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 Vivian Zoakos " . Science & Technology appropnate Morris Levitt Soviet Sector " Rachel Berthoff technology 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 documentary reports on the most influential Kissingerian Executive Intelligence Review 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: Zionist control over Ku Klux Klan THIS 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 THIRD 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 Why Appropriate Technology Can't Work ... .. "turn" in the Bircher press that 2. .... 13 Th e real science of development. explained signals an imminent terror acti­ by the FUSion Energy Foundation vation. Paul Goldstein dredges up 3. The Genocidal Results in Bangladesh ...... 15 the hidden story of the Klan's crea­ Kissinger and the Brandt Commission . . . .. tion by the B'nai B'rith conduits of 4...... 16 An expose from the Indian weekly New Wave the British-Canadian intelligence From the Debate on Development. ... . services. And, Scott Thompson 5. U.S...... 18 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? ...... Soviets: Camp David ...... 21 Syrian leader: Kissinger killed Faisal is 'a nother Munich' 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 banker Robert Abboud and 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 "Microbes of Munich," the rac­ The new monetary order seeks war-a voidance - but where is the United States? ist parallels between Maoism and

Europe: A Shock Treatment for Brzezinski ...... Zionism, and the real basis for .. . . 27 Mideast peace. Also: Soviet Sector OPEC: 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 underworldis Vol. V, No. 39 stealing your vote October 10-16,1978

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 and Zionism REPORT, 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 fade away doings of the criminal underworld. Included in our coverage: a wide­ ranging interview with Edgar COUNTERINTELLIGENCE Bronfman, provided exclusively to The CIA - Only a Caretaker Force ...... 41 the Executive IntelJigenceReview. Labor H. u. S. Party Chairman Lyndon LaRouche 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 Seagram's boss by Europe's "black nobility" - a report from our European correspondents that includes an TERRORISM exclusive interview with one of the How Zionists Orchestrate KKK Terrorism ...... 48 most prominent black nobles, Otto An introduction by the U.S. Labor Party's von Hapsburg. LaRouche on the preparations for a terror activation * A hard look at the current battle The Rothschild Roots of the Ku Klux Klan ...... 50 between Safeway 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 New Solidarity International Press Service $10 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 ...... DOCUMENTED ... REPORTED HOW what's behind the world outbreak of terrorism . fusion energy researchers in the United States the names of the global networks that deployed achieved the milestone breakthroughs reported in both "Ieff' and "right" terrorism to kill Juergen August, 1978 from Princeton, and what other Ponto. Hanns-Martin Schleyer, and Aldo Moro­ advances are coming in this clean, cheap and and plan an even bigger terror wave for the United virtually unlimited solution to the world energy States ... Executive Intelligence Review provides crisis ... how and why there was a massive the tirst-hand documentation from the world's sabotage attempt against the U.S.fusion program, press, including accurate translations from non­ and who's backing fusion now . .. what were English sources, showing how continental Europe, Japan's and the Soviet Union's offers in 1978 to the Japan, the East bloc, the Arabs and developing USA for joint fusion R&D. se ctor countries are seeing and acting on events.

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------� From Disn eyland to Halloween?

Though the EMS moves forward, insanity rules in Washington

Political metaphor became all-too­ the world markets only confirms Enoch Powell has declared that the sensuous reality last week when the the lunacy of current U. S. European Monetary System President of the United States used monetary policy. threatens to win the "war of Disneyworld as the forum from The psychology of the process conquest they (France and West which to tell 2,500 leaders of now in force in the White House is Germany) are waging against the American business that Camp all too clear. A clinically psychotic United Kingdom." while, from the David was a roaring success. All policy-making doctrine has been opposite bench. the Labour Party the evidence indicates that the imposed top-down on all aspects of has issued its own rejection of the unchallenged hegemony of the Administration. and any facts EMS. on the grounds. according to Zbigniew Brzezinski, Henry that betray the insanity of the East German radio reports. that it Kissinger, and through them the Brzezinski policy line are being is an "imperialist scheme." City of London, over the Carter deliberately. obsessively ignored. Less publicly, the strategists of Administration's foreign, With Disneyland already here, the London are even now deciding monetary, and domestic policy has obvious next stop is Halloween. whether to deploy their Israeli plunged not only the U.S. leader­ puppet into open war on Lebanon to ship but, apparently, leading What's going on out there? stop the reportedly effective, corporate, financial. and other Fortunately the fate of the world Soviet-backed Syrian actions business circles into a mass­ does not rest entirely in the hands against the Israeli- and London-run psychosis Fantasyland. of Jimmy Carter. West German Falange. They may indeed be Camp David brought "peace in Chancellor Schmidt. French desperate enough to go for a full­ our time," says the Administra­ President Giscard d'Estaing, scale East-West confrontation, as tion, and as we go to press, the Japanese Premier Fukuda, and the "lesser evil" compared to the fighting in Lebanon is quickly their allies in the Arab countries, political and economic obliteration approaching all-out Mideast war, the Third World, and the Soviet of City of London power that the with the imminence of a U.S.­ sector are racing ahead to effect European Monetary System drive Soviet showdown not far behind full implementation of the new portends. (see INTERNATIONAL). European Monetary System and That London and its allies are The way to "defend the dollar" is the associated program of global indeed fully that insane should not to throw the U.S. into recession and high-technology-based economic be doubted - look at what that strangle development of the Third expansion (See ECONOMICS). outlook has already wrought on the World altogether, say the White They are also moving directly to mental processes of America's House and various business intervene into the Middle East, leadership. But as long as the spokesmen - while the European, with a combination of public initia­ power of the United States remains Japanese, and Arab proponents of tives and private diplomatic moves in their grip. the future of the world the "G rand Design" world develop­ for a Geneva solution to the Camp remains in grave doubt. ment strategy come under fire David mess. The efforts of Schmidt. Giscard. from Washington as "antidollar" So dramatic has this motion and the rest could well be for for their efforts to provide the U.S. become that Great Britain, the naught unless the U.S. Administra­ currency and the U.S. economy policy motherland of the psychosis tion is quickly dragged back into with a real way out of the crisis. dominating Washington, is howling reality. The dollar's continued plunge on with rage and terror. Fascist

