Soviet i s m
p ushed the Anglo-F rench
politicians into their disgraceful
deal with the fascist aggressors at
Munich. The internationa lly known
scientist from California. F red
Neil. writes in the book War a n d
Pea ce in Germany: At Munich,
. .
Britain and France went for a deal
with Hitler. proceeding from the
theory that the German position
and their own position toward the
S oviet Union could be identica l . "
Having p layed the Munich card,
and having given Czechoslovakia
away to be torn into shreds b y
H i tle r . t h e reactionary c i r c l e s o f
the Western state s , t a c i t l y
supported b y the USA, hoped that
the fascist aggress ion would b e
directed above all a n d on l y against
the East. against the Soviet Union .
T h e y b i tt e r l y m i s c a l c u l a t e d :
within the same year, Western
E urope was enveloped by a war
conflagration . Later on , U . S .
President D . E i senhower said :
" The world paid dearly for the
lesson of Munich, but it also
learned it. " But did everyone learn
it?
The sane-thinking politi c i a n s
undoubtedly drew realistic
conclusions from the lessons of the
Munich deal-the inad m i s s i b i lity
of " appeasing" and encouraging
aggress ive forces, the necess ity of
a collective rebuff to the war
instigators, the fact that anti­
Soviet calculations are fruitles s .
However, the " Munich
p s ycholog y " was not at all erased
from the consciousness of certain
Western circles. The chairman o f
the Socialist International , W .
Brandt, warns of t h e sinister
activity of the " Black Inter­
national " of right-wing belligerent
forces who forget the lessons of
history . . .
A s a result o f the w i l lfully
dangerous activities of the enemies
of detente , the i n t e r n a t i o n a l
situation h a s gotten more complex .
Human reason cannot tolerate this .
Maximal efforts o f the peace­
lo�ing forc es and governm ents are
necessary in order to prevent
another m i l itary catastrophe . . .
During the recent period, the
most sinister forces of American
imperialism have begun to launch
a counteroffen s i v e . Their
vanguard i s called the " new right "
- this is a coalition of extrem e
reactiona r i e s , bellicose a n t i ­
com munists , and m i l itari s t s ,
representing the most aggressive
portion of the m ilitary-industrial

36 SOVI ETS EXECUTIVE I NT E L L I G E N C E R E V I E W Oct. 1 0- 1 6 . 1 978

th ree co m m e n ta r i es fro m Novost i
German-Americans i nto c o m m itting subversive acts
against Ameri c a .
The Zionist leaders in T e l A v i v fol low the s a m e
principle, and demand f r om people of Jew i sh descent
living in various countries of the world with different
soc i a l syste m s , that they help the state of Israel, that
they work for Israel without any consideration of the
desires of the states in which those Jews l ive and
whose laws they observe .
The Maoists have now seized on the form u lation of
" dual citizenship . " But whateve r the turns of phrase
Peking uses to cam ouflage itself, the " Chanc e l lory for
the Affa irs of Chinese L i v i n g A b road of the Peop le ' s
R e p u b l i c of C h i n a " i s r e m i n i s c ent of the
corresponding institution i n Hitler ' s G er m any, c a l le d
" G a u-Austland , " w hi c h was c har ged w i t h t he N az i­
fic ation of G e r m a n s l i v i n g a b road . T h i s
" Chancellory" i s also re m i n i s c ent of the far-flung
network of Z ionist orga n i zation s , which work to
extinguish people ' s national fee l i n g s .
" China i s everywhere that the Chinese l i ve , " so
insist the Maoists . " Your b lood is thicker than your
pas sport, " is what the Nazis once m a intained .
When one th inks about that, one comes to the
conc lusion that nothing lays bare the true nature of
politics and ideology so c l e a r l y a s a r a c i s t standpoint
on the national question , even i f p e o p l e atte mpt to
cover it over with beautiful figures of speech .
The " A rya n " ra c i a l theor y of the s u periority of one
chosen p eop le above all others led to nation a l soc ial­
i s m , w ith its hatred against J e w s , G yp s i e s , S la v s , and
other " Non-aryans . " Where this led is well known .
Zioni s m , which sets e veryth i n g J e w i sh and Israeli
against a l l of humanity, is causing the tragedy of the
Pa lestinian peop l e , the s uffer i n g s of other Arab
peop l e , and the d i s c r i m ination a g a i n s t the Black Jews
i n I srael . With cynical c a l c u l ation , Z i o n i s m provokes
anti-S e m it s i m wherever it c a n i n order to whip up
e m i gration to I s rael . The M ao is t s , of cours e , have
copied thi s method from the m , not for the purpose of
m otivating Chinese living abroad to return to their
h o m e l a n d , but rather to intervene u n s c rupulou s l y in
the affairs of other states under the p retext of
protecting " countrymen l i v i n g in foreign lands . "
The Ti beta n s , U i gurs , K az akh s , Mongo l s , and other
related nationa lities who l i v e i n the Peop l e ' s Republic
of China and who consider the m s e l ve s to be Chinese
c itizens bec a m e the first to experience the nationa l ­
ities p o l i c y of Mao and h i s s u c c e s sors . They were
deprived of the opportun ity to p ra c t i c e the ir national

complex of the U S A . . . m e a n i n g of the trea c h e r y help defend Czechos lovakia from

I t i s not difficult to i m a g i n e who
is behind these extre m e " ha w k s , "
when ana logous infantile ideas are
disp layed in such solid p u b l i cations
a s Business Week . . . This m a g a z i n e
r e c e nt l y c a l l e d f o r b u i l d i n g
U . S . foreign pol i c y i n the spirit of
the a bsolutism of the French K i n g
Louis X I V , and t o use A m erican
power to " re-establish leader­
ship . " Closely allied with the " ne w
rightists " is the " Black I nter­
nationa l " of Western E urop e ,
which, through the conservative
L o n d o n D aily Telegrap h, is
counseling Wa s h i ngton to
" increase the use of force . . . "
" The Lesso ns of M u n ich"
" The L essons of History, " b y
Vitalii Korionov, P ravda , Sept. 29 :
. . . . The last four decades have not
only fully disclosed the c l a s s
c o m m i tted at Munich by the Anglo­
French bourgeoi s i e , with the d i re c t
support o f influenti a l monopoly
circles in the USA, but have a l s o
gi ven the peop les the pos s i b i l ity o f
drawing the necessary conclusions
for the m s e l ves . . .
Attempts were made to j ustify
the treachery at M u n i c h by
expressions of " concern for peac e "
i n E urop e. A trem endous threat d i d
indeed hang o v e r the world at that
t i m e . But the Hitlerite aggression
still could have been stop p e d ,
stifled i n its cradle. Th e defense of
Czechoslova k i a , wh ich the Western
powers had treaty o b l i gations to
carry out, provided a real
p os si b i lity for doing thi s . The
Soviet Union, true to its treaty
o b l i gations to Czechos lova k ia and
to its i nternational duty, moved 30
infantry divis ions to its western
border, and placed a i r for c e and
tank units in combat readi n e s s to
fa s c i s t aggres s i o n . However the
A n g l o - F r e n c h rulers preferred
s h a m e f u l c o l l u s i o n w i t h the
aggressor, preferred treachery
and infa m y . Anti-Soviet i s m a n d
a ntic o m m u n i s m turned o u t t o be
stronger t h an reason . . .
The people have drawn the
necessary conc lus ions from the
events of 1 9 3 8 . They a d vocate
general peac e , freedom , a n d
i n d ependence with the fu l l
understanding of whom they c a n
r e l y on and who should be feared . . .
The peop l e rej ect the p o l i c y of
p a n d e r i n g to a g g r e s s i o n a n d
h e g e m o n i s m , n o m atter what
l a b e l s thi s policy may be covered
w ith and no m a tter what part of the
world it may appear i n . . .

Oct . 1 0- 1 6 . 1 978 E X E C U T I V E I N T E L L I G E N C E R EV I E W S O V I ETS 37

c u s t o m s a n d t r a d i t i o n s . t h e i r r e l i g i o u s c ult
observances were forbidden. " elected" leaders of a l l
ra n ks . m o s t of them Chinese-born. we r e simply
installed by the Chine s e .
The suspic ions of some C h i n a experts were j ustified
when they viewed the solution of the national question
inside China a s a test of its national policy according
to an international standard . The Maoists exploited
people ' s national feelings and fabricated their ' fifth
colum n ' in Malaysia. Tha i land . B u r m a . Indonesia and
other countries by means of trick s . bribes and
terroris m . In thi s . these champions of revolutionary
phrases did not base the m s elves on the working-c lass
s ection of the Chinese com m uniti e s . but on their well­
to-do leadership . Peking has not allowed itself to be
e m barassed by bungled j ob s or s candalous revela­
tions . The Maoists are provoking feelings hostile to
China everywhere - wherever there are Chinese
streets. Chinese districts . or Chinese restaurant s .
wherever dishes with exotic d e s criptions s u c h a s
" S nake ala Shanghi" or " Tigers ' Paws a la Peking"
are served . To put it another wa y : the Peking
protectors of the inhabitants o f these streets and
d i stricts do not hide their claw-like paws as a pre­
cautionary measure. but flouri s h them in front of
everyone ' s eyes . in order to drive the 20 m i llion
Chinese li ving abroad into the isolation of the Chinese
ghetto .
To think that every one of them m ust uncon­
ditiona lly be a spy. to think that people in every
Chinese restaurant s erve the i r v i s itors their favorite
d i sh with a microphone hidden i n it - one can be
certain. that a l l this does not please the plain working­
class peopl e of Chinese descent who want to live in
peace with their neighbors .
Therefore. the Maoist s ' policy on 'the national ques­
tion rea lly suits Washington ' s taste. for a s I believe.
the propagandistic uproar for " the protection of the
Chinese living in Vietna m " d i d not acc identa lly
coincide with the rapproac h e m ent between the
P eople ' s Republic of China and the U nited S tates of
A m eric a . In their own countr i e s . the leaders of the
capitalist world solve the national question with
different m ethods than the Peop le ' s R epublic of China
uses. but with s i m i lar results : the total repres s ion of
the national independence of national m i norities (one
should only compare the fate o f the Tibetans
with the fate of the Am erican India n ) . E ven the hostile
sanctions against Vietnam by both the Peop le ' s
R epublic of China a n d the U n ited S tates of A m erica
are identic a l. Peking i s arra nging provocations on the
Chinese-Vietnamese border. and in the m eantime
Washington is extending the legal limit on trading
with the enemy in relation to V i etna m .
And even capitalist countrie s . where chauvi n is m
rears its h e a d. where i m m igrants fro m Asian and
African countri es are considered to be second-c lass
human beings. are happy with the uproar raised by
Peking. For thanks to Peking . which has caused a
situation in which every Chinese c o m m unity is
38 SOVI ETS E X E C U T I V E I N TE L L I G E N C E R E V I E W
considered to be a fifth column of the People' s
Republic o f China . every nationa l com m unity that
lives far from its historical homeland can be accused
of precisely the same thing. White rac i s m is making
itself felt in England. for example. where the
" N�.tional F ront " plots provocations in areas where
there is a colored population . and at the same time
calls upon the whites for " self defense" ( against
whom ? ) .
A l l the peop le in the world today need to be
p rotected against racis m . in whatever costume it may
appear. The Peking claims of influence over people of
Chinese descent. wherever they may live. is not an
internal Chinese question . This i s a further attempt by
Peking to a lienate populations . and first of all the
population of Asia. For Peking wants to succeed in
achieving world leadership through dissension.
- Fjodor Breus
Novosti Political Corresponden t
The m i cro bes of M u n ich
" To expand. deepen and continue the process of
detente " - this is the well-known essence of the
principles laid down at Helsinski . The healthy spirit of
Helsinski has been realized in numerous bilateral
agreem ents concluded over recent months on
exchanges in trade. econom ics and c ulture. and also in
the recent special sess ion of the United Nations
General Assembly on disarm a m ent. which expressed
the will of all peoples to put a stop to the arms race.
The fina l doc um ent of thi s conference. which
incorporated m a n y ideas from the H e l s inski
c onferenc e . emphasized the necess ity of banning the
use of force : of working toward the d yna mic develop­
m ent of d etente . which has expanded into all regions
of the world and all areas of international relations ;
and of the most rapid and complete extension of poli­
tical detente into military detente.
There are still people in thi s world who cannot
stomach the spirit of Helsink i . They remain under the
d a m aging influence of microbes o f an old disease. the
highly resi stant Munich virus . which is known to
thrive on anti-Com muni s m .
Today. the 40th birthday of the conclusion o f the
i g n o m i nious Munich agree m e n t to d i s m e m ber
Czechoslovakia. the damage done by the Munich virus
- which turns up here and there in the policies of the
NATO c ountries and of Maoist China - ha s become
particularly evident.
Just a s at the end of the 1 9 30s the Munich " test of
peace" in the West made one concess ion after another
to the aggressor under the banner of the fight against
the " Bolshevist danger" and " Red Moscow . " and
benevolently watched the preparations for the " D rang
nach Osten" against the Soviet Union. today also there
exist s i m ilar subj ects which c a l l back to m e mory the
sadly wel l-known Munich policy of driving toward a
confrontation with the Soviet Union .
O c t . 1 0- 1 6 . 1 978
 Within the global strategy of a n t i - S o v i e ti s m . the
Munich virus i s p r i m a r i l y I d e n t i fi a b l e b y the m yth of
the " S oviet threat . " Leonid Brezhnev took one such
instance a s the occasion to observe r i gh t l y that every
ti m e the m i l itary adventurers w a n t to conceal the i r
aggre s s i ve intenti o n s . " th e y a l w a y s try to revive the
m yth of the ' Soviet threat : ' they look for evidence of
such a threat in the depths of the I n d i a n Ocean and on
the sum m its of the Cord i l lera s Mounta i n s . I f one
observes the E uropean l o w l a n d s through NATO ' s
binocular s . one can see noth i n g e x c e p t the Sov iet
d i v i s ions ready to spring a g a i n s t the West . "
The Munich virus is a l s o e v i d e n t in Maoist China ' s
regional c l a i m s o n its n e i g h b o r i n g countri e s . J ust a s
Hitler began t o prepare for the G reat W a r b y c l a i m ing
Austrian and Czech territory . s o also have Mao T s e ­
t u n g and h i s s u c c e s s o r s written o n their b a n n e r s o f
hegemon y : " We must c o n q u e r the globe . " and h a v e
undertaken num erous a c t s o f a g g r e s s i o n against
b e expected from a policy o f a i d i n g and abetting
aggressors . To drive out the m i c ro b e s of Munich
forever i s therefore the task o f all those who are
fighting for d etente and the p r e s e r va t i o n of the spirit
of H e l s i nk i i n relations between the states of all
continents .
- Vasily Morosov
Novos ti Military Com m e n ta tor
'"
H i g h l i g hts : Soviets o n Brita i n and Z i o n i sm
J une 22 RED STAR . on the a n n i v e r s a r y o f
H i t l e r ' s i n v a s ion of the S o v i e t U n i o n ,
O p e r a t i o n B a r b a ros s a , w r i t e s : " Th e
c a t a s t ro p h e at D u n k i r k . t h e g o o s e ­
s t e p s o f the fa s c i s t s o l d i e r s a t the
Arche de Triomphe in Paris, the
w i nd o w s o f London s t a r i n g like e m p ­
t y e y e - s o c k e t s - that i s w h a t b e ­
c a m e o f a t t e m p t s b y c e rta i n n e a r - ­