Oct. 10-16. 1978 EXECUTIVE INTELLLlGENCE REVIEW THISWEEK 5 Democracy and the Italian fascist organizations, but which is also represented politically under other On the death of Pope John Paul covers by the Lombardi-Craxi faction of the Socialist Party and The Italian press has revealed that by soothsayers like Jeanne Dixon, by Ugo LaMalfa of the Italian prior to his untimely death last as well as the schismatic Lefebvre Republican Party. " week, Pope John Paul I was force's immediate comments, are LaRouche pointed out that the planning a personal intervention a "trick" of political intelligence same method of "predicting" into the Mideast crisis as well as operatives that has been handed calamitous events was employed in the full and rapid reunification of down through the ages among Eur­ the first Nixon Administration, by the Roman Catholic and Russian ope's black aristocracy. Henry Kissinger, in his effort to Orthodox Churches. In light of "Although the titular leadership undercut the influence of then John Paul's plans to undertake and center of gravity of the 'Black Secretary of State William P. such a crucial diplomatic role, the Maltese' networks internationally Rogers and his Mideast peace­ immediate response to his death is the British monarchy, the hard through-development policy. from his self-appointed critics, core of the Cult of Isis down Not surprisingly, Lefebvre is a Archbishop Lefebvre and the through the millennia is a group of creation of the black nobility, his radical Berrigan brothers - that ancient Roman families, some prime backing coming from his sudden passing was "God's tracing their ancestry accurately Princess Pallavicini, the reigning will " - is more than offensive. An to the family of Julius Caesar, " monarch who controls black fascist associate of Lefebvre's cheered the LaRouche said in his statement. networks from the Atlantic to Latin Pope's passing by telling the press "It is that 'black nobility' which America as well as the Middle "if God withdrew him after one has often murdered Popes by East. The Princess comes from the month, it is because he didn't want poisoning in the past, and which is Lebanese Sursok family, which not him to reign ...." the leading sponsor of Archbishop only shares in the control of the Lefebvre. Nazi Lebanese Falange, but has a Behind Archbishop Lefebvre "The Agnelli family is an history of collaboration with In a statement released Oct. I, U.S. integral political component of a oligarchic forces dating back a Labor Party Chairman Lyndon H. 'black nobility' faction in Italy, thousand years, including the LaRouche noted that the which is principally situated within ancient Egyptian cults of Isis and predictions of John Paull's death the Fanfani wing of the Christian Osiris. ·

High score for terror foes in Europe

In a swift response to a series of authorities have followed wide­ Nadia Mantovani, who was on the murders and bombings claimed by spread exposures, including state­ most-wanted list. She has been the Red Brigades since mid­ ments by Italian carabinieri identified as the coordinator of September, Italian antiterror (national police) Gen. Dalla logistics between the West German authorities carried out a successful Chiesa, pointing to Israeli and Baader-Meinhof gang and the Red sweep of safehouses in Milan and British intelligence control of inter­ Brigades operating from bases in made at least nine arrests of sus­ national terrorism. As we reported Switzerland. pected terrorists by Oct. 3. This in our Aug. 29-Sept. 4 cover story, But Dalla Chiesa may have brings the European-wide cleanup Dalla Chiesa, whom Premier uncovered something even more of key terrorists to 15 arrests in Andreotti put in charge of Special important in last week's Milan three weeks. Operations against the Red dragnet, which could lead up to In West Germany, recent Brigades after the kidnapping and high levels of collusion with inter­ BaadeJ;-Meinhof arrests resulted death of Aldo Moro last spring, national terrorism inside the largely from a national poster identified Baader-Meinhof terror­ government that have been campaign by police which identi­ ist Joachim Klein as a protege of charged ever since former Prime fied wanted gang members and the Israeli intelligence service Minister Moro's death by several made their public movement Mossad. Italian sources including the difficult. Included in the Milan arrests Communist Party. The Italian The effective moves by were two of the original members press reports that police found the European law enforcement of the Red Brigades, one of them transcripts of Moro's 55-day

. 6 THIS WEEK EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 imprisonment in one of the Red that new people have been his audience, many of them active Brigades covens. Divulging recruited - people who until lately in linking Denmark into the nothing of the contents of these seemed to be leading a normal life European Monetary System, that documents, Dalla Chiesa hurried and have now gone underground." industrial and business leaders, off to Rome with the announcement In related British intelligence rather than diplomats , would be that he will investigate within the initiatives, terrorism "experts" the main new targets of terrorism. Italian Justice and Interior Gen. Richard Clutterbuck and A similar theme was struck by Ministries. Brooks McClure warned industrial Brooks McClure, a British-linked Partly because of these executives in Copenhagen and U.S. terrorism expert who successes, and partly in an effort to Chicago last week that an outbreak gathered profiles of leading hit the leadership and potential of terrorism is "inevitable." corporations and executives on leadership of the emerging Clutterbuck, a member of the their susceptibilities to terror European Monetary System, the Royal Institute for International attack for a recent Commerce City of London has put out pre­ Affairs who operates as a lecturer Department project run out of the dictions that terrorism will strike on Police Violence at Britain's National Security Council. West Germany and spread to new University of Exeter, gave this McClure told more than 200 targets in Denmark and the United message to a conference of leading representatives of Midwest States. Danish businessmen in industrial firms gathered at a Sept. British intelligence has even Copenhagen. Clutterbuck is 27 conference in Chicago to "pre­ made a

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW THIS WEEK 7 ( THIRD WORLD

Henry Kissingerls lappropriate technologyl

Environmentalism versus developing and industrial nations

In August of next year the United Nations will convene of science and technology in the world. or whether we a special conference in Vienna on "Science and will now say to the rest of the world that science. like Technology for Development." a major international God. is dead and our industrial progress is only a event which is already a factor in the policy planning model for the environmentalist bogeys of pollution. of governments across the globe. Preliminary waste. and technocracy. statements on science and technology policy. Kissinger. Humphrey. and the rest in the U.S. here particularly as regards the task of development for are merely the domestic wings of an international and of the mass of humanity in what is called the gang of "limits to growth" austerity advocates. The developing sector. have already been submitted to the castle keep of these latter-day feudalists is the United Nations Secretariat charged with preparation International Monetary Fund and the World Bank of the conference. (otherwise known as the International Bank for While none of these documents are yet public. our Reconstruction and Development). headed up by sources reveal that the dominant emerging theme is a Robert McNamara. Last year. the World Bank and cry for "appropriate" (or in the language of the McNamara created an "independent" commission of developing agencies. "intermediate") technology. individuals under the direction of West German This is not surprising - as we reveal in this report . an former Chancellor Willy Brandt to oversee their effort was mounted from the moment the UN General attempt to determine the content of relations between Assembly first decided on holding the conference to the developed and developing worlds. the "North­ . make sure that the transfer of real science and real South dialogue." technology to the developing sector never takes place. The Brandt Commission. whose background and The "appropriate technology" mafia that has history is also examined below. is the most prominent moved to dominate all international discussion of agency of the deindustrialization strategy of the development is led in this effort by none other than appropriate technology m!lfia. Just recently the former U.S. Secretary of State Henry Kissinger. While Commission held a closed meeting in Tarrytown. still officially holding that post (as opposed to his N.Y. which was graced with a special presentation by informal maintenance of that position in the present Henry Kissinger. a de fa cto member of the group. Administration). Kissinger organized to channel U.S. described by Brandt as the man best qualified to know participation in and control over this conference and "how we can sell our proposals to the rest of the the events leading up to it along appropriate world." technology lines. Simultaneous to Kissinger's efforts within the government. a gaggle of Senators and Congressmen. with the late Senator Humphrey in the The threat to the industrial nations lead. began moving for a revision of our foreign aid The efforts of the IMF. the World Bank. Kissinger. the legislation which dictated that all American aid be Brandt Commission. and so on to force appropriate channeled into the same format. technology down the throats of the developing and the The import of this fight on Capitol Hill should not be developed sectors are a necessary complement to underestimated - at stake is whether the United their drive to halt European-centered moves to States wi ll be known as an industrial leader. the center restore stability to the international monetary system .