neighboring countr i e s . They are d o i n g so i n the course s i gh t e d politicians to direct the

German a g g r e s s ion to the East.
of preparations for esta b l i s h i n g their d o m ination over
T h o s e w h o m a k e a n a l o g o u s effo r t s
a l l of Asia, and after that. over the entire world . The
to d a y w o u l d d o w e l l to r e m e m b e r
m i litary conflicts provoked over the p a s t years b y the th i s , "
Maoists on their borders with India, Tibet and Jul y - August NEW TIME S , the S o v i e t fo r e i g n c i r­
Vietnam are eloquent testi m o n y to thi s , and show how c u la t ion week l y , runs a s e r i e s or.

the " test of strength " s u c c e e d e d , and how the reaction " Th e M u n i c h T r a g e d y , " q uo t i n g t h e
S o v i e t c h a r g e d ' a ffa i r s i n the U n i t e d
of public opinion was teste d .
S ta t e s i n 1 9 3 8 on B r i t a i n ' s i n f l u e n c e
Maoist China ' s noi s y c a m p a i gn t o " p rotec t " t h e 2 5
over U.S. polic y : " Kenned y , the
m i l lion Huats i a o . t h e p eo p l e of C h i n e s e nationality a m bass ador in London , acting on
living in neighboring countri e s . i s likewise being behalf of the Chamberlain set, has
conducted according to H i t l e r ' s for m u l a of the 1 9 3 0 s . s u c c ee d e d i n p e r s u a d i n g R o o s e v e l t
when h e took t h e S u d eten G e r m a n s " under h i s t h a t G e r m a n y w i l l i n e v i ta b l y t a k e

protection . " a n d r e d u c e d the c i v i l r i ghts t h e y enjoyed action and that Britain is

u n p r e p a r e d ; B u l l i t . who i s a f a s c i s t
in the territory of the C z e c h o s l o v a k R ep u b l i c before
at heart, has ' sold' R oo s e v e l t t h e
Munich.
i d e a t h a t F r a n c e i s w e a k ; t h e A n g lo ­
The Munich " ap p e a s e m ent p o l i c y " i s a l so re m in i ­ p h i l e c l i q u e i n the S t a t e D e p a r t m e n t
s c e n t of t h e way C h i n a i s c u r r e n t l y i nflating i t s e l f with headed b y S u m ner Welles and Dunn
its weapons of hegemony a g a i n s t our country - its have been working on Roosevelt
policy of the " four modernization s . " whose aim i s well "
a lo n g t h e s e s a m e l i n e s . . . .

known to be the rap i d m i l i tari zation of their country Septem ber 1 6 KOMSOMOLSKA Y A PRAVDA. the
youth d a i l y , c h a r g e s " Z i on i s m a n d
and the furthering of the P e k i n g l e a d e r s ' intention to
M a s on r y " w i th c a r r y i n g o u t s u b v e r ­
become a great anti-Soviet p o w e r . s i ve operation s , " gather i n g i n fo r ­
I believe that the m i c ro b e s of M u n i c h can also be m a t i o n . i n f i l t r a t i n g the m s e l v e s i n t o
d i s covered at the C a m p D a v i d talks . where two top l e v e l s of c i v i l i a n p o w e r , t a k i n g

part i c i p ants are d e m a n d i n g ever greater " elasticity" over m i n i stries and unions and even
i n fl u e n c i n g P a r l i a m e n ta r i a n s and
fro m third parties in the solution o f the c o m p l ic ated
Presidents . " Their p u rpo s e : " to
Mideast p roble m . and are t r y i n g to make an
l i berate their devotees from reason,
" a greement" at the expense o f the interests of the a n d to f i g h t a g a i n s t the i n f l u e n c e o f
people of the Arab countr i e s . to n e gotiate concess ions s c i en c e . "
to I s r a e l i a g g r e s s i o n . a n d t o e s t a b l i s h the Septem ber 22 RED STAR c h a r g e s I s r a e l i i n t e l l i ­
" legitimate" right to station A m erican m i l itary gence with " s ubversion and
t e r r or i s t o p e r a t i o n s . . . a i m ed at
contingents and set up m i l itary b a s e s i n the Mideast.
kindling hotbeds of tension in
It i s fa ir to pre s u m e that the M u n i c h-style Israeli­
various r e g i o n s o f the globe, tor­
E g y p t i a n s e p a r a t e a g r e e m e n t o r g a n i z e d by pedoing good-ne i g h b o r l y relations
Wash in gton w i l l be rej ected b y all p e o p l e s of the Arab a m o n g n a t i o n s , a n d c o n ta m i n a t i n g
world and especially b y the Palestinian p eop l e . The t h e p o l i t i c a l a t m o s p h e r e . " " Th e I s ­
p roj ected m i l itary-pol it i c a l p r e s e n c e of the USA in the r a e l i S e c ret S e r v i c e s a l l o c a t e m o r e
zone of conflict can not solve the M i d e a s t problem by m o n e y for e s p i o n a g e a n d s a b o t a g e
o p e r a t i o n s t h a n B r i t i a n , " the p a p e r
peac eful means .
s t a te s .
The results of Munich d e m onstrate c learly what can