8 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 The recent Brandt Commission meeting itself focused on th is subject. The new European Monetary System agreed on this summer in Bremen has a much greater aim than mere currency stabilization. What terrifies the Kissinger crowd and its political home base, Great Britain, is that the EMS strategy is the core of an international effort, to which the Saudis and other Arabs and the Japanese are linked, to create a credit market to fund long-term development proj ects in the These diagrams are from Third World and to expand world trade with an a manual for developing nations published by the emphasis on real technology-transfer to the UN's Food and Agri­ developing sector. Expansion of East-West economic culture Organization in cooperation is also a primary aim. 1969. The introduction to The IMF and the friends of the IMF in London, New the manual. titled "Farm York, and the Grand Cayman Islands are determined Implements for Arid and to halt the EMS at all cost. The reason is simple : the tropical Regions." notes EMS pulls the rug out from under the speculative that "the use of power money markets run by the Eurodollar financiers in machinery can only be London and elsewhere, the same financiers who have afforded where the been running the campaign against the dollar. These farming system provides mercantilists run the IMF as their debt-collection sufficient cash income to pay for it ...... Animal­ agency in both the developed and developing sectors . drawn plows are the A Third World country desiring credit for the kind of hi g hest-technolog y industrial expansion that provides the markets for implements offered in industrial producers in the U.S. and Europe is told by the booklet. the IMF, on behalf of itself and the Eurodollar lenders, that such development is simply "not appropriate " to th e higher requirements of debt servicing. Therefore these barons of finance have funded and built up an immense propaganda campaign over the past decade or so with the Malthusian theme song of " limits to growth." In the interests of their austerity plans, the developing sector has been told it must seek only "labor-intensive" means of economic development, that it must abandon any hope of ever achieving advanced-sector levels of technology and what might be termed energy intensiveness. The

Oct. 10-1 6. 1978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 9 basic argument - that "fixed limits to resources" through many agencies. including involvement in the determine that the developing nations can't develop British occupation of Germany. but he dedicated the (and we can't expand world trade) - has been last 15 years or more of his life to eradicating supplemented with the importation of the more America's "edge" over Britain - namely science and spiritual" types of environmentalist antiscience into technology. The author of the term "intermediate the Third World. technology." he was the founder of the "Intermediate Technologies Group" in England in the early 1960s, Appropriate technology's British godfather which together with the International Development The godfather of this new spiritual awakening is a Service, a Colonial Office institution based at Sussex (now thankfully deceased) British "economist" by the University. was the initiating force behind the name of E.F. Schumacher, whose book Small is appropriate technologies crusade. Bea utiful is the bible of our environmentalists at home Its spread since has been wide and effective. and the appropriate technology crowd worldwide. Remember the Wh ole Earth Ca talogue. that do-it­ Schumacher was no wild-eyed hippy. but a top-level yourself guide for the rock-drug counterculture which insider of British policymaking circles and the British would have us all building our own outhouses in the Colonial Office (now known as the Overseas spirit of "getting it on with nature"? "Development" Ministry. This Oxford grad began in In this report we also feature an extremely compe­ the 1940s with the Fabian Society. through which he tent statement by the scientific authorities of the Fus­ involved himself with the planning for the creation of ion Energy Foundation on why appropriate technol­ the postwar international monetary system. In his ogy simply doesn't work. except as a method of mass written wartime commentary on the IMF proposals of murder. We leave it to the men and women of the Lord Keynes and the U.S.'s Dexter White, he American business community and labor movement criticized even the British proposal for not going far to imagine for a moment what their economic future enough in creating a transnational agency that would will look like in an appropriate technology world. be outside the control of any sovereign government. The vast markets for American capital goods. His concerns were centered on the u.S. He viewed science, and technology that are potentially the Keynes proposal as a compromise. what the u.S. represented by a massive effort at the .full-scale could be manipulated into agreeing to given that (as development of the developing nations is virtually he explicitly stated) the U.S. would never agree to the unlimited - and the EMS and the efforts associated kind of grand raid on the u.S. Treasury that bankrupt with it promise to provide the monetary and credit Britain wanted to carry out at the end of the war. But system to make that possible. What has been Schumacher confidently predicted that within 25 appropriate for America's growth and development ­ years the system would collapse anyway. and then the the highest level of science and technology known in British could again get what they wanted - control human history - is no less appropriate for the billions over the international monetary system. in the developing nations of the world. This gentleman's subsequent career carried - Da niel Sneider

1. The Kissingerians plan U.S. policy

In November 1976 Henry Kissinger, then Secretary of of Business International Corporation and. during his State. called together some 800 business. labor. and tenure a'S Secretary of Agriculture in the Kennedy other private-sector leaders for a meeting to plan the Administration. responsible for shutting down U.S. u.S. role in developing the Third World, and to food exports to the underdeveloped sector ; G. William prepare for the 1979 UN "Science and Technology" Miller. the asset-stripper head of Textron. who has Conference. The gathering took place only months since been installed as the head of the Federal after the Non-Aligned movement's historic Colombo Reserve ; James P. Grant. president of the Overseas resolution calling for debt moratorium and high-tech­ Development Council. which purveys the Kissinger­ nology development. which promised the final defeat World Bank line among businessmen ; and Frank of Kissinger's International Resources Bank scheme Pace. Jr.. president of International Executive to mortgage all developing nation's economies for Service Corporation. debt repayment, unless the Colombo current could be Pace led off the meeting with a statement of purpose stamped out. designed to make even "appropriate technology" Among those at Kissinger's meeting were a number sound good. "It is important to establish goals." he of his most loyal cothinkers : Sterling Wortman of the said. "not for the purpose of intermediate or appro­ Rockefeller Foundation. infamous for its disastrous priate technology in the developing countries. not for Green Revolution policy; Orville Freeman. president the purpose of developing new high-level technology.

10 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 The AT mafia: 'Bock to 3,500 BC'

While the environmentalists have not yet been able is capable of driving a variety of reciprocating to force windmiJIs. human dung for fertilizer. and piston. diaphragm. or inertia pumps. Output varies other Stone-Age naturalisms on any significant from 0.5 to 7.5 kW depending on wind speed. portion of the popula tion in the advanced sector, the Different rotor and pump options allow it to be used peoples of the Third World are seen as a more either for low lifts with high volume or high lifts tractable target. A sample of appropriate tech­ with low volume. for irrigation and borehole nologies at work is offered by a recent issue of the pumping respectively." magazine Mazingira: The world forum for environ­ ment and development (No. 5. 1978), which is But even more "appropriate" is this plan for published "with the support of" the UN's Environ­ "Reviving Babylon's bricks" in the starving ment Programme. (Th e same UN environmental Sudan: umbrella also shelters the Friends of the Earth and "An ancient brick-making process - first used in other environmentalist-lapping-over-into-terrorist Babylon in 3.500 BC - is being revived in the Sudan operations.) The magazine's masthead notes that in an attempt to find a local cheap source of bricks. "Mazingira means environm ent in Swahili, " and In the Sudan. as in many developing countries. adds thatit is printed on partly recycled paper. concrete blocks are expensive and local sun-dried bricks have low life expectancy and encourage the "Six developing countries are now in the process breeding of insects and fungi in their porous of testing and modifying a wind powered water structure. Burnt bricks are of better quality. but pump which has been developed by the Inter­ are relatively expensive and make catastrophic mediate Technology Group with financial support demands on limited timber supplies. from Christian Aid .... "The prototype was developed with help and Perhaps the most telJing statement of purpose in hospitality from the Engineering Department of the magazine appears in a caption to a picture. Reading University. UK. Below a photograph of an Oriental man carrying a "It is specifically intended for local production in heavy burden on a yoke is the comment: workshops of light engineering plants. "Age-old technology - perhaps painful. certainly "The wind machine has a 6-metre diameter and appropriate. "

but to arrange for present technology to be adapted to attitude toward the application of technology has the needs and requirements of the small business and emerged." This more mature attitude. he explained, small farmers." included the recognition that development could no G. William Miller. for his part. proclaimed that it longer be thought of in terms of "the reaching of a was obviously impossible to raise the Third World to : specific goal at a specific time." and that the the same standard of living that exists in the "prevailing belief or hope for many years that United States ...I don't believe that we have the development such as that achieved in industrialized resources in the world in terms of human nations could be transplanted to an LDC" (less managerial resources or labor resources. nor do developed country) was chimerical. we have the material resourc es to accomplish this "Agricultural self-sufficiency" through appropriate in a short time. technologies is the best the Third World can hope for. Nor would it necessarily be desirable to esta­ he concluded. and called on the private sector and blish the American standard of living as it now international aid agencies to persuade the Third exists. in many ways wasteful. in many ways World to accept this as inalterable fact. perhaps less rewarding than alternate cultural -Cynthia Parsons opportunities. as the norm for the world. I don't suppose that any of us would propose. in thinking of the use of technology to create development in The Stever report the world. that we try to close that gap instantly. Stever was chosen to prepare a report to help define Another important speaker at Kissinger's meeting the official U. S. stance at th e United Nations was H. Guyford Stever of the National Research conference. His paper was issued in April 1978. Titled Council. "Technology transfer. unless carefully "U.S. Science and Technology for Development: A grafted to local values and conditions. may be Contribution to the 1979 UN Conference," it was put rejected." he said. "While technology is at the heart of together with thehelp of the Brookings Institution as the development process. a new and more mature well as the National Academy of Sciences, which

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 11 Stever form erly headed. and declared itself in its directly or indirectly on the sun.... we recommend II introduction to be a "policy-shaping report. that the United States indicate its intent to lend major Here are excerpts: new support for public and private research and development activities related to energy problems in The goals of development. • 'The experience of the developing countries.... using renewable energy past quarter century has shown the limitations of sources , .. The work would have two objectives: equating growth with development.... The scarcity conservation through energy-efficient designs and of petroleum. minerals. and usable resources. for replacement of costly imports with indigenous energy example. affects world agricultura1 and industrial sources .... production and demands on the world's ability to "Developing countries must continue to seek and produce food. jobs. and services." exploit their own reserves of fossil fuels. but the greatest long-term prospects for increased energy Agriculture. "Increased crop production to feed the supplies lie in exploiting renewable resources. world's growing population can be achieved either by Especially important are decentralized technologies' expanding the land area cultivated or by increasing which may provide energy to rural areas without the average annual yields per hectare.The latter may be need to develop far-flung electric power grids such as accomplished by applying more labor per hectare. (in those on which the United States has come to depend· the form of fertilizers. equipment. irrigation ditches. . .. Some promising technologies have been developed etc.) improving the biological factors that affect crop and others are on the drawing boards based on solar productivity. or making other technological energy used directly (e.g .. heating. distillation, photo­ improvements. voltaic conversion) or indirectly (e.g .• wind. biomass' l "Problems abound in this area. The costs of hydropower) .... bringing land into production continue to rise. and the "(The U.S.) could help universities or private sector expense and environmental damage associated with institutions in developing countries to complement production inputs constrain their use. People are policy analysis by government agencies. Much con­ beginning to question the wisdom of building ever structive review of U.S. policy is done outside the more irrigation dams and using ever greater amounts government; organizations like the Brookings Insti­ of chemical fertilizers to grow crops .... tution. the American Enterprise Institute for Public "Irrigation projects have frequently failed to meet Policy Research. Resources for the Future. Inc .... expectations because the delivery. distribution, and The U.S. might explore potential contributions to drainage of water on farmers' fields are uneven. encouraging the development of such institutions in wasteful, poorly timed. and conducive to waterlogging developing countries." and salinity." Appropriate technologies. "The 1979 Conference is certain to address the question of whether sound Industry. "While there is no assurance of success, there is little doubt that their prospects for industrial­ industrialization in the developing countries requires ization will be enhanced if developing nations evolve the availability of special technology ... (because) indigenous capabilities in research and develop­ economic conditions in developing nations differ in a ment.... (but) the determinants of industrial growth number of respects from those of the industrialized in a developing economy including the role of nations. Typically. developing nations have rather technology as an input into industrialization are not large proportions of general skilled craftsmen and well understood." relatively fewer persons with highly specialized (The report proposes: ) technical skill ... (and) a low rate of capital "-creation of an international foundation with a formation so that they are characteristically capital­ multinational board and diverse international funding poor when compared with industrialized nations. to manage a program of grants and contracts to " 'Appropriate technology' II as used in this chapter existing research institutions around the world; means technology that is optimal for a particular "-creation of a private international research situation in a particular developing nation, given that center. with financing support from governments and nation's economic and social conditions and goals.For private sources. governed by a distinguished multi­ example. if a nation's overriding goal is to maximize national board of directors and shielded as much as national income. the technologies used should be those possible from political influences; that are most efficient. given relative factor costs "-creation of a research center or expansion of within the nation. If. on the other hand. a nation's existing research capabilities within an existing inter­ goals stress creating jobs over maximizing national national institution such as the World Bank." income. more labor-intensive technologies might be chosen. Indeed. for many nations this would imply Energy. "Unexploited energy resources exist in technologies that are capital-saving and-or labor-, every country - nonrenewable fossil fuels such as intensive compared to corresponding technologies petroleum. coal. natural gas and peat; nuclear and used by industrialized nations. It would also imply geotherman resources; or renewable resources based technologies that are relatively easily learned by