O c t . 1 0 - 1 6 . 1 978 E X E C U TI V E I N T E L L I G E N C E R E V I EW S O V I ETS 39

Wh en the i l l u s i o n s of Ca m p
Dav i d fade away
The trilateral agreement at C a m p David has come
up against strong critic i s m from the Soviet public. and
no less from all those who are not so readily wil ling to
be deceived by the nois y p ropaganda around the
" h i storic success . " and who are a b l e to eva luate what
happened from an obj ective standpoint. For there do
exist other Arab countries besides E gypt. countries
who are not indifferent to the fact that the a greem ent
was made behind their back s . There also exists the
P alestinian peop le. whose j ust d e mand for a sovereign
homeland has for all practical purposes been ignored .
And fina lly there also exists the world c o m m unity of
nation s . whose common will concerning ways and
m eans to settle the Mideast conflict has been
expressed in the well-known United Nations decision s .
a n d e s pe c ia l l y in t he resolutions of t he S ec urity
Coun c i l .
These resolutions state unequivoc a l l y that p e a c e i n
t h e Mideast will o n l y be a j ust one if t h e following
conditions are met : ( 1 ) the withdrawal of al l Israeli
troops (and hence also the exclusion of all other forms
of Israeli presenc e ) from a l l o c c upied Arab terri­
torie s : (2) the right of the Palestinian people to self­
determination unt i l an independent state for them is
c reated ; ( 3 ) guarantees for a s e c ure and
independent existence for a l l states of this region .
under conditions of a lasting peac e .
The Camp Davis talks m a y stir u p illus ions i n many
quarters that peace is close at hand. But what kind of
peace can it be when the a greem ents made have put
Arab sovereignty into question more than ever
before ?
I will begin with E g ypt. From the docu m ent entitled
" Fram e work for the Conc lusion of a Peace Treaty
Between E gypt and Isra e l " it can be a s c ertained that
Israel merely " recognizes" E gypt ' s l i m ited sover­
eignty over Sinai. Further talks are to determine
Israel ' s " s ecurity zones " on the peninsula as well as
" zones of lim itation of arms and a r m e d force s " for the
E g yptian army. Israel will begin to pull out its troops
from S inai three to nine months a fter the s igning of a
peace treaty and will finish this in two to three years .
What is noteworthy here is that S a da t a c c epted these
conditions even though Israel had rej ected Sadat ' s
demands for the closing down of I s r a e l i settlem ents on
the S inai peninsula .
S adat. who has partially sacrificed E gypt ' s national
sovereignty , was hardly inclined to remember how
p a s sionately he had previously defended " the most
holy cause of all Arabs. the c au s e of the Palestinian
people . " and had stated that h e would never put his
40 S O V I ETS E X EC U TI V E I N T E L L I G E N C E R E V I E W
s i gnature on an agreement that did not foresee the
Palestinians ' right to self-determ ination . Begin used
Camp David in order to announce loudl y enough for
everyone to hear that Israel does not intend to grant
sovereignty to western Jordan and the Gaza S trip . He
thus blocked any poss i bi l ity of the form ation of an
independent Palestinian state . The vague prom ises to
grant " autonomy" to the Palestinian " residents " of
West Jordan in five years have not the s lightest ·
correspondence with the Arab peop l e ' s demands to
make Palestine into a separate state . At the all-Arab
sum m it conference, with E gypt ' s participation, the
P a lestinian Liberation Organization was recognized
as the sole rightful representative of the Palestinian
people. But the Camp David formula concerning the
Palestinians . likewise drawn up by S adat. gives the
i mpression that there exists no such nation and no
representative of their rights and their lives. In
balance. the fate of Jerusalem was likewise handed
over to Israeli dictates .
It is therefore j ustified to ask the question : why is a
ne w " F ram ework for a S ettlement" necessary when
the only framework corresponding to the demands for
a j ust peace has already been worked out previously?
The ans wer to this i s not to be found in the theatrics
of the concluded talk s . but rather in the political
tendenc ies which led to Camp David in the first place.
The A merican diplom acy of " p artial agreem ents , "
whose aim i s to split the Arab world and to exclude the
Soviet Union from the proc ess of a com prehensive
settlem ent, met up with Cairo ' s readiness to conclude
a separate agreement at any price. Begi n ' s govern­
m e nt and Israeli m i litary c ircles estimated this to be
an opportunity to dictate conditions to E gypt . But i n
doing s o they neglected Israe l ' s own interest i n a real
and j ust peace. which would guarantee I srael ' s
sec urity not by m eans o f a dictate t h e Arabs will not
a c c ept or an agreement made behind their backs, but
rather by means of a demonstration of good will and
the observance of the interests and r i ghts of all those
to whom a settlement guarantees the right to a home,
an independent and secure existence and to peace.
Already now it is symptomatic that i m m ediately
following Camp David Begin and S adat began to give
d i vergent interpretations to the key points of the
agreem ent. The former leader i s set upon firmly
a nchoring his dictate s . the latter upon j ustifying
himself before his own countrym e n . Already now one
can well understand the realistic a l l y thinking people
who see them selves forced to point out the seriousness
of the resulting s ituation and to the new dangers
loom ing on the Mideast horizon . It was therefore no
a c c ident that the E gyptian Foreign Minister Kamel
dec lared his resignation. and that a wave of criticism
and protests is rising a l l over the Arab world .
- Spartak Beglov
Novosti Political Commenta tor
Oc t . 1 0- 1 6 . 1 978
Th e C I A - o n Iy a ca reta ker fo rce
LaRo uch e te lls wh o 's rea lly ben efiting from th e Agen cy's dem ise
Journ a l i sts and others who obvio u s l y have plainly not
learned to add and subtract insist that the U . S . Central
Intelligence Agenc y ( C I A ) i s sti l l today a dark and
devious power in the world . Others s uffering the s a m e
m ental affl iction r u s h a b o u t , i n s i s t i n g upon the
axiom atic authority of U . S . governm ental intelligence
sources in matters ranging from canning prunes to the
sex life of sundry Tibetan monks .
Beginning with Henry A . K i s s inger ' s a s s i gning
J a m e s R. S c h l esinger to p erform the first phase of a
wrecking-job on the C I A back during the Nixon Ad­
m i n i stration , the Agency has undergone succ e s s i ve
savage pink-slipp ing housec leaning s . Added to the
current period ' s wave of ret irem ents of old hands
fro m the OSS and initi a l CIA years , one m a y say that
the Turner purge of Deputy D i rector E. Henry Knoche
and hundreds of oth ers during the sum m er of 1 9 7 7 es­
sent i a l l y finished off the last major independent capa­
b i l ities of the C I A a s a functioning governmental intel­
ligence agenc y .
Ex cept for t h e accum u lation of sub-agents , contract
sourc es , and inform a l connections left over from for­
mer period s , every for mer c a p a b i lity of the Agency
has e ither been eradicated or i s rapidly erod i n g . The
onc e-feared pre m ises at Langley have been degraded
to a laundering-agency for British and Israeli intel­
ligence products run through those premises under the
d i rection of Henry A. K i s s inger, J a m e s R. Schles­
inger, Zbigniew Brzezinski . and anglophile R hodes
scholar and B r i t i sh inte l l i g e n c e ( I nternationa l
Institute for S trategic Stud i e s ) agent Admiral Stans­
fi eld Turner.
Worse than the savage personnel cuts are the supple­
mentary measures e m p loyed to prevent anyone in the
Agency from even thinking i n directions contrary to
c urrent Brzez inski a s s i gn m ents and estim ates . With­
out indica ting the exact method s e m p loyed , it is ac­
curate to state that the internal life of the CIA i s totally
an Orwellian nightmare, w ith very effective methods
of actual thought control reg u l a r l y applied to all e m ­
p loyees .
What has occ urred in this w a y to the C I A character­
izes most of the once-vaunted U . S . inte l ligence estab­
l i sh m e nt, a sickness current l y invading the State De­
partment. The President of the United States com­
mands presently no competent, independent sources
for discovering what is actually occurring in any part
O c t . 1 0 - 1 6 . 1 978 EXECUTIVE I N TELLIG E N C E REVIEW
or the world on any major issue. British intelligence
operatives are in controlling positions within vital as­
pects of U . S . m i litary intel ligenc e , and British and
Zionist agents genera l l y have the run of the premises
inside the most sensitive aspects of government.
Under these c ircumstances a n y foreign government
which attributes a s i gnificant operation to the initia­
tive of the CIA is s i m p l y playing the d a m ned fool. Any
m e m ber of Congress or the p r e s s who gives any
p r i m a-fac ie credence to a confide n t i a l briefing a l leg­
edly based on high-level govern m ental intelligence
sources is playing the foo l . There are, a d m ittedly, still
capable intelligence specialists - and valuable files ­
at C I A , in the Department of Justice, and so forth , but
virtua l l y none of the executives are rocking the boat
currently - they are not even thinking of contradict­
ing Brzezinsk i , K i s s i nger et a I . , and do not wish to gain
pos session of any facts which m i ght i m p e l the m to
think of doing so.
The way it now works
E x e m p lary of what does happen that is c redited to
U . S . intelligence circles is the c a s e of the discredited
R o m a n i a n defector, Ion Pacep a .
T w o p rincip a l facts h a v e c o m e o u t in connection
with that gentle m a n . F irst, he i s not properly speak­
ing a d efector ; he was a n in-p l a c e British spy i n the
R o m a n i a n government, who was p u l led out by the
British for the purpose of playing-back disinform ation
p lanted into him by top circles of the British S ecret
I ntel l i gence S ervice . S econd , intensive investigation
of that British spy ' s fairy-tal e s have establi shed that
every revelation he purported to m ake to Washington,
D . C . and in West Germany w a s a l i e .
A lthough the key British s e wer-outlet for this decep­
tion operation was R obert Mos s , the operation was run
in West G ermany under the Z b i g n i e w Brzezinski labe l .
I n other word s , Brzezinski w a s c a ught red-handed in
a n effort to destabilize the governm e n t of Chancellor
H e l m ut Schmidt, the head of governm ent of a princi­
pal U . S . NATO a l l y !
The final two stra ws which broke the back of the
U . S . governm ent intelligence c a p a b i l ities - those sur­
v ivin g the Turner purge of 1 9 7 7 - were Carter
A d m inistration directives for the Shaba II and Camp
D a v id cases .
The U . S . intelligence com m unity now operates chief-
CO U NT E R I NT E L L I G E N C E 41
l y on hopes of reaching pensionable end-of-servic e ,
m eanwhile avoiding any hint of an intent to
contradict whatever current fanta s y the Carter Ad­
mini stration ( e . g . , Brzezinsk i ) prescribes a s adopted
fac t . The White House, under " S venga l i " Brzezinski ' s
d i rection , declare s , " M y m ind i s m a d e u p ; d o not at­
tempt to confuse m e b y reporting reality . " The intel­
ligence establishm ent gets in line .
E veryone in positions of power throughout the world
- except the U . S . governm ent - knows that the Camp
D a vid proceedings rank with C h a m berlain ' s follies at
Munich as the worst diplomatic fiasco of the 20th
century . Any evidence which contradicts the virtues of
E m p eror Brzezinski ' s C a m p D a v i d " ne w suit of
c lothes " is hysterically avoided or s i m p l y deprecated
a s " s moke screen" or " S oviet p ropaganda" b y the
Administration and its i ntelligence arm s . Menachem
Begin runs Israel, and Moshe D a y a n runs the United
S tate s .
B u t t h e C I A was bad
Admittedly, the CIA has a s m a l l constituency. The
only case in which a form e r C I A operative has been
slapped hard for allegedly lampooning his fonner em­
ployer i s Frank S nepp - and S nepp revealed not a
single C I A secret . The d iffere n c e is that S nepp at­
tacked Henry A. Kissinger in a serious competent
way. F lagrant violater Philip A g e e , who has been in­
volved in setting up CIA operatives for a s s a ssinations ,
walks about quite unprosecuted , while S nepp lan­
guishes under j udgment. The books of various former
intelligence operatives are each filled with hundreds
or thousands of n a m e s . This and that i s " blown" in
batches with each new publishers ' listing cycle. Yet,
only S nepp - who rightly and effectively damned Kis­
s i nger - was placed under onerous j ud g m ent.
One can kick the CIA, urinate on it s e veral times
daily . Such things pour out every day, like rain during
the Bengal monsoon s . As long a s no one does an effec­
tive j ob on Henry A. Kissinger, all such antics have
been generally adm ired .
" B ut, " the argumentative voice p ip e s up , " look at
what the C I A used to do . . . "
As a political historian, and recently advantaged to
discuss relevant matters of warti m e and postwar hist­
or y with persons most advantageously s ituated to
view dark proceedings , I have probably as good a
sense of what the CIA ' s covert operations (and re­
lated) institutions have done as a n yone outside the in­
telligence community proper. I d o not need to be' in­
formed of such matters at this j uncture . What I do
not know in one way or another, I am fully capable of
42 C O U N TE R I N T E L L I G E N C E E X E C U TI V E I N T E L L I G E N C E R E V I E W
assum ing a mong m i ght-have-beens .
The issue is not what the C I A did or did not do. The
i ssue is whether the U S A requires a central intel­
l i gence agency as a source of info r mation bearing on
policy decis ions and as a counterintelligence arm . The
correlated issue is whether qual ified p rofessionals are
required to staff such an intelligence agenc y . The
i s sue is not what the C IA did, but what it should be
doing.
The i s sue was pointed up by the proceedings of a
most-rec ent . Ann Arbor . Michigan conference of
Morton Halperin ' s Comm ittee to S top Governm ent
Spying. The Com m ittee . which is so overlapped with
Philip Agee ' s gang of proterrorists as to be indisting­
ui shable from a terrori st-support group . underscored
its true character by honoring sundry known terror­
ists and their supporters a s the principal sideshow fea­
tures of the KonKlave.
The Halperin effort. c losely intertwined with the
R a lph Nader operations . has been a principal stalking
horse behind such abom inations a s the " Levi Guide­
lines " and the White House ' s own gag-rule against any
U . S . counterinte lligence general surveillance of Brit­
ish. Canadian and I sraeli intelli gence agent s ' (and
a s s a s s ins ' ) deploym ent in the United S tates . The Ha l­
perin-Nader-Agee c a b a l is t h e essence o f t h e wrecking
of the U . S . intelligence c o m m unity begun b y S chles­
inger. and the names and anti c s of Halperin, Nader
and Agee ought to warn a too-credulous public of its
folly in cheering the demise of the " bad C IA . "
Halperin ' s - like Nader ' s - group makes i t clear
that their included purpose. and promi nently so, is to
prevent the people of the United States from enj oying
the s l i ghtest degree of effective intelligenc e-counter­
intelligence protection against the wave of inter­
national terrorism British intelligence warns it is
a bout to unloose in th i s country .
At this moment. even m inor foreign powers have
j ustification for j oining the ranks of those nations who
presently view the U S A ' s intelligence fa c i lities as the
laughingstock of the world. It was not so much Hal­
perin . or Nader. or Agee who did th i s . I t was K i s sin­
ger, S chlesinger. Brzezinski and Turner - with aid
and a s s istance fro m such fore ign powers a s the Brit­
ish government and Zionist agenc i e s .
O h . but were I g i ven a suitable m andate and backing
from Congres s . I would pull together an effective over­
all U . S . intelligence capability within week s . Who .
every conc erned citizen m a y w e l l a s k . w i l l in fact do it
- before it is too late ?
- Lyndon H. L a Rouche. Jr.
O c t . 1 0 - 1 6 . 1 978
D r u g a n d ga m b l i n g cza rs
t i ed to vote t h eft
H o w B ro n fm a n , m o bsters fix Un ite d Sta te s ' e l e ctio n s
U . S . Labor Party investigations into widespread fraud
reported in the primary elections this year have
uncovered a pattern of evidence that the vote fraud
machines in major c ities are controlled by figures
closely assoc iated with organized c r i m e , drug
running� gambling, and laundering of " d irty mone y "
from those activit i e s .
T h e results o f our investigation are presented i n
several c a s e stud i e s , w h i c h show t h e shocking
collus ion of orga nized c r i m e networks , closely
associated with British financ ial interests and their
Zionist allies, in robbing A m erican voters of their
franchi s e .
At the top o f t h e operation , investigation points to
the Canada-based Bronfman fa m i ly of whiskey
magnates whose influence and control over organized
crime dates back to the Prohibition era when they
supplied bootleg liquor to the notorious Purple Gang.
F rom these beginnings , fa m i lies a s soc iated with the
Bronfmans, like the Jacobses in Buffalo and Max
F i sher in Detroit, moved to expand their operations
and political control in the U . S . The Jacobses have
seized control, through a concessions franchise
originally known as E m prise and now called Sport­
Services, of race track s , casinos , and other major
sports operations around the countr y .
I n 1 9 7 1 , after several years of scandals, E mprise
was fina lly ind icted by a Los Angeles grand j ury for an
illegal takeover of a Las Vegas g a m bling casino in 1 96 6 .
Indicted along with E m prise w e r e Anthony J . Zerilli
of Detroit, son of Joseph Zerilli who has been
identified by law enforc e m ent exp erts a s the head of a
Detroit organized c r i m e gang : Michael S . Polizzi of
the G rosse Pointe Valley D i e Cast As soc iation and a
" l ieutena nt" in the D etroit mob : Anthony G iordano of
the S t . Lou is Banana D i stributing Company : Jack
Schapiro, owner of the S i lver S l ipper Casino in Las
Vegas ; and Arthur J. Rooks , a D etroit m unicipal court
j udge .
Most recently, E m p rise-SportServices has been
imp licated in the 1 9 7 6 m urder of Arizona reporter Don
Bo lles .
O c t . 1 0- 1 6 . 1 978 E X E C U T I V E I N T E L L I G E N C E R E V I EW
Detro i t ' s Max Fisher, who h a s c a m ouflaged his
origins som ewhat more effectively, is said by
info r m ed sources to control D etroit d rug distribution,
which is the j ump ing-off point for much of the Midwest
drug traffic .
St. Louis :
In the August primary election in S t . Lou i s , the poli­
tical machine of Democratic Congressman William
Clay was reported to have engaged in blatant fraud
including registering and voting thousands of non­
e x i stent voters from abandoned building s , ballot
stuffi n g , tampering with the printed returns recorded
o n voting m a c h i n e s , r i g g i n g m a c h i n e s , and
threatening voters and candidate s . The c a mpaign of
harassm ent and obstruction of j us t i c e accompanying
the fraud including atte mpting to bribe Clay's
i ndependent Democratic opponent E l sa H i l l , then
threatening to murder her ; interfering with the
influenc ing of j udges ; and c a r r y i n g on persi stent
intim idation and hara s s m ent of U . S . La bor Party
m e m bers and candidate s .
The C l a y machine i s , in fac t , m er e l y a n arm o f S t .
L o u i s organized cri m e a s sociate Morris Shenke r ' s far­
reaching organi zation . Shenker , a n attorney and Las
Vegas casino owner, holds the S t . Louis organized
c r i m e franchise of the Buffalo J acobs fa m i l y which
owns E m prise-SportS ervices . Shenker, who has
repres ented the interests of E m p ri s e and its Mafia
assoc iates in indictm ents stem m in g fro m i l legal
efforts to take over ga m b l ing venture s , is currently
u n d e r i n v e s t i g a t i o n b y the N e v a d a G a m i n g
Com m i s s ion .
Shenker helped rescue W i l l i a m C l a y from a career
of p etty theft and launched his congress ional career
with the ass istance of Harold G i bbon s , St. Louis
Tea m ster bos s . Clay had been e x p e l l e d from college
for il legal gambling, fired a s a bus d r i ver for stea ling
a nd rem oved from an insurance company j ob for
altering the books . Through h i s pos ition on the St.
Louis Law Enforc ement A s s istance Adm ini stration
machine, Shenker authorized funds for Harold
G i b bons and William Clay to establish a para m i l itary
U . S . R E PO R T 43
youth gang organization whi c h has "policed "
elections for Clay sinc e .
M ic h igan :
In th is state in the August third party qual ification
primary. the U . S . Labor Party . which statisticians
proj ect received 30. 000 votes statewide. was officially
cred ited with 525 vote s . After a three and a half-day
hearing documenting thousands of uncounted vote s . a
federal di strict court j udge refused to place the Labor
Party on the ballot. The consp i r ac y to keep Labor
Party candidates off the ballot in Michigan dates back
to 1 9 76 when an unprecedented th ird party quali­
fication primary was established.
Max F i sher. a former Purple G a n g as sociate. in
conj unction with his law firm Cohen. Honigman and
S chwarz. has for years had a financial str.anglehold on
both the Republican and D e m o c ratic parties in
Michigan. F i sher dictates policy for the Republicans ;
his lawyer Avern Cohen dictates policy for the
Democrats . Through these networks F isher placed his
own ma n . Howard McGowan. a d i s b arred lawyer. in a
key position at the State Board of E lection s . It was
McGowan who wrote the third party primary
qualification bill . specifically to keep the Labor Party
off the ballot.
The United Auto Workers and other " m uscle"
linked to drug-pushing and Michigan real estate
speculation. under the thu m b of Max F isher. carried
out the " street level" mobilization for fraud through
their control of boards of election s . F isher permits
U A W local organizations to hold drug-pushing
franchises inside the auto p lants .
Law enforcem ent sources in Michigan say that
F i sher has the unique c om bination of control over
police and prosecutorial apparatus in the state . and
control over local phi lanthrop y to p rovide him with
both i m m unity from prosecution and a number of
impeccable " charities " through which to launder his
funds . The control over police and prosec utorial
operations (Avern Cohen recently b e c a m e head of the
D etroit Police Com m i s sion. for example) also
provides im munity from prosecution for blatant vote
fraud and ongoing hara s s m ent and intim idation of
political candidates and their c a m p a i gn workers .
( The Michigan Labor Party h a s experienced almost
two hundred arrests of its organizers in the last year . )
An exemplary look a t the p rosec utor' s office in
G enesee County. Michigan shows why this i m m unity
exists . There . D istrict Attorne y R obert Leonard. who
has consistently refused to prosecute drug pushers .
has been named in a federal court indictment
c h a r g i n g known Detroit g a n g st e r s . i n c l u d i n g
E mprise-l inked Anthony Zerilli . w i t h attempting to
purge state criminal records so that the gangsters
could be approved by the Nevada G a m ing Board to
take over a casino . Accordi n g to the indictment.
Robert Leonard advised Zerilli and h i s a s s oc iates how
to accomplish the record tamperi n g .
44 U . S . R E PO R T E X E C U T I V E I N T E L L I G E N C E R E V I EW
I n G enesee County. a 1 5 percent sample of computer
votes cast in the recent primary showed that more
'
than 50 percent of the Labor Part y ' s votes had been
left " uncounted . "
N ew York :
The E rie County ( B uffa lo) New York intermeshing of
the vote fraud and organized crime machines is
extremely straightforward ; operations in the rest of
the state are characterized b y only s lightly more
s ubtlety . Organized crime in upstate New York
centers in the Jacobs Brothers ' S port S ervices Inc . The
U . S . Labor Party has definitively i dentified the Jacobs
Brothers as the upstate New York connection in the
Bronfman drug-running operations conducted through
Canada to New York . The Jacobs brothers , in their
e fforts to turn Federal heat off their enterprises, have
been able to go right to the top of the Democratic
Party nationally, retaining the s ervices of Kennedy­
linked Lawrence O ' Brien.
Individuals c onnected to S portServices al� form a
factional core within the Marine Midland Bank, which
has its corporate headquarters in upstate New York,
through such h 6 ldings a s Niagara F rontier S ervices
and F irst Mark Corp . Thi s faction of the bank ' s board
has led the fight for that bank to be taken over by the
B r i t i s h H o n g K o n g a n d S ha n g h a i B a n k i n g
Corporation. for centuries the international bank most
prom inently involved in the drug trade .
In 1 9 7 6 , the Erie County Democrats delivered a
m i n i m u m of 20 , 9 6 1 fraudulent votes for J i m m y Carter
according to docum entation subm itted b y the Labor
Party to federal authorities in New York . This
m a chine is dominated by Joseph Crangle, who utilized
the black poverty apparatus of A rthur E ve in the 1 9 76
fra u d . C rangle and the Jacobs brothers j o ined forces
to carry the election of Daniel Patrick Moynihan to the
U . S . S enate in upstate New York. Moynihan has
r e t u r n e d t h e f a v o r by c h a m p i o n i n g d r u g
decriminalization and legalized gambling for the
state.
On Oct. 5 , 1 9 7 8 , as the Buffalo U . S . Labor Party
m ounted a campaign to expose the drug links of the
Jacobs brothers and to prevent the Hong Kong and
S hanghai Banking Corporation from taking over
Marine Mid land Bank, U . S . Labor P a rty candidate for
Congress Khushro Ghandh i ' s n o m i nating petitions
were challenged b y a man n a m ed Bartkowski.
Bartkowski i s known by politica l sources in Buffa lo as
a hack for Joe Crangle and for Khushro Ghandhi ' s
D e mocratic Party opponent H a n k Nowak.
In 1 9 76 during the early tests of the Carter
Administration Nowa k participated in a national
campaign to get President C a rter to pardon Lewis
Jacobs for an E mprise conviction in a Nevada
gambling case. Nowa k c ited the Jacobs brothers as
" p illars of their communit y " in his letter to the
Department of Justice . The Justice Department re­
j ected a pardon for Jacobs as tota l l y " inappropriate . "
O c t . 1 1 0- 1 6 . 1 978
 A s i m i l a r s urfac ing of the d i r e c t l i n k s between the a n d d i c tates its moves from h i s ho m e . a palatial West­
Bronfman machine and the v o t e fraud apparatus is chester estate . The county' s R epub lican Party is
underway in Westchester County . New York. where a shaped behind the scenes by John Loeb of the Loeb .
cha llenge to the n o m i n a t i n g p e titi o n s of U . S . Labor Rhoades investment bank . A l though nominally a
Party congre s s ional c a n d i d a t e Michael B i l l ington ' s Republican, sourc es in Westchester report that Loeb
no m i nating petitions h a s b e e n upheld by the " b i­ has done everything in h i s power to ins ure the
part i s a n " Board of E lections . Westchester County s u c c e s s f u l e l ec t i o n c a m p a i g n s of B i l l in gton ' s
follows the M i c h i gan m o d e l o f both the R epublican D e m ocratic Party opponent, Congress man Richard
and D e mocratic Parties b e i n g heavily influenced and Ottinger, a longti m e Fabia n . John Loe b is married to
funded through organized c ri m e . I n Westchester the form e r Mrs . E dgar Bronfm a n .
County. Edgar Bronfm an owns the D e m ocratic Party . -Felice Gelman a n d Ba rbara Boyd