12 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-1 6. 1978 workers with no prior industrial training or demonstrate effective approaches to providing these experience and technologies to produce goods that are services widely and at low cost ...would emphasize less specialized, simpler to use, and more versatile preventative services (including nutrition, family that similar products made in the industrialized planning, and environmental sanitation), relatively nations." simple technology, and extensive use of community health workers and other paraprofessionals, along Negotiation on technology imports. " ... The U.S. with intensified training for physicians in delivery of should sponsor workshops to develop negotiating primary health services. Many small-scale programs skills. Such workshops are currently offered at along these lines have worked well, but with such Georgetown University and Harvard University, for notable exceptions as those in the People's Republic of example. The UN also sponsors such programs ...It China and Cuba, few have been effective on a large might be desirable to hold some of these workshops scale. directly under the auspices of an international "Given the nature of the needs in the fields of health, organization such as the World Bank or UN agency. nutrition, and populati on, the initiatives ...Technolog y transfers may have negative impacts recommended are somewhat more concerned with on the United States as a whole or on certain 'soft technology'

2. Why appropriate technology can't work

One of the most authoritative voices against environ­ in the advanced and the developing sectors actually mentalism in general and appropriate technology in achieved their current success. particular is that of the Fusion Energy Foundation, a From this description of the goals and methods of nonprofit organization devoted to the encouragement development, it follows that the criterion for develop­ of the most advanced technologies. The August 1978 ment strategy is the maximization of the rate of issue of the Foundation's journal, Fusion, carried a development. Our aim must be to maximize the rate of statement on appropriate technology and its antidote, increase of labor power or productivity, and thus the titled "World Development Requires the Most rate of increase of the overall social surplus. Advanced Technologies," portions of which we From these very elementary considerations it can excerpt here: be seen that the strategy of appropriate technologies is not one that encourages development. The very basis of this approach is to maximize the labor The primary goal of development is to increase the intensiveness of the technologies employed in the standard of living and educational level of the popula­ developing countries; in other words, to minimize tion. The only possible way of increasing per capita labor productivity. By attacking the very motive force consumption is to increase per capita production - of development - increases in labor productivity - the productivity of labor. In turn, the productivity of Such a strategy necessarily preserves existing labor can be increased only by the application of new backwardness .... technologies that substitute inanimate energy and machinery for human labor. By increasing produc­ tivity, such new technology increases the standard of The failure of appropriate technology living directly. At the same time, by reducing the time What, in fact, will be the conseque!lces of widespread the society as a whole must work to maintain the implementation of a policy of labor-intensive develop­ current level of consumption and the existing means ment? What is proposed is the mere extension of the of production. increased productivity generates a present low levels of productivity to a wider propor­ surplus that is available for expanding the economy as tion of the existing population-an increase in the a whole. The combination of increased consumption intensiveness of labor by the population as a whole. At levels and increased leisure time available for educa­ the very best such a process can result in only very tion makes possible the production of a more highly modest increases in production in proportion to the skilled workforce, which, in turn, allows the additional labor employed, increases barely sufficient implementation of still more productive technologies, to cover the increased consumption necessitated by continuing the cycle of growth and development. Such productive output. No added surplus is generated, and is the process by which the most developed economies thus no basis for continued growth produced. In fact,

Oct. 10-16, 1978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 13 the real situation is considerably worse. since any industry must be introduced by a concentric-circles fixed level of technology tends to exhaust the process that upgrades the entire workforce. The core resources available to it. For example. existing of such a process will be regional industrial centers. supplies of low-technology fuels such as firewood are using combinations of nuclear and fossil fuel and already nearing exhaustion. Such limitations rapidly hydroelectric energy to drive advanced-technology force upwards the cost of a fixed technology. leading heavy industry (for example. primary processing to increasingly rapid declines in overall productivity industries) . These centers will utilize the available and. therefore. in the standard of living. We conclude skilled workforces in parts of the developing sector. that even very modest "basic needs" cannot be met by Surrounding these centers will be secondary centers the use of low-productivity technology for any length of light industry. more closely linked to rural areas of time. Furthermore. the extension of labor time at (such as food processing) . Around these secondary current wholly inadequate levels of productivity and urban hubs. in turn. must be regions of advanced consumption must lead to the actual destruction of agricultural development. present labor power on a large scale. In this manner. a relatively low-skilled population How. then. can such a policy appear to be can be progressively drawn into industries requiring a economical in terms of the low cost of labor? It is clear higher and higher level of skill. While each industry that this argument is premised on the preservation of maintains the highest possible level of productivity the very conditions of misery that development aims and capital intensiveness. the combination of to alleviate. Only if the cost of labor is calculated at industries of relatively lower and higher skill levels the present grossly depressed wage levels can labor­ provides the basis for a continuous upgrading of the intensive methods compete with more productive. total population. capital-intensive ones. But precisely these grossly The combination of nuclear energy development depressed levels are the principal hindrance to and regional industrialization can provide the basis development. By the accurate measure of the for rapid rates of development in the developing resulting growth rate. capital-intensive methods are sector. as similar policies led to the industrialization far more economically effective than labor-intensive of the advanced sector. It should be noted that such a ones. policy is ideally and uniquely suited to reenergize the In other words. appropriate technologies are only currently depressed industries of the advanced sector appropriate to the existing level of backwardness; (such as steel) and to generally achieve a high rate of they are wholly inappropriate to the task of develop­ exports from this sector to the lesser developed ment.. .. countries.

Capital-intensive development Appropriate financing Capital-intensive development is premised today on Capital-intensive development is not only technically two interrelated policies. First. to provide the energy practical but also financially practical. The objection supplies necessary to sustain development. we must that large-scale importation of capital is impossible is accelerate the implementation of existing nuclear based on the assumption of the current high-interest. energy technologies and put the development of the short-term financing. Since capital-intensive develop­ breeder and of thermonuclear fusion on a priority ment. although relatively rapid. begins to pay for basis. Second. in the developing sector region wide itself only over a period of 15 to 20 years. such short­ centers of industrial development must be created to term financing precludes large-scale capital imports. act as the focus for high-technology industrialization. If such financing is assumed. then indeed only tech­ It is clear that without the development of nuclear nologies involving few imports - in other words. energy. insufficient resources exist to power capital­ labor-intensive - are possible. intensive development for any length of time. In fact. this is the real reasoning behind the appro­ n However. existing fission technologies can sufficie tly priate technologies strategy - such technologies are expand and supplement energy supplies to ensure those appropriate to existing financing schemes ! adequate energy growth for the next decade and a Indeed. it was only in the early 1970s. when interest half. By the end of that period. liquid metal breeders rates on loans to lesser developed countries rose and fission-fusion hybrid reactors must be on-line. and rapidly and payment terms shortened. that the idea of controlled thermonuclear fusion reactors could begin appropriate technologies received widespread to be introduced. assuring a virtually unlimited supply attention. However. if the primary aim is rapid of cheap energy for the future. An international de velopment. then it is necessary to create program to develop fusion power within the next appropria te fin ancing - the provision of very long­ decade. a technically feasible objective. therefore. is a term. very low-interest loans and credit arrange­ necessary aspect of any sound development strategy. ments that are suitable to capital-intensive develop­ In the developing sector itself. capital-intensive ment.