How organ ized crime

runs vote fra ud : prel im inary i nvestigation
City Key Co ntroller

ST. LO U I S M o rris Shenker

Investigative H i story Role in Vote-fraud apparat
• O w n e r of several N ev a d a casinos. Defended • ' Go d father ' of the Clay political a p paratus in St.
E m p r i s e and J a c o b s br o the rs as their attorney . Louis , is heavily implicated in vote fraud .
• U n d e r i n v e s t i g a t i o n fo r use of pension monies • Through associates . implicated in the setting u p
f o r o r g a n i z e d c r i m e p u rp o s e s . the L EAA gangs i n St . Louis w h o enforce fraud.

M ICH IGAN M ax Fisher

• A n a s s o c i at e of t h e Purple G ang prohibition • A Fisher-linked Board of Elections o fficial wrote
smuggling o p e rat i o n s . Li n ke d to Bronfman Public Act 94 , Michigan ' s third party primary
o p e rat i o n s t h ro u g h t h i s a n d through prominent law .
ro l e i n t h e Z i o n i s t L o b b y . • Jewish Labor Committee elements are the core
• Th rou g h financ i n g . h e a vil y controls both of the UAW vote fraud machine in Michigan . and
D e m o c ra t i c a n d R e p u b l i c a n parties in Michigan. also the direct link to Fisher.

B U F FA LO , N . Y . M ax a n d J e r ry J a c o b s
• A B ro n f m a n - c o n n e c t e d gan gster family . Their • Through Joseph Crangle , exert control on Erie
c o r p o ra t i o n . " E m prise. " connecte d with County Democratic Party machine .
A r i z o n a m u rd e r of re p o rt e r Don Bolles . Morris • Democratic Party ties include former party
S h e n ke r often works for t h e m . chairman Lawrence O ' Brien.
• Im plicated in effort by ally. Nowak , to throw his
o pponent Ghandhi ( U .S . La bor Party) off ballot .

WESTC H ESTE R CO . , N . Y . E d g a r B ro n f m a n , J o h n Lo e b
Bronfman

• S e n i o r m e m b e r of t h e B ro n f m a n family. • The county 's bi- partisan Board of Elections

• U n d e r i n v e s t i g a t i o n m a n y times for organized challenged U .S . Labor Party ' s candidate
c r i m e l i n k s and o t h e r i l l e g a l activities. Billington .
• E x t re m e l y p o w e rf u l in Democratic Party .
Loeb
• Co n t ro l s R e p u b l i c a n P a rt y .
• M a r r i e d t o t h e f o r m e r M rs . Edgar Bronfman .