14 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-=16.19 78 3. The genocidal resu lts in Bangeldesh

Victims of the severe floods that struck Bangladesh in June 1975, according to the government, an late 1974 have unwillingly become human guinea pigs unspecified number of Bengalis were paid 31,000 tons for one of the largest-scale and cruelest experiments of wheat for 11.43 million man-days of work to repair in labor-intensive "appropriate technologies." 871 miles of embankment, 1,091 miles of canals, and Initially, impoverished Bangladesh attempted to 2,376 miles of road. cope with the flood relief chore by setting up 6,000 From January to June 1976, man-days spent in gruel kitchens throughout the country, to help with the work-for-food projects were increased to 75.27 million, daily feeding of some 4.5 million people who were involving efforts by 2 million workers on 2164.15 miles homeless or had had their crops destroyed. But 1974 of flood embankments, 2166.43 miles of canals, and 900 was a year of international austerity, and Bangladesh, miles of roads. For 1977, the government projected a one of the poorest of the developing sector countries, further increase to "3 million job opportunities" was soon unable to find the foreign exchange to sustain involving 94.52 man-days of work. even this miserable level of relief. Women have also been impressed into the program. Bangladesh turned for help with its food problems to States a 1976 government report: "In Bangladesh a United Nations operation spawned out of the women do not traditionally work outdoors. But the Kissingerian 1973 World Food Conference, called the practice is fast changing both due to social World Food Programme. development and economic compulsions. In April­ The World Food Programme's solution: a massive May, 1975, up to 30 percent of labour force in some "Food-for-Work" program. Accordingly, the relief Food-for-Work projects in Bangladesh were women. programs were condemned as demeaning, and, in the Schemes have been worked out for greater words of a Bengali government report, "the gruel opportunities for women to participate in food-for­ kitchens were, therefore, closed down, alms and doles work during 1976-77 season. Besides, Day Care in all forms were discouraged and Food-for-Work Centres would be set up at different projects to take programme was initiated (sic), bringing radical care of the children while their mothers work in the change in the scope of relief." field." Under the conditions of the program, which is now One of the more grisly aspects of the program is that administered jointly by Bangladesh, the World Food "family planning stalls" set up on the work-for-food Programme, and CARE on behalf of U.S. AID, sites are used to perform surgical sterilization Bengalis earn approximately 6 pounds of wheat for procedures on the Bengali workers. excavating over a ton of earth - by hand. Noting that All this, says the government, "has instilled a sense one of the goals of the program is "to check inflation," of pride and dignity of labour among the poor who the government boasts that "one of the major factors would otherwise have to depend on charity. They now in the success of Food-for-Work Programme in welcome the opportunity to work hard for a living - Bangladesh" has been "paying food wage at less than and hard work it is indeed - excavation of 70 eft. of half the rate of normal wage." earth which weights over a ton - for only 2.8 kg. of If the government or one of the agencies wheat." participating in running the program has made More candidly, Lewis Simons reported in a March studies of the nutrition levels or living standards of 29, 1976 article in the Washington Post: "As always in workers in the program, the results are a closely projects of this magnitude, the overall figures are far guarded secret. But the average caloric intake for all more impressive than the benefits to individuals. Bengalis is already down to 1700-2000 calories per day Even as the digging goes on, workers complain about - half what an active laborer needs and well below being cheated of their full rations, of poor quality food acceptable minimum nutritional levels. and other inequities." Proj ects carried out under the program center But most disastrous for Bangladesh, "Food-for­ around road-building, construction of flood Work" and similar programs are destroying the embankments, and rebuilding of canals. All work is potential for the country to industrialize, and break carried out by mass coolie labor using the most the cycle of poverty and labor intensive technology minimal equipment : primitive hoes for digging and which led to the flood and famine disaster in the first wicker baskets for earth-moving. From January to place.

Oct. 10-1 6. 1978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 15 4. Kissinger and the Brandt Commission

Th e Brandt Commission 's role as the enforcer of for transfer of technology from the advanced sector to Henry Kissinger's "development policies" is well the developing sector - the basis for new North-South known in the Th ird 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 In dian weekly New Wave. Th e article, by Leela establishment of a new international economic order. Narayan, appeared in New Wave 's Sept. 17, 1978 issue. 'Talking to death' Under flimsy cover of a so-called Independent Kissinger's game. as the New York Ti mes admitted in Commission on International Development Issues, an unusual love for truth in June 1977. was to "talk World Bank President McNamara and Social them to death." The Brandt Commission now intends Democrat Willy Brandt of West Germany 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 South " 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 " de industrialization 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 York. ostensibly constituted to promote a revived "North­ Kissinger's genocide plan was embodied in two South" 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 Wa shington Post. Peter sponsored IRB scheme. sanitized through the United Peterson of Wall Street's Kuhn Loeb 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 Robert 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 Economic Cooperation (CIEC) . in the spring of 1977 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 Europe ....

16 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 'Sudpolitik' expanding world trade in a developing economy. To Based on this understanding of the Third World. the sell this fraud, Yugoslav commodities expert at the Commission's blueprint. due to be released next World Bank, Dragoslav Avramovic , has joined the month. can be expected to stridently sell the following Commission. lines to the developing sector. An anti-technology pro-disarmament stance. This The World Bank's version of the interdependence of attempt is to be heavily focussed with the UN special the North and the South. According to Brandt himself. session on disarmament held in New York in May. who unashamedly uses straight World Bank Informed sources indicate that there is considerable terminology, this means "fulfilling the basic needs of pressure on key developing countries. such as India all Third World countries, within the framework of and Cuba, to take a "moral" position on disarmament orderly growth in both developing and industrialised by reducing their conventional arms. countries ...after Ostpolitik now Sudpolitik." The Alternate energy development. The Brandt "basic needs" formula is mouthed by many Third Commission will try to scuttle nuclear energy World social democrats in terms of "appropriate development programme in favour of solar energy, technologies" and "orderly growth" in the developed the first tied to a growing world economy, and the nations. This is a frontal attack on all advanced latter to the backward energy needs of village nations. such as Japan, which are oriented towards economies.