Oc t . 1 0 - 1 6 . 1 9 78 E X E C U TI V E I N T E L L I G E N C E R E V I E W U . S . R E PO R T 45
Drugs and wa r : Edga r Bronfman v i ews th e wo rld
A wide-ran g in g interview with th e Sea g ram 's boss
Liquor and banking magn a te Edgar Bronfman
recently proposed U. S. legalization of marijuana as an
"ad van tageous " basis for a new "com mon marke t "
bet ween Canada , the U. S. , and Mexico. His remarks
were contained in a post-Camp Da vid interview tha t
was recently made a vailable to the E x ecutive Intelli­
gence R eview. Seagram s Cha irman Bronfman,
lea ding figure in the British -tied net works of the
Zionist Lobby, is the a u thor of the "Middle East
Trea ty Organiza tion " proposal for the Mideast, and in
the intervie w he detailed his economic, military, and
diploma tic grand stra tegy.
Question : You ' ve been partic ularly active in
connection with recent Middle East developmen ts.
You 're also identified interna tionally as one of the
spokesm en for a policy of a Middle Ea st Trea ty
Organiza tion .
Bronfman : Y e s , I wrote an artic le about it. It
appeared on the op-ed page of the Ne w York Tim es.
Q: Do you see Camp Da vid as lea ding toward such a
de velopmen t ?
Bronfman : When I wrote the article I h a d n o idea that
Camp David was even going to take place and what
the results would be. It j ust s ee m s that long term it
j ust has to be in Am erica ' s intere st and the free
world ' s to make sure that the R u s s ians don ' t get their
hands on that oil. You can talk about nuclear bombs,
S A LT, who has more capacity to d estroy the other, but
the ballga m e ' s over pretty quickly if we c a n ' t get Arab
o i l . E ither to Japan or to West E urope or to the United
States and Canada . Somehow m a k i n g that region (the
Middle East-ed .) solid has to be an American
i mperative . It seems to m e that it has to be an
i m perative for a lot of the so-called m oderate Arabs
too , because I j ust can ' t conceive of the Saudis being
a n ything but what they are about C o m m unism , the
Russians . . . which i s paranoid . I would guess that the
Shah of Iran i s maybe more so, m a ybe less so, but also
paranoid about the R u s s ians . S adat has tried working
with the Russians and it didn ' t work . E vidently their
price was too high , too steep for econo m i c aid and
cooperation . I think probably the s a m e thing is t r ue
for Assad in S yria. I think i t ' s to the interest of the
Western World to try to get some peace, some stability
i n Lebanon , a place where so many people are being
killed . The one problem which w e really have not
solved is what we do with all the refugees , the
displaced Palestinians . Because nobody really seems
to want them .
Now a s far a s Camp David ' s concerned, I think it
went fairly far . . . if it stays glued together and I have
46 U . S . R E P O RT E X E C U T I V E I N T E L L I G E N C E R E V I EW
my very deep concerns about tha t . Begin is playing a
very strange role , saying things like he ' s not going to
vote for dismantling the S inai settlem ents . . . in the
Knesset everybod y ' s free to do what they want to. Now
I can understand why he would want to make every­
body independent and free to vote any way they want
to, s o that it doesn ' t become a party issue or a vote of
no confidence, but why he should announce that he' s
going to vote against it. . . vote against his own
agreement. . . . The thing that disturbs m e about
Begin is that if it falls apart nobody ' s ever going to
blame the American Administration . . . they come out
s m elling like a rose no matter what happens . . .
Carter and Vance did an unbelievable j o b . If it comes
apart it wasn ' t their doing . . . it will be because of
som ething Sadat does or does not do or something
Begin does or does not do. If Begin plays his cards
carefully, then the pressure ' s all on S adat. But I don ' t
see that Begin ' s going t o p l a y his cards carefully
because I'm not so sure that in his heart of hearts he
doesn ' t really believe that Judea and S a m aria belong
to Israel even though what Israel would do with
another m i llion Arabs demographically . . . bewilders
me.
Q : In the Canadian Je wish News i t was an ticipa ted
tha t China would be playing an interesting role on
behalf of Isra el. Has this been a fa ctor ?
Bronfman : I don ' t think so, up to now . But China is
changing very rapidly. China a s you know has been
very anti-Israel for some ti m e . But this new
regi m e . . . there ' s been a different kind of an
outreach. I happen to be an officer of the World Jewish
Congress . . . of which the Canadian Jewish Congress
i s a key part. . . and we have s o m e feelings that it
would not be impossible for a J e wish group as a
Jewish group to visit China in the not too distant
future . And that Red China i s going to play some sort
of a role . Of course the role the Chinese a l ways play is
whatever will get the Russians m a d . It's very
predictable. If meddling on the side of Israel will
irritate the Russ ians , then they ' l l probably do it. But
that ' s not c lear yet I don ' t thi n k .
Q : Wha t do you anticipa te in term s of European
response to Camp Da vid? The Europeans ha ve been
playing a ma verick role in se veral area s.
Bronfman : Well the F rench are a lways a bit of
m ischief makers aren ' t the y . They won ' t have too
m uch trouble with the English, the Germans still feel
guilt that we ' ve made them feel a l l these years , but
the French are troub lem akers . I really think that the
United States and I hope Canada w i l l have to pursue
Oct. 1 0- 1 6 , 1 978
the i r own role d i re c t l y in the M i d d l e E a s t and not
rea l l y count on the European E co no m ic C o m m un i t y to
be i n volved . Some two years ago t h e r e was a big battle
going on i n this country which was eventually more or
l e s s won on the q u e s t i o n o f the Arab boycott against
J e w i s h firms . . . but we ' ve never b e e n a b l e to get any
a n t i boycott l e g i s l a t i o n i n the E E C . and it ' s b e c a u s e of
the F rench . . . .
Q : Getting back to the Soviet question. Sen. Fra nk
Church (D-Id ) , I believe, ma de a statement ear/ier
this week referring to a G rand AlJiance, something
that would materially a ffect the balance of power
between East a nd West. How is that likely to develop ?
Bronfman: I think the first t h i n g you have to have i s
p e a c e trea t i e s b e t w e e n I s r a e l a n d i t s n e i ghbor s . Once
you have a peace treaty b e t w ee n I s ra e l and Egypt,
Jordan has to c o m e along a n d S yr i a e ventua l l y .
There ' s no way S yria ' s g o i n g to a t t a c k I s r a e l w i thout
the Egyptians and Jorda n i a n s h e l p i n g the m . That ' s
the f i r s t step . The s e c o n d s t e p i s s o m e kind of
econom i c p l a n n i n g i n the reg i o n . The third step i s a
k i n d of c o m m o n m a rket where you have no tariff
barriers and have created a n e c o no m i c u n i t .
Q : Within the Middle East ?
Bronfma n: W i t h i n the M i d d l e E a s t . These steps take
place slowly and th en I th i n k s o m e kind of m i l itary
a l l i a n c e i s pos s i b le .
Q. Th is is something that's being discussed in terms of
North A merica a lso, I think, the mention of a common
market.
Bronfma n : Well I ' m a l w a y s for i t . A n y kind of equal
tra d e . Trade i s a n e s s e n t i a l ingredient i n the Middle
East. J u s t the s i m p le fa c t that you don ' t want to bomb
a country where you h a v e your o w n factories . . . and
people get to know e a c h other a s well through trad e .
and w h e n t h e y g e t to k n o w e a c h other t h e y don ' t hate
each oth er . . . . That ' s true o n this side too .
As far as the energy b i l l i s c o n c erned . Americans ,
for reasons which are very d iffi c u lt to understan d , are
Oc t . 1 0 - 1 6 . 1 978 EXECU TIVE INTELLLlG E N C E REVIEW
s t i l l l i v i n g a s i f energy w e r e c h e a p . E nergy is very
e x p e n s i v e . W e ' v e got to m a k e peop l e conservatives on
e n e r g y . The o n l y way to m a k e p e o p l e conserve is to
get the p r i c e up . Peop l e are not g o i n g to i n s u late their
h o m e s and start u s i n g s m a l l c a r s a n d do all the things
that are n e c e s s a r y to s a v e fue l if i t ' s not going to be
e x p e n s i v e . The reason it ' s a p o l i t i c a l hot potato is that
unfortunat e l y the m a j o r i t y of A m e r i c a n s don ' t believe
there ' s an energy shorta g e . T h e y a l s o don ' t believe
that i t should be e x p e n s i v e ; they think the oil
c o m p a n i e s are gou g i n g the m , w h i c h i s n ' t true .
What th e y don ' t s e e m to r e a l i z e i s what ' s happening
to the U . S . dollar a s a r e s u l t o f our wasting energy.
Our b a l a n c e of p a y m ents d e fi c i t is gro w ing at an
a b o m i na b l e rate . and there ' s no w a y out of this unless
we s t a rt to conserve energy . Our b a l a n c e of pa ym ents
is I th i n k p o s i t i v e $ 8 b i l l ion w i thout e n e r g y , but after
e n e r g y i t ' s a m i nus $40 b i l l ion . . . .
Q : I kno w one of your continuing interests is Canada
even though you've been a U. S . citizen for some time.
There is some discussion of expanded Canadian trade
relations with the U. S. which would probably become
importa nt in terms of the energy program here. I
kno w Felix Rohatyn has used the term common
market between the U. S. , Canada and Mexico. Is this
something that you're fami/iar with ?
Bronfma n: I ' m not r e a l l y v e r y fa m i li a r with it.
Intellectually I ' m for i t . But I t h i n k i t ' s kind of a long
w a y off. It would be very a d va n t a g e o u s for Mexico, of
cours e , if we would l e g a l i z e m a r i j uana . Certainly
between Canada a n d the U n i t e d States to have a
c o m m o n m a rket would be a m a rv e l o u s thing. Before
B r i t a i n j oi n e d the C o m m o n M a r k e t in E urop e , I used
to e n v i s ion that it would be g r e a t to have a com mon
m a rket of the United State s , B r i t a i n and C a nada as
w e l l as Australia - that k i n d of th i n g , but I really
h a v e n ' t followed th i s c l o s e l y enough to know what the
p o l i t i c a l r e a l i t i e s are at the p r e s e n t t i m e . And I also
d on ' t know how Mr. L e v e s q u e w o u l d react to the
que stion !
U . S . R E PO R T 47
How Zionist s orch e st rate
Preparations for terror today, and th e dirty h istory
The Medford E vans article, " Th e People of Moses
R eturn To The R ight , " in the S eptember 1 9 78 issue of
the John Birch Societ y ' s Am erican Opinion, is to be
viewed as a highly significant signal for acceleration
of " right-wing"-profiled terrorist preparations in the
United State s . The leadership of the Birch Society i s
performing a k e y part of t h e political deploym ent in
support of such terrorist preparation s .
Birchite Congressman Larry M c Donald (D-Ga.) i s
a l so pro m inent in thi s , a s are the S helton branch o f the
Ku Klux Klan, the G lenn Turner-M i n uteman dePugh
" Ten Million" operation, and the spokesman for the
fascist international i n the U . S . , Z arapeth, N . J . ' s
Frank Cappel . O f spec ial interest i n the case of
Congressman McDonald i s a key a i d e , John H. Rees, a
British operative with a long and dirty intelligence
pedigree .
As an aid to intelligence specialists faced with the
accelerating threat of terroris m , Paul Goldstein has
In this section
T h e Minutemen a n d K u K l u x K la n networks that
sowed violence in the 1 9 60 s are b e i n g retooled for
renewed right-wing profi led terrori s m in the
U nited S tates today . Our Terroris m section
pulls together the story in three parts : U. S .
Labor Party Chairman and Contributing E ditor
Lyndon H . LaRouche discusses the key signs
pointing to the regroupm ent of right-wing
terrorist elements around the Ku K lux Klan and
John Birch Society , and dissects the broader
British mob, and Zionist t e r r o r i s t networks
i n vo l ved . Mi litary S trate g y e d i t o r P a u l
Goldstein, also codirector of t h e U . S . Labor
Party Security Staff, reports on the shocking
history of Z ionist and British network s ' role in
creating and sustaining the Klan i n the 1 9th and
early 20th centuries. And Scott Thompson, a
leading spec ialist on r i ght- w i n g terror ist
organizations , concludes the s ection with a
report on the Klan and Minutemen terrorist
networks today, and who ' s running the m .
48 TERRORISM E X E C U TIV E I N TE L L I G E N C E R E V I E W
p repared the accompanying condensed background
profile on the long history to date of creation and con­
trol of the Klan by B ' nai B ' rith conduits of the British­
Canadian intelligence service. It i s notable that much
of Goldstein ' s information was developed from docu­
m ented sources dealing principally with the British
assass ination of President Abraham Lincoln .
Goldstein ' s background-profile aids the intelligence
officer in getting directly at two vital points of
investigations and counter-measures : ( 1 ) who con­
trols the Klan ' s terrorist and terrorist-supporting
capabilities at present : (2) what the historically
demonstrated capabilities and vulnerabilities of Klan
terroris m are.
Exemplary is the fact that the original K lan was
created as a resurrection of the K nights of the Golden
Circle, and that the creation was made by Judah Ben­
j a m i n , Bernard Baruch ' s grandfather, and a Catholic
priest. Both Benj a min and Baruch were linked to top
circles of B ' nai B ' rith and were leading U . S . agents of
N . M . Rothschilds and Sons of London. The latter was,
i n turn, an agency of those Jesuit networks which, in
c ooperation with the Knights of the Golden Circle, per­
formed the main supporting role in the assass ination
of Lincoln.
Note also that the 1 9 1 5 resurrection of the Klan was
effected b y individuals of the same political creden­
tia l s . A lthough the target of Klan terrorist activities
was usually black Americans , the purpose of the
terror was to prevent southern Whig forc es from gain­
ing a foothold on policy-making in the former Confed­
erate states - up into the 1 930s !
The Birch turn
The article by Medford E vans , a leader of the 1 9 60s­
era " White Citizens ' Counc i l s , " dovetails. prec isely
with the present-day control of the She lton Klan. That
dovetailing is not the primary significance of the
E vans article, but is a necessary by-product. The
primary significance of the E vans article is the
launching of a propaganda c a m pa i gn to condition
Birchers and fraternal right c ircles to acc eptance of
an unconcealable alliance of the B irch leadership with
the Bronfman interests and E d m ond de Rothschild of
France - both key links in the Z ionist lobby forces
O c t . 1 0- 1 6 , 1 978
--------�)
KKK t e r ro r
beh ind it
behind proj ected " right- w i n g " terror i s m i n the U . S .
Intell igence officers should b e warned o f the
i m p l i c ations of such connection s . The key agency
behind the proj ected involv e m ent of K la n e l e m ents in
terrorism i s the same agency that coordinates all
international terror i s m ( p ro p e r l y s o termed) today :
the I sraeli Mossad.
Th i s m eans the s a m e network which k i l led a news­
paperman investigating J a c ob s ' s connections in
Phoen i x , Ari z . It means the U . S . - C a ribbean " Mafia , "
which doveta i l s into c a s ino and other sports opera­
tions in the U . S . toda y . I t m e a n s the i nternational
illegal drug network s . I t m ea n s the f i n a n c i a l networks
of Mossad ' s Tibor Rosenba u m . I t m ea n s the Bronf­
man-funded organizations that Attorney J i m Garrison
investigated in connection w ith the conspiracy to
assassinate President John F . K e n n e d y .
These a r e overa l l t h e s a m e p o l i t i c a l and financial
interests that have taken direction of the John Birch
Society on behalf of the British i n t e l l i gence networks ,
the networks that c reated the B i r c h S o c i e t y for deploy­
m ent against President E i s e n ho w e r . I t a l so m eans
conta m inated elem ents of the U . S . intell igence and
security organi zation s , including i nfluence p layed into
those agenc ies through large p r i vate intelligence
agencies owned by associates o f S w i s s -based Tibor
Rosenbaum ' s operation s .
I t m eans that it is i m p o s s i b l e t o neutralize combined
" right" and " left " terrori s m in the U . S . without expel­
ling the Mossad and crushing the Z i o n i s t lobby at the
top level s . and also conducting the c ra c kdown on top
illegal-drug and organized- c r i m e networks that no
U . S . Administration has dared to u n dertake to date .
What Eva n s wrote - a n d wh y
E v a n s ' s art i c l e begins on p a g e 2 3 of the S � ptember
issue of American Opinion, wandering through pages
of cautious conditioning of the reader b e fore getting to
the meat of his argument b e g i n n i n g on page 3 1 . A
s a m p l ing of excerpted p a s s a g e s from that point
onward identifies the content and m echan i s m s of his
principal efforts :
Oct. 1 0- 1 6 . 1 978 E X EC U T I V E I N T E L L I G E N C E R EV I E W
. . . i n Lebanon the Chri s t i a n s are identified with
the R i ght. the Mos l e m s w ith the Left . . .
second , . . . the J e w s h a v e supported the
R i ghtwing Christians a g a i n s t the Leftwing
Mos l e m s of both S yria and L e b a non itself. Y o u ' d
t h i n k C h r i s t i a n Conservat i v e s in A m er i c a would
be concerned about thi s , but for the most p a rt they