Appropriate technology at work A survey of seven villages

Dominican TASK Republic Ethiopia Micronesia Nepal Niger

Planting hand hand hand hand hand

elect ric occasionally hand Irrigating pump by gravity none none (with scoops)

Harvesting hand hand hand hand hand

copra in sun; Preserving none sun dry fish salted or sun dry sun dry smoked; bread fru it buried

town pipes, wel l, ru n-off, stream Drinking water water trucks stream wel l with nearby well bucket or pump

electric, mainly kerosene, kerosene, pitch pine, lighting kerosene lam p straw flashlight ra rely kerosene kerosene

cart , ox women, hand , boat, hand , Hauling tractor animals hand-cart porters animals

manure, compost; Fertilizing N.A.* none N.A.* chemical none by hand

• Not available Source: Overseas Development Council

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 17 5. From the u.s. debate on development

That the appropriate technologies strategy is responsible only to the President. Gordon explained in murderous for the developing sector and economically congressional testimony that "there is a tension in (and otherwise) suicidal for the industrial nations is American aid agencies which goes back many years. recognized by many in America's government. even between officials committed to quick results. and by some long-time "development bureaucrats" in the those concerned about our lack of knowledge for State Department. AID. and other agencies. achieving such results." Taking development policy Therefore much of the organizing effort around the out of the hands of the former is necessary to open the UN conference in particular and appropriate tech­ field to innovative strategies emphasizing "quality of nologies in general has been devoted to pushing aside life." not technology and economic growth. any opposition forces. or even those who may not go Second. development aid is to go only to the poorest for these policies quickly enough. countries. The "RLDCs" - relatively less developed A milestone in the campaign to make the countries - that might be within shouting distance of Administration safe for appropriate technology was real development are to be left to existing institutions the November 1977 "Interim Report on U.S. Develop­ like the World Bank. Brookings advises. Moreover. ment Assistance Strategies" issued by the Brookings the aid to the truly poor nations must be kept small Institution. Author Lester Gordon. of the Harvard ("rationed." in Gordon's phrase) . because "if it Institute for International Development. spelled out becomes substantial. it is likely to discourage the kind two primary goals : of economic policies which would enable it to survive First. all development policy should be removed on its own." from the hands of the State Department. the Congress. and any other bodies that might fail to be A counterproposal from industrialists appropriately tough on the Third World. and put into In contrast to both State Department muddling and the hands of a new Development Cooperation Agency. "appropriate technologies" superagency proposals.

From proposal to policy: Sec. 102. Development Assistance to help the poor majority of people Policy. . ...Provision of develop­ in developing countries to partici­ the Humphrey bill ment resources must be adapted to pate in a process of equitable the needs and capabilities of growth through productive work, The principles laid out in the Stever specific developing countries. and to influence decisions that and Brookings reports were given United States assistance to shape their lives ... legislative form by one of the countries with low per capita Activities shall be emphasized giants of British-brand . 'social incomes which have limited access that effectively involve the poor in consciousness " in the U. S .. Hubert to private external resources development, by expanding their Humphrey. and introduced after should primarily be provided on access to the economy through his death as the International concessional terms. Assistance to services and institutions at the Development Assistance Act of other developing countries should local level, increasing their 1978 by Senators Sparkman and generally consist of programs participation in the making of Case in January. Now part of the which facilitate their access to decisions that affect their lives, foreign aid bill. it is a waiting private capital markets, invest­ increasing labor-intensive Carter's signature, and he is ment, and technical skills .... production and the use of appro­ expected to sign it this month. Bilateral assistance and United pria te technology, expanding However, the provisions calling for States participation in multilateral productive investment and an organization bypass of the State institutions shall emphasize services out from major cities to Department were not passed; programs in support of countries small towns and rural areas, and hence Carter's move to accomplish which pursue development otherwise providing opportunities this without Congress by strategies designed to meet basic for the poor to improve their lives expanding AID head Gilligan 's human needs and achieve self­ through their own efforts .... powers. sustaining growth with equity. The Here are excerpts from the text Congress declares that the Sec. 201. Bilateral Development of the bill as it was originally intro­ principal purpose of United States Assistance . ...Ass istance from the duced: bilateral development assistance is United States shall be used in

18 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 there is another plan on the table. The industrialist of prominent industrialists, proposed a high­ faction in the U.S. is trying to secure government­ technology export drive. Their report pointed out that private cooperation for high-technology exports. this would not simply take away existing markets Illinois Democrat Senator Adlai Stevenson III and from. for example, Japan, but expand world markets Delaware Republican Congressman William Roth are for exports. and would help stabilize the dollar. In supporting the creation of a new cabinet-level depart­ response, and with prodding from trade Ambassador ment to promote high technology exports to be called Robert Strauss, the Administration set up an export something like the Department of International Trade task force. But due to sabotage from the Treasury and Investment (DITI) ' The new department would be Department, the task force never amounted to very consciously modeled on Japan's Ministry of much. International Trade and Industry, MIT!. Hearings The proposed "appropriate technology" super­ were held on this proposal several months ago, before agency is. among other things. an attempt to divert Stevenson's International Finance subcommittee of the industrialists' effort for a cabinet-level export the Senate Banking Committee. Only last week, Roth department. The latest statements and proposed introduced legislation to set up a foundation to pro­ legislation of Stevenson and Roth indicates that the mote high-technology exports, while Stevenson pro­ industrialist faction has not fallen for the gambit. mised to submit similar legislation to the Senate. The Stevenson-Roth momentum directly attacks the Brookings: no technology for the Third World "appropriate technology" mentality. As Stevenson Indeed. like most appropriate technology tracts. the told the Chicago Daily Defender, Sept. 12, "That Brookings report is fairly direct in expressing its concept - appropriate technology - is a very opposition to industry in general and U.S. industry demeaning one to the less developed countries." exports in particular. In his congressional testimony. Behind Stevenson-Roth and their congressional Brookings's Gordon explained that the purpose of the allies lie the industrialists of the Midwest and mid­ Brookings plan was to keep technology. as it is Atlantic regions. Last year, at a time when Treasury generally understood in the advanced sector, out of Secretary Blumenthal was pushing protectionism the Third World's hands. Even machinery and equip­ against Japan and Europe and talking down the ment cast-offs from the U.S. are too "technical" for dollar, the Chicago International Trade Club, a group the RLDCs. let alone the LDCs, he said. And anyway,