seem j ust bored by it. ( p . 3 1 )
This i s s i m p l y a l i e . A m aj ority o f Lebanese Maronite
Christians have depended on S yr i a n forces to protect
them from the Falange. a Nazi organization c reated
b y the Nazi Party of G e r m a n y during the 1 9 30s and
headed toda y by Hitler-ad m irer and H i tler-appointee
P i erre G a m a y e l . However. E va n s ' s l i e s have their
purpose .
E vans proceeds to condition h i s reader to the
British-Z ion ist link :
Like other J e w i s h custo m s . the practice of getting
a gifted son to the top of a host governm ent has
been seen in modern t i m e s . B e nj a m i n D i sraeli
served the British well, a n d gave the title
E m press to Queen V i c toria a s a present. No
empire has done more than the British Empire to
benefit an ungrateful world. ( e m p h a s i s added ;
p . 32)
With some intervening r e v i e w of a l leged or mooted­
as-pos s i b l e past J e w i s h error s , E va n s p roc eeds to his
s u m mary argum ents :
Over the whole course of h i s to r y , J e w s m ust be
regarded as the most conservative of peop l e s , for
no other people ( today not e v e n the Chinese) have
kept the same traditions s o long . . . . They now
have no choice but to turn R i gh t . Or, it would be
more acc urate to s a y , return to the R i ght, their
historic pos ition . ( p . 3 6 )
T h e n , fina l l y , t h e s u m m ation of t h e political dogma
d ished out to the credulous B i rc h e r s :
. . . what are those enormous c o n s e q uences which
I said a t the outset of this a rt i c l e m ight come from
the J e w is h return to the R i gh t ? The immediate
specific is the defeat of the Carter Administration.
In Carter. J e w s fe l l for a w i l y Christian . Now , they
surely know better . A broad e r field i s one in
which the Jews have c o m m anding influenc e :
enterta i n m ent - the m o v i e s s t i l l , but nowadays
TERRORISM 49
 televis ion even m ore . The p re s s , too , of course,
and the academ ic world, which i s influenced by
the virtual s ynonym ity i n recent years of the
words " intellectua l " and " J e w . " If the networks
and Holl ywood and the " N e w York T i m e s " and
the " Wa shington Post" and Harvard and M . I . T.
should follow the Jews and turn R ight, the arrest
of Soviet expansion would b e a s s ured, and the
lamp of Li berty would continue for the forseeable
future to enlighten the worl d . ( e mphasis added ;
ita lics in original rep laced by quotation-m ark set­
offs ; p. 36)
E vans ' s other re marks , as well as the way in which
he argues the c ited point s , are shaped to inform the
Bircher that it is not proposed that the Bircher love
J e w s , but that he enter into a tactical a l l iance with the
" powerful " Jewish control over - it s e e m s - about
everything, solely for the sake of winning Ye Goode
Olde CDlde Warre . E vans e m ulates the sort of
argum ents the liberal press used during World War II
in behalf of the U . S . -Soviet a l l i a nc e . He perm its the
B ircher to keep his old grievances against the
Rothschild s , but, for the present, only privately
( " among j ust us folks " ) , to not love " U ncle
Menachem , " but to at least trust Begin ' s reliable
right-wing instincts . It 's all for the good of the cause.
This sort of innoculation of B irchers is made
necessary by the accelerating exposure of the Mossad
and allied forc e s ' responsi b i l i t y , a s a gents of the
British E mpire-Loyalist c i rc l e s . for coordinating
international terroris m , for coordinating a m aj or part
of the British-Canadian control of the i l lega l-drug
traffi c . for control of organized c r i m e . I t ' s all for the
good of the cause. E vans insists .
Those of us who have done in-depth studies of the
John Birch Society know that the publication of s uch
an article in Am erican Opinion ten years a go would
have led quickl y to the author ' s early. unpleasant
d e m i s e . Just a s in the c a s e of S enator Joseph
McC arth y ' s campaign s , B ' na i B ' rith-linked forces
m a y be controlling the operation from behind the
scene s , as they have in fact controlled the Birch
Society, but it was not prudent to c a l l attention to the
fact in certain " right-wing " c i rc l e s . E ven today, the
mere publication of E vans ' s arti c l e represents a sharp
political turn by the Birchers , a turn that involves a
very considerable risk to the stabi lity of the
organization .
By itself such an articl e ' s publication would s ignal a
push from behind the scenes for som e purpose
i m portant enough to hazard this d egree of risk. We do
not rely on merely such circum stantial inform ation .
We have other , more direct w ays of knowing what
strings are being pulled a m on g c ircles allied
politica l l y to McDonald and S h e l ton , who is pulling
the m , and to what purpo s e . The publ ication of the
E vans piec e , taken in that context , signals a certain
degree of maturity in on-going p reparations for the
p roj ected wave of " right-wing" terrori s m .
- L yndon H . L a Rouche. Jr.
50 TERRORISM E X E C U TI V E I N T E L L I G E N C E R E V I E W
Th e Rothsc h i I d roots
The political evolution o f the Knights o f the K u Klux
K lan was a direct outcome of policies initiated during
the first half of the 1 9th century by the British
aristocracy and their " court Jews , the Rothschilds .
The combined capabilities of the key secret societies
controlled by these circles - the Scottish Rite of
Freemasonry, the B ' nai B ' rith (Order of the Sons of
the Covenant ) , and the Jesuits ( S oc iety of Jesus) -
allowed the British and allied Black Guelph c ircles to
nearly destroy the foundations of the United States
republic through assassinations ( inc luding that of
Abraham Lincoln) , terrorist operations, and general
subversive activity culm inating in the War Between
The S tate s .
T h e starting point for unraveling this vast
consp iratorial apparatus i s the Knights of the Golden
Circle.
The Knights of the Golden Circle com bined the
network of individuals associated directly with the
S cottish R ite of Freemasonry, B ' na i B ' rith, and the
Jesuits . Practically the entire Confederate leadership
belonged to the KGC at the point of the secessionist
c r i s i s in 1 860. It i s through tracing the l ineage of the
K G C that the K u K l ux K l a n b e c o m e s an
understandable phenomenon .
However, to make fully comprehensible the
s ignificance of the combined relationship of these
sec ret societies , a short historical backdrop is first
necessary .
Prior to and during the American R evolutionary
War, and s ignificantly afterwards , the British
initiated an intens ive subversion effort aimed at tak­
ing over and destroying the Franklin-organized
F r e e m a s o n networks that f u n c t i o n e d as the
organizing body for the revolution . The explicit
c o u n t e r o p e r a t i o n was the S c o t t i s h R i t e of
Freemasonry, under the control of the British-Black
G u e lph-Knights of Malta organizatio n . It was because
of thi s effort that many of the indi viduals who served
the British in the KGC were also m e m bers of the
S cottish Rite.
It i s equally significant that the abolitionist societies
of New England, as well a s the entire secessionist
states ' rights movement, were all financed and
basically controlled through the R othschild- Baring
bankers of the British monarch y .
T h i s political intelligence profi le w i l l concentrate on
the c losely connected evolution of three secret
organizations : the Knights of the G olden Circle, the
B ' na i B 'rith, and the Ku Klux K l a n .
O c t . 1 0- 1 6 . 1 978
of t h e Ku K I u x K l a n
1 . The K n ights of the G old e n Ci rcle
" I hear a good deal about the a s sociation c a lled the
Knights of the Golden C i r c l e , a Protestant a s soc iation
for securing the Gulf prov i n c e s a n d state s . including
wh ich has been largely developed b y recent t i m e s . . .
in the S outhern confede r a c y . a n d c reating them i nto
an independent govern m ent . "
The above is taken from W i l l i a m Howard R ussell ' s
book My Diary North and South, written in 1 866 by the
London Times war correspondent . R u s s e l l had gotten
this a s s i gn m ent at a m e e t i n g o n May 5, 1 86 1 with
Confederate leader G eneral P i e rre Beauregard , a
leader of the K G C . R u s s e l l h i m s e l f was serving his
Queen a s a top British S ecret I n t e l l i gence Service
agent. profi ling the 1861 crisis s ituation in the United
States and reporting back to the Rothschild owner of
the London Tim es. ( 1)
Orig inating out of the 1 828-32 N u l l i fi c ation Cris i s , the
KGC was not offi c i a l l y e s t a b l i s h e d until 1 8 54 under the
direction of Dr. George W i l l i a m L a m b Bickley.
Bickley had been trained i n Bota n y a t the U n i versity
of London in the 1 840s , then redeployed back into the
U.S.
Prior t o the offi c i a l surfa c i n g o f the KG C . however,
the Southern Rights Clubs were e s t a b l i s hed during the
height of Andrew Jackson ' s presidency. Their
structure was identical w i th that of the southern
branch of the Scott i s h R ite of F r e e m a sonry with its
p r i m e political foc us centered on a three-point
progra m . As stated in the K G C ' s m a n u a l , the three
points were :
( 1 ) Reestablish the sla ve trade ;
( 2 ) Acquire new slave territory ;
( 3 ) De stroy the U . S . Constitution a s a " tyrann ical
doc ument. "
Two of the leaders of the S R C were R obert Toombs
and William Landes Yancey. E ac h was to play a
s i gnificant role in the Confederate govern ment .
Too m b s . a so-called Southern W h i g , was personally
1 . Doc u m entation of the K G C ' s a c t i v i t y i s q u i te extens i v e .
M o s t of the i nfor m a t i o n i n t h i s report c o m e s f r o m p r i m a r y
s o u r c e s of the p e r i o d . P a rt i c u l a r l y u s e f u l w e r e :
P u m fr e y . J i m . An a u th en tic exposition of th e Knigh ts of
the Golden Cire/e. or a History of th e Secession . by a for m e r
m e m ber ( I nd i a napol i s . 1 86 1 ) .
P i t t m a n , B e n . ed . . The Indianapolis Treason Tria l of 1 865
( c o u rt t r a n s c r i p t on the c o n s p i r a c y b y the Sons of L i berty. a
later form of the K G C in I l l i no i s . I n d i a n a . a n d O h io ) .
H o l t . J o s e p h . An Officia l R eport : A Western Conspira cy in
A id of th e Southern R ebe//ion. by Judge A d voca te Joseph
Holt.
O c t . 1 0- 1 6 . 1 978 E X E C U T I V E I N T E L L I G E N C E R E V I EW
respon s i b l e for financing s e v e r a l attempts to kidnap
Africans and bring them to the S outh . S i gnificantly .
the S R C s served British inte l l i g e n c e by providing a
functioning p o l i t i c a l i nfra s t r u c ture for the
s e c e s s ionist movem ent and f o r the c reation of other
secret soc ieties .
Two of the m a i n centers of the S R C . and later the
K n i ghts of the Golden C i r c l e . were New Orleans and
Charleston . S . C . S ecret orders s u c h as the Order of the
Lone S tar were also set uP . then later m erged directly
into the K G C . Key i n organ i z i n g the N e w Orleans
operations was Judah P. Benj a m i n . later to be the
S ecretary of S tate of the Confede r a c y . of whom more
below.
In 1 85 4 . B i c k l e y s urfa c e d w i t h the orga n i zation
known a s the K n i ghts of the G o l d e n C i r c l e . Under the
banner of creating a " D e mocratic Monarchy i n North
A m erica . " its first operation was to organize
p a ra m i l itary terror i s m in Central A m e r i c a . Mexico.
and C u b a . the purpose of w h i c h w a s to insti gate a war
between the U . S . and Spain. O n e of its most succes sful
early ventures was under the d i r e ction of W i l l i a m
Walker. who organized a m i l i t a r y coup in Nicaragua
in 1 85 5 .
T h e n e x t phase of t h e K G C ' s a c t i v i t y was to organize
a m i litary coup in the U . S . b e fore Lincoln could be
ina ugurated. The KGC w a s u s e d p r i m ar i l y a s the
main terror force to ensure that the key Southern
states voted for secess ion . Its stated orga n i zational
purpose indicates the extent of its i ntentions at the
time of the 1 860 election of L i n c o l n :
( 1 ) S ecure a l l U . S . arsena l s ;
( 2 ) S a botage reconc iliation between North and
S outh ;
( 3 ) Conc entrate on the border s t a te s :
( a ) coerce state legis latures or governors i nto
voting for secess ion ;
( b ) elect legis lators to vote for s e c e s s ion ;
( c ) bring armed m e n from the c otton states :
( 4 ) S et up Knights of the Safety G u a rd s . watch over
men who are doubtful about s e c e s s i o n ;
( 5 ) Organize guerrilla bands to h a r a s s union troop s .
under the direction o f the K n i g h t s G a l lant. the elite
corps within the Kni ghts ;
( 6 ) Northern m e m bers were i n s tructed to play
" h ypocrite rol e s " b y loud l y supporting Un ion efforts
in order to act as s p i e s ;
( 7 ) R a i s e m i litias in the North . turn a r m s over to the
S outh . and send Confederate l a d i e s to spy i n the
North ;
( 8 ) A s s a s s i nation and terror.
" In short . the intention of the s e c e s s i o n i s t i s to have
TERRORISM 51
a more powerful monarchy than E n g la nd . " a ccording Genera l . then S ecretary of War. and last and most
to KGC member Jim Pumfre y . (2) i mportant, Secretary of State .
The belief structure of the KGC was the following. The plot to destroy the Union remained the foremost
Its symbols were the glowing sun and 15 stars theme of Benj a m i n ' s activity. Centra l to the
e m blazened on a crescent. with a triangle with the insurrections to be run in the North and in the border
numbers 3 . 7 and 5 placed in each anglE' with R-61 in the states was the Confederate espionage operation
m iddle of the triangle. The R m e a nt ' revolution , ' and functioning in Canada , with its headquarters in
the 6 1 meant 1 8 6 1 . in other words . R e volution i n 1 86 1 . Montreal . Not coincidentally. the hotel in Montreal .
Meetings took place in " c a stles " or lodge s . which St. L a w r e n c e H a l l . t h a t h e a d q u a r t e r e d the
were organized on the loc a l . state . and national leve l . Confederate Secret S ervice also was the headquarters
On the state level they were referred to as " G rand of the British military mission.
State Castles , " with a delegate body .sent to the The head of Confederate espionage was Jacob
" G rand United States Castle" or " American Legion . " Thompson. a former Secretary of the Interior under
In its organizational hierarchy. a s reported b y the B uchanan and a member of the KGC . Through
Da ily Louis ville Democra t in 1 86 1 . the KGC was Thompson and another top British operative operating
divided into three degrees or leve l s . The first degree in Canada named George Sander s . the plan to
was the Foreign and Home Guard s . the second degree assass inate Lincoln was fina lized .
wa s Commercial and F i nanc i a l . and the third or The assass ination was carried out by John Wilkes
highest degree was the politic al governing body. the Booth . a member of the KGC , a long with John
American Legion. Each degree was divided into Harrison S urratt who had been trained by Jesuits at
divisions which were in turn divided into departments . J e s u i t G eo r g e t o w n C o l l e g e ( no w k n o w n a s
The 1 0 departments comprising a division were G eorgetown University ) . The two were under the
Agriculture. Education. Manufa c turing. F inanc e .
Religion. Police. W a r . Navigation . L a w. a n d a Foreign
Offic e .
Thu s . when the Confederate government was
established. the KGC was its ready-made leadership
The sym bols of
body . With 65 . 000 KGC members in the South . and
several mem bers of President Buchana n ' s cabinet the Kn ights of
also me mbers of the KGC . the p lot to pull off a
m ilitary coup nearly succeeded . the Golden Circle
Central in the p lot was the assassination of
President-elect Abraham Lincoln . In February 1 8 6 1 a
plot to kill Lincoln was in place in B a ltimore. Md.
There. under a subunit known a s the Palmetto
Guard s . the KGC p lanned the m u rder of Lincoln . It
was only due to the efforts of General Winfield S cott.
that the plan did not succeed - until four years later.
D uring the Civil War the KGC was used to run
sub version through the D e m ocratic Party faction
known as the Copperhead s . or antiwar Democrats .
With a plan for provoked outbrea k s of violence and
T h e s e t w o s y m b o l s (above . a n d r i g h t ) w e r e d i s played
terror c o m bined with Confederate m i l itary
i n s i d e the K n i g hts of the G o l d e n C i rc l e " ca s t l es . "
operations. in Missouri . I llinois . Indiana . Ohio .
Kentucky. Tennesee. and the cities of Chicago and
New York. the Confederacy a i m e d to destroy the
North ' s ability to fight. Draft riots aided by Jesuit
priest s . with the cooperation of the Mayors of New
York and Chicago. Fernando Wood and Edward
Walsh. as key conspirators . were d e s igned to stop the
war by forc ing a negotiated settlement.
All espionage and terror operations dep loyed into the
North were under the direction of the Confederate
S ec retary of State. Judah P. Benj a m i n . Benj a m i n . a
former U . S . Senator from Loui siana. was born in the
British West Indies in 1 8 1 1 and remained a British
s ubj ect throughout his career in the U . S . U nder the
Confedera c y B enj a m i n bec a m e first Attorney Th i S tria n g l e appeared on K n i g h t s of t h e G o l d e n C i rc l e
l eafl ets a n d on other p u b l i cation s .
2 . See Pumfrey. ibid.

52 TERRORISM E X E C U T I V E I NT E L L I G E N C E R E V I E W O c t . 1 0-1 6 . 1 978

i m m ediate direction of Benj a m i n a n d Tho m p son . A m erican K n ights a n d The Sons of L i berty were two
Most of the intelligence garnered a n d reported by new n a m e s it took before it b ec a m e the K u Klux Klan.
U n ion countere sp ionage operation s w a s suppressed at
the Lincoln a s s a s s i nation t r i a l b y S e c retary of War
Edwin S tanton . S tanton had known B e nj a m i n quite
2 . 8 ' nai 8 ' rith, or the I n d epend ent O rder
inti m ately s i n c e 1 8 50 , when both were dep loyed b y the
U . S . govern ment as m e m b e r s of the C a lifornia Land
of the Sons of the Covenant
Com m i s s ion : S tanton headed u p the c o m m i s s ion and
I s r a e l Joseph B e nj a m in , a E u ro p e a n S ephardic J e w .
had Benj a m i n a s his able a s s i st a n t .
toured the U . S . i n 1 8 59 - 6 2 . Benj a m i n ( no relation to
It is n o w k n o w n t h a t n o t o n l y d i d J o h n Harrison
Judah Benj a m i n , a lthough the two m et ) was p art of a
S urrat escape capture through t h e efforts of two Jesuit
network of h u m a n i s t s a s soc iated with A lexander von
priests and wound up i n the Papal Zouave s , but that
H u m boldt dep loyed to p rofi le J e w i s h organizations in
Booth also escaped. The coverup " ki l l i n g " of Booth at
the U . S . In a book titled Three Yeas in A m erica he
Garrett ' s farm was carried out b y U n ion officers who
d e s c ribed the B ' nai B ' rith as fol lo w s :
were h i ghest-degree m e m b e r s of the S c ottish Rite of
" Th i s is a secret society , like the F r e e m a sons , with
Freemasonr y . E ven the h e a d of the National
p a s s word s , s i g n s , and the like . . . s t i l l I think that
Detective Bureau , Lafayette C. Baker, who was later
e x i s t e n c e of such an organ i z a t io n is not at all
poi soned to death, revealed i n documents only
n e c e s sary . , . "
recently publi shed that he knew that the individual
The B ' nai B ' rith was offi c i a l l y founded in October
found in the burned-out barn w a s not Booth .
1 84 3 , a s p a rt of the Roth s c h i ld and B r i t i s h m onarchy
The KGC underwent s e v e r a l face l ifts to prevent
e ffort to esta b l i s h what i s tod a y known a s the Zionist
detection, and rechristened i t s e l f . The Order of the
m o v e m e n t . Founders of the B ' na i B ' rith, the Order of
the Sons of the Covenant, i n the U . S . were m e m bers of
the financ i a l h e i rarchy of the Roths c h i l d c i r c l e s ,
including the S el i g m a n s and D r . K u ttner B a ruch from
Charleston , S . C . , the father of B r i t i s h agent Bernard
Baruc h . The elder Baruch was later respon s i b l e ,
a l o n g with J u d a h B e nj a m i n , for s e t t i n g up a n d
fina ncing the Ku K l ux K l a n .
T h e B ' na i B ' rith w a s oste n s i b l y organized so that
the J e w s c o u l d h a v e t h e i r own F r e e m a son
organization . But its real purpos e w a s to provide the

0
, 1 //
b a s i s from which to fina n c e the s u b version of the U . S . ,
and use the U . S . a s a b a s e for dep loying these
..... ,..
networks international l y to protect the Rothschild
- -
interests . There were over 44 J e w i s h organizations in
,.. .... the U . S . along which provided the Rothschilds their
" , service.
I I \
" The n a m e of Roth s c h i l d . i n a l l countr i e s , i s a
s ynonym for honor and genero s i t y . and no n a m e in
E u rope has popularity so great a n d so w e l l - m erited .
The Roths childs in F r a n c e o c c u p y a s o c i a l position
even h i gher tha n that of the E n gl i s h branch of the
fa m i l y . . . . considered e q u a l s of the oldest of French
nobility . . . . "
" The J e w i s h religion h a s m a n y observances and
* c u s t o m s correspondi n g to the s e c ret societies known
to u s . The s ynagogu e . for i n s ta n c e , m ight be

1---------".......
{r * c o mpared to a lodge room . . . . The s ign consisted of
the grip given with a full hand. and the m a g i c a l words
Sholem Alachem . The m e s s u s a h ( r e l igious artifact)
was the counters ign . S h e m a I s ra e l (Hear 0 Israel)
was the p a s s word . "
Both o f these p a s s a g e s c o m e from the original
m a gazine publication of the B ' na i B ' rith. The
T h e f l a g of t h e C o n f e d e ra c y r e p e a t e d t h e K n i g h t s of t h e
Menorah. The magazine ' s editor w a s one of the B ' nai
G o l d e n C i rc l e ' s 1 5 stars m o t i f i n a f o r m e c h o i n g t h e B ' rith ' s m e m b e r s . Benj a m i n F r a n k l i n Pei xotto . who
British flag . later. as a U . S . consul to R o m a n i a e s t a b l ished the
B ' na i B ' rith there under the na m e of the Order of Zion .

O c t . 1 0 - 1 6 , 1 9 78 E X E C U T I V E I N T E L L I G E N C E R EV I EW T E R RO R I S M 53
He also operated as a Rothschild agent in
overthrowing the government of R o mania and placing
King Charles on the throne, thereby giving the
Rothschilds a firm Balkan foothold from which to
p enetrate Russia.
B y 1 860, thi s secret order had established the
international Zionist networks under the name of the
Israelite Universal Alliance. It was the combination of
the B ' na i B ' r ith and the Knights of the Golden Circ le
that gave birth to the Knights of the Ku K lux Klan.
I mportantly, the whole Order o f Z ion proj ect was
developed during the late 1 830s and early 1 840s by the
Earl of Shaftesbury and Benj a m i n D i sraeli . An 1 862
expose by Samuel Morse on " The Present Attempt to
D i s solve the Union, A British Aristocratic P lot"
identified Shaftesbury a s the organizer and funder,
operating from Exeter House i n London, of the
abolitionist movement in the U . S . D i srael i , later to
become Britain ' s Prime Minister, was the key 1 9th
'
century figure around which the Z ionist networks
were built. Disraeli h i m s elf, a S ephardic Jew,
became part of the Cult of Isis after a n 1 830-31 sojourn
to Malta, Greec e , Turkey, and Jerusalem .
3 . The K n i g hts of Ku K l u x K l a n
C entral t o the reorganization o f the K G C w a s Judah P .
Benj a m i n . It should be remembered that Benj amin
never relinqui shed his British citizenship when he
served the U . S . Senate or the Confederacy : indeed ,
right after the assassination of Lincoln, Benj a m in
escaped to E ngland , where he worked for the London
DailY Telegraph and later beca m e the Queen ' s
Counsel for Lancastershire.
In December 1 865, the Knights o f Ku Klux Klan was
founded under the leadership of G eneral John T .
Morgan, General Albert P i k e ( the latter known as the
" father of the F reemasonry in the S outh " ) , and a
s m a l l group of confederate officers , in a place outside
of Pulaski, Tenn . What i s less well known i s the fact
that the Knights of the KKK was Judah Benj amin' s
brainchild.
P.rior to his escape to E ngland, B e nj a m in m et with
the top Confederate m i l itary leadership to establish
the basis for the consecration of the Invisible E m p ire
of the KKK. The financing woul d be provided by D r .
Kuttner Baruch of t h e B ' na i B ' rith, who was already
i n Charleston financ ing the secessionist movement.
The international agent deployed to E ngland to
maintain contact with Benj a m in in 1 86 7 was a Catholic
bishop , a Jesuit named R ichard W i l m e r .
T h e belief s tructure o f t h e KKK wa s nearly identical
to that of the Knights of the Golden Circle. The " fiery
cross " became the symbol of the new order, with
dress and other formalities identical to the KGC and
54 TERRORISM E X E C U T I V E I N T E L L I G E NCE R E V I EW
the Knights of Malta , the " hooded ones . " The use of
the G reek word kuklos. m eaning circle. emphas ized
the continuity with the Knights of the Golden Circle
and underlined the belief in the magical power of the
c ircle. a derivative from the anc ient cult practices of
antiquity.
The KKK ' s usefulnes s to the Rothschilds and the
British aristocracy was its aid in preventing any
s e m blance of Lincoln ' s reconstruction effort from
succeeding. Originally led by Imperial Wizard
G eneral John T. Morgan , who during the Civil War
had participated in the KGC ' s attempts to fom ent
uprisings in the North, the KKK was then turned over
to a leader more suitable to the c ircum stances of the
postbellum South : the world ' s first guerrilla warfare
expert, Nathan Bedford Forrest. ( Morgan had
meanwhile become a U . S . Senator .) The terrorist
ca mpaigns that ensued thanks to the KKK are well
doc u m ented.
After the Reconstruction era, the KKK was dorm ant
for a few decades . But it was resurrected in 1 9 15 , when
two mem bers of the Knights of Malta-Red Cross
organization formed som ething called the " Invisible
E mpire , " under the direction of a man named William
Joseph S i m mons . The essential difference between
the original Klan and this new version was while
m e mbers of the original Klan could be Jewish or
Catholic , the new belief structure was that of a " race
purist" cult. The " Nordic" m yth used to reorganize
the KKK was a parallel deploym ent to the
development of the Nazi ideology a few years later .
In a 1 924 interview published in the E nglish
Speaking Un ion magazine Landmark. I mperial
Wizard Dr. H.W. E vans announced that the Nordic
belief structure was the essence of the KKK ideology.
In a reply, Rothschild agent I s rael Znagw i l l , the
author of a proj ect to have Jews settle in South Africa
at the turn of the century , gave a s his primary
" obj ection " to the KKK that it exc luded Jews from its
m e m bership .
Another of the lesser-known aspects of the KKK is
the fact that in the 1 930s , Franklin D e lano Roosevelt ' s
electoral victory i n the South w a s d u e t o the role o f the
" Southern Roosevelt Clubs " organized by the KKK.
Meanwhile, the well-docu m ented terror operation
against S outhern blacks continued .
The reem ergence of the KKK during the late 1 9 50s
and 1 9 60 s was again centered i n the South , and now its
purpose was to foment race war between blacks and
whites . With the other side of the set-up , the civil
rights movement, largely under the c ontrol of the
various liberal British-control led networks acting
through the B ' na i B ' rith ' s Anti-D efam ation League
and allied institution s , the contrived race war
scenario enjoyed sig rt ificant succ e s s . Today that same
terror capability i s still in place, and still under the
control of the same force s .
- Pa ul Goldstein
Oct . 1 0- 1 6 . 1 978
How K l a n -Z i o n i st te rro r o pe rates today
Medford E vans ' s c a l l for a n a l l i a n c e between the ex­
trem e right and the Zionist l o b b y in the S eptember
i s s ue of the John Birch S o c i e t y ' s Am erican Opinion
m a gazine does not m erely a c k n o w ledge the long­
standing fac t of the support and funding by such Zion­
ist organizations as B ' nai B ' rith and the Anti-D efa ma­
tion League of the Ku Klux K l a n . the American Nazi
Party. and s i m i lar rac ist a n d a n t i - S e m it i c organiza­
tions .
More im portantly. the artic l e is i ntended to help pro­
voke a factiona l regroup m e n t of the U . S . right wing
which will set the stage for a renewed upsurge of Klan
and other right-wing violence a n d terror i s m . On the
one hand. it i s plann e d . s e m i - r e s pectable elem ents
like the Birch Society m e m b e r s h i p w i l l be able to ally
openly with the soc i a l democrats o f the American
Jewish Comm ittee for a n attack upon the " G eorgia
Mafi a " grouping within the C a r t e r A d m i n i stration .
and for a return to a cold w a r foreign p o l i c y . On the
other hand. the AD L-coord inated K l a n and neo-Nazi
gangs which constitute the " a nt i - S e m itic " right
(epito m ized by the case of F ra n k " Cohen " Collin. the
Jewi sh-born " F uhrer" of the N a t i o n a l S o c i a l i s t Party
of A m erica) are being geared up for a maj or outbreak
of terror ism within the U n i t e d S ta t e s . playing upon
right-vs . - l eft . J ew-vs . -Nazi profiled l i n e s .
Committee o f Ten Million
According to sourc es in regular contact with Evans .
both E vans and Birch leader Larry McDonald - a
D e m ocratic congre s s m a n from G eorgia - are collab­
orating directly with Robert D e P u g h . head of the
defunct Minutemen para m i l it a r y op eration. to form a
" Co m m ittee of Ten M i l l ion . " O s t e n s i b l y intended for
m a s s i v e right- wing intervention i nto the 1 9 80 presi­
dential e lection . the C o m m ittee ' s p r i m ary purpo s e .
sourc es w i t h i n t h e U . S . i n t e l l i g e n c e c o m m unity
report. is to serve a s a cover for m a s s ive " dirty
tricks " sim ilar to those carried out j o intly by DePugh .
McDonald. a n d Buckleyite p o l i t i c a l hatchetman
R ichard V i guerie to head off effe c t i v e conservative
opposit ion to President Carter a n d to c over up the vote
fraud carried out by Carter ' s Z i o n i s t lobby supporters
in the 1 9 76 election.
A primary function of the C o m m ittee will be to
rea c t i vate the networks o f profe s s io n a l a s s a s s i n s and
terrori sts who were the core of D e P u gh ' s Minutemen
operatio n . Glen Turner, who ran the notorious Cos cot
cosmetics pyra miding s w i n d l e in F lori d a , has been
deployed to provide DePugh and Co. with behavior
motivational techniques to b u i l d a n army of what
D ePugh is cal ling " patriots for profit , " a s a cover for
this deadly capa b i l i t y .
Oc t . 1 0- 1 6 . 1 978 E X EC U T I V E I N T E L L I G E N C E R E V I EW
R e liable sourc es w i t h i n the C o m m ittee report that
funds raised by these " conserv a t i v e s u p ersales men"
and laundered funds both from C ro a t i a n U stashi net­
works (organized out of the for m e r s e c re t police of the
Q u i s l ing government of the Na z i - o c c u p i e d " I ndepen­
dent S tate of Croatia " ) and fro m the AD L . have
a lready been funne led into r e a c t i v a t i n g former
Minutemen hit tea m s . It i s known that D e P ugh has
g i ven orders to one such team t o b e g i n the profiling
a n d other preliminary steps for a n a s s a s s i nation
attempt upon Lyndon H. LaRouch e . J r . , c h a i r m an of
the U . S . Labor Party.
1 9608 violence
The Zioni st-right wing terror ist potent i a l repres ented
i n this regroupm ent is no idle danger . In the violence­
ridden 1 960s civil rights era , E va n s ' s " White C i t i z e n s '
Counc i l s " - w h i c h h a d several Z i o n i s t l o b b y a g e n t s in
key leadership posts - were the b u l w a rk of the K l a n .
S o u r c e s in t h e K lan suspect one of t h e s e Zioni st
a g e n t s , who occupied a treasurer ' s post in the
Citizens ' Counc i l s , of laundering funds supplied b y the
Anti-Defa m ation League into the racist group .
Ac cord ing to for mer Klan leader Roy Frankhouser.
who w a s among the first to expose the manipulation of
both sides in the c i v i l rights confli c t b y British-Zionist
lob b y agents, the AD L c o l l a borated with John Doar.
the Kennedys ' chief civil r i ghts troubleshooter. to plot
a triple a s s a s s i nation of c i v i l rights figures in 1 9 64 at
the height of " M is s i s s i p p i S u m m er , " when thousands
of c i v i l ri ghts organizers tra i n e d under grants from
the F ield Foundation . S tern F oundation . James P .
Warburg and others were flood i n g the South . Had this
a s s a s s ination plot not been aborted b y m e mbers of the
U . S . intelligence c o m m u n i t y . it w o u l d have pitched
the U . S . into bloody chaos and confusion .
The intended targets of the 1 96 4 c o n s p iracy were the
three young c i v i l r i g h t s o r g a n i z e r s . M i c h a e l
S chwerner. A n d r e w Good m a n , a n d J a m e s Chaney,
who were found m urdered near P h i ladelph i a , Mis s . ,
o n A u g . 4 , 1 9 64 ; S a m Bowers . I m p er i a l Wizard o f the
M i s s i s s ippi White K n i ghts of the Ku Klux K lan ; and
Martin Luther K i n g . D e l m a r D en n i s . the key agent
within the Klan who helped arrange this p lot . was
later e m p loyed by the John B i r c h Society. Birch
leaders John Rees and Herbert R o m m erstein were
i m p l i cated in the r e s u r r e c t i o n of this t r i p l e
a s s a s s ination p lot s c enario in 1 9 6 8 which ignited a
wave of urban riots .
It was also Frankhouser who, in a 1 9 76 expose in the
Washington Star. first revealed the fact that Gary
Thom a s Rowe, the governm ent ' s star w itness against
the Klan murderers of c i v i l rights organizer Viola
TERRORISM 55
Liuzzo. had him self comm itted this m urder and other
violent acts that were pinned on duped Klans men.
Rowe was an agent for John Doar a n d . through him . of
the Z ionist lobby.
R obert Shelton . who has inherited this tradition as
I mperial Wizard of the United Klans of America and
who works closely with DePugh and The Committee .
is controlled by the same Z ionist-right wing networks .
Typifying the lines o f thi s control i s the case o f Eugene
Tabbhut. who . as Chief of the Klan Bureau of
Investigation in the 1 960s. dete r m ined who was and
was not an " agent " and. therefore. the composition of
S helton ' s United Klans of A m e r i c a . F B I docum ents
released under the F reedom of Information Act
indicate that throughout his c a reer Tabbhut was an
agent of the American Jewish C o m m ittee and the
Anti-Defamation League , whose a c tivities also
inc luded the theft of docum ents from the office of an
opponent of Z ionist lobby Congre s s m a n Bill Green in
Philadelphia for publication in the Philadelphia
Inquirer, then owned by Walter Annenberg . a Zionist
lobby leader and former U . S . A m bassador to G reat
Britain.
Tabbhut was also in the e m p lo y of the British­
controlled pretender to the throne of Yugoslavia. King
Peter II. in the 1 960s when the " k i n g . " who resided in
the United States . broke off from the Russ ian branch
of the Order of St. John of Jerus a l e m to form his own
Knights of Malta group . This new Knights of Malta
grouping j oined together elements of the Croatian
Ustashi and other E astern European fascist group s .
w i t h Z i o n i s t l ob b y f i n a n c i a l s u p p o r t . S u c h
collaboration between the Zionist lobby a n d Nazi war
crim inals and s i m i lar strata in the U . S . i s not unusua l .
T h e AD L gave i t s " torch o f freedom " human rights
a ward to Rev. Vlad i m i r Klodn y c k y in Newark, N . J . .
ostensibly for saving Jewish lives during pogroms in
1 9 1 9 in the Ukraine . By his own a c c ount. K lodnycky. at
the time a major in the notoriously anti-S em itic White
Russ ian armed force s . a l so i m p ri soned Jews until
they had met his extortionary d e mand for 1 m i llion
karbovantsi ransom . Again. when the U . S . Labor
Party sought to expose the war c r i m e s record of two
" ex-Ustash i " in Cleveland . Ohio . the local Anti­
D efam ation League official who confirmed their war
record was fired when he d i s covered that the AD L
headquarters in N . Y . had likewise given them award s .
and he demanded a n explanation.
" Sec ret arm y of England "
According to intelligence com m unity sources privy to
t h e found i n g of D e P u g h ' s M i n u t e m e n . the
56 TERRORISM E X EC U T I V E I N T E L L I G E N C E R E V I E W
organization had nothing to do with the irregular
forces of the American Revolutionary Army by that
name. but was modeled in fact upon the Sec ret Army
of England . The Secret Arm y of England was
deployed as a strikebreaking force in that country in
the 1 920s. and elements of it were later incorporated
into Fabian Sir Oswald Mosely ' s British Union of
Fasc ists with support of the British nobility. While
many otherwise patriotic m e m bers of the U . S .
intelligence community were involved with the
Minutemen in the belief that it was a last gasp defense
in the event of war or a weapon against British
" F abian" networks in the U . S . . effective control was
exercised by the then head of the domestic branch of
the CIA. Tracy Barnes. who is a m e m ber of the British
Knights of Malta . and b y the dubious former CIA
counterintelligence chief James Angleton.
Under the direction of Angleton. whose motives are
still unclear. and of certain " Buckleyite" layers within
the intell igence community. the Minutemen became a
manpower pool for every kind of international
destabilization and terror operation. T�ese included
aid to j oint efforts by Israeli intelligence and B lack
Maltese forces in E urope in repeated attempts to
assass inate French President Charles de Gaulle.
using the Algerian Secret Army Organi zation as
hitmen. Contam inated elements of the Minutemen
show up repeatedly with Clay Shaw of the Bronfman
f a m i l y ' s P e r m i d e x C o r p o r a t i o n a ro u n d the
assass ination o f President J o h n F . K e n n e d y . in a
m anner which has yet to be seriously exp lored .
F urthermore . a " Minutemen" training c a m p in New
Orleans . donated by assoc iates of Israeli Mossad ' s
Mafia chiefta in Meyer Lansky. h a s been publicly
impl icated in several attempts to a s s a s s inate F idel
Castro . Much more concerning the s e operations could
be said. but the es sential point is that the Minutemen
had nothing to do with the national security of the
United State s . They were in fact a maj or vehicle for
c a rrying out internationa l " b lack operations . "
It was the Minutemen too who throughout the 1 960s
played an integral role in contrived warfare with
terrorist gangs coord inated b y the " left-wing"
Institute for Policy Studies ( w ith which DePugh was
actually , in direct liaison ) . following the model of
British " s urrogate warfa r e " o p e r a t i on s . This
" surrogate wa rfare . " involving both the " antiwar"
and civil rights movem ents . c u l m inated for the
Minutemen in 1 96 8 . with a c o m p lete takeover of the
organization and establishm ent o f total control over
the brainwashed DePugh by Kennedy holdovers in the
Justice Department. in col la boration with the AD L .
- Scott Thompson
Oct . 1 0- 1 6 . 1 978