support of, rather than substitution increasing their production and nologies appropriate for develop­ for, the self-help efforts that are conservation of energy, through ing countries. essential for successful develop­ such means as research and ment programs, and shall be development of suitable energy Sec. 701. Establishment: Principle concentrated in those countries sources including relatively small Officers. The Administration shall that take positive steps to help scale, decentralized renewable be headed by an Administrator themselves .... energy sources, conservation who shall be appointed by the United States development methods, collection and analysis of President, by and with the advice assistance should focus on critical information concerning countries' and consent of the Senate ... problems in those functional potential supplies of and needs for sectors which affect the lives of the energy, and pilot projects to test Sec. 703. Administrative majority of the people in the new or unconventional methods of Provisions. .. .Subject to the developing countries : food production of conservation of provisions of this section, the production and nutrition ; rural energy, with due priority to be President. for a period of four development and generation of accorded to earliest practicable years after the date of enactment gainful employment : population development and use of energy of this Act, may transfer to the planning and health ; environment technologies which are environ­ Adm inistration any function and natural resources ; and mentally acceptable, require (including powers, duties, activi­ education, development minimum capital investment, are ties, facilities, and parts of administration, and human most acceptable to and affordable functions) or any other department resource development. ... by the people using them, are or agency of the United States, or simple and inexpensive to use and of any officer or organizational maintain ... entity thereof. which relate Sec. 205. Selected Development Programs in cooperation with primarily to the functions. powers, Programs. ...Programs to help developing countries to promote and duties of the Administration as developing countries alleviate the development and dissemina­ prescribed by this Act.. .. their energy problems by tion of intermediate and other tech-

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW THIRD WORLD 19 why indulge in capital investment when we need the urban. high-technology curative services are kinds of technologies that will keep hundreds of poor unlikely to help the masses of people in rural natives employed? In the LDCs "the E:ndowment of areas. or even the poor in the cities. whose labor as compared to capital is more abundant." he dominant health problems are largely environ­ explained: mental in origin .... so it really does not make much sense. in strict Similarly. expansion of university education. economic efficiency terms. for these countries to which is typically free in poor countries. deserves adopt highly capital-intensive activity when it has deemphasis in comparison with rural literacy or so much cheap labor. out-of-school programs. The high-cost. urban­ Since a lot of our technology essentially is so centered. high-technology programs are what capital-intensive. so much of it is inappropriate international assistance has tended to emphasize for these countries ...The inappropriateness of a because that is how Western technology is more lot of our technology shows up particularly on the easily transferred. The challenge is to develop farm. where tractorization tends to lead to higher­ low-cost delivery systems that will meet the needs priced products and to a great deal of of substantially more people with any given unemployment. amount of funds .. .. But the report itself makes it a point to say that. It should also be remembered that U.S. foreign despite appearances. it does not oppose economic aid strategy should reflect the fact that its growth per se: capacity to help is limited by factors within the While growth has been reasonably well served developing nations themselves. Explicit (in the Third World !-ed.). basic human needs recognition of this fact should mute excessive have not. It should now be possible. without expectations and ensure that highest priority in sacrificing growth. to serve the needs of the poor allocating assistance funds goes to nations majority better than in the past . . . (There is a) following sound growth with equity policies. tendency to equate these new and legitimate The Brookings report recommends that the Agency imperatives with an 'anti-growth' policy. We for International Development (AID) be dissolved into believe that economic growth remains the under­ the new Development Cooperation Agency. a step that lying means by which satisfaction of human needs would require congressional approval. In mid-May is made possible. Simply put. the problem is how large can and should assistance be for the direct President Carter went a good part of the way by naming John Gilligan. the head of AID. as chief provision of social services. We believe that the coordinator of all assistance and related economic size should be limited by each country's capacity in the long run to generate the revenues needed to policies supervised by federal departments ranging sustain them. That capacity will be largely the from the State Department to the Office of Science and Technology - a move requiring no congressional result of the productive activities that are initiated ...we urge that priority be given to the okay. Gilligan will be Carter's leading advisor on expansion of employment opportunities and the development affairs and the Administration's chief redirection of health. education. and other social development spokesman to Congress. programs away from a high technology. urban. In his testimony. Gordon had stressed. however. and elite orientation towards low-cost services to that a thorough clean-out of the old-line development the rural masses. men in AID and other agencies - those responsible for In his testimony. Gordon went on to explain that in the Nixon Administration's "Rogers plan" and other the case of a nation that insists on inappropriate relatively sane development initiatives in the past - capital-intensive methods. or is not sufficiently was necessary if Brookings's proposals were to come committed to the Brookings version of "growth with into their own. The change to a DCA structure. he said. equ,ity." "we should lay back" - that is. refuse funds has to be more than "playing musical chairs." and assistance. "Unless the change makes possible a substant ial The report continues: increase in flexibility for hiring and getting rid of Expansion of the kinds of education. health. and personnel. then I see not much point to it." Perhaps. other social programs now underway in the he suggested. real autonomy could be guaranteed by developing countries is likely to help the poor only making the DCA a "Department of Development" marginally. Health programs which emphasize with its own Secretary.

20 THIRD WORLD EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16, 1978 After Camp David, war over Lebanon?

Th e grim fr uits of the Carter Adm inistration 's fa ilure

The worst fighting in Lebanon since the 1975 civil war announced Carter initiative (for a "new charter" for has plunged that country into total chaos. Backed by Lebanon. without Soviet and Palestinian participation Israel, Christian warlord Camille Chamoun and his - ed.) through the greater deterioration of the roving bands of fascist militiamen have triggered the situation. " current crisis, by far the most dangerous in Lebanon's The current Lebanon explosion was ignited by beleaguered history. Falange-Chamoun attempts to prevent Syria from The deadly situation in Lebanon has arisen from the carrying out certain tactical evacuations in Beirut deliberate failure of the Camp David summit, and in buildings. evacuations that, according to Cuba's particular of the Carter Administration, to push Prensa Latin a. would have "prevented a pretext for through a formulation for a comprehensive settlement new (Falange) provocations." of the Middle East dilemma. In the absence of such an The Chamounists then launched what they called "a overall approach, the Lebanon situation has remained fight to the death," carrying out "suicidal dangerously unresolved, a cocked trigger for an Israel-Syria confrontation that threatens to rapidly escalate into a full-blown Middle East war. Henry Kissinger, the architect of Camp David and Syrian leader: Kissinger killed Faisal the driving force behind the Carter Administration's suicidal confrontationist course, is looking to a war In 1975. Saudi Arabian King Faisal was over Lebanon to help stem the accelerating motion assassinated. A leading spokesman for an Atoms toward the consolidation of a new world monetary For Peace development approach to the Mideast system to replace the bankrupt International Mone­ crisis, Faisal had consistently thwarted then tary Fund. Moreover, a Lebanon confrontation would U.S. Secretary of State Henry Kissinger's plans also thwart ongoing Arab diplomatic efforts to unify to separate Egypt from the rest of the Arab the Arab world against Camp David and isolate world and move towards the partition of Egyptian President Sadat. Lebanon. In obstructing Arab unity and the European Now Syrian Defense Minister Mustapha Tlass Monetary System, Kissinger and his cohorts hope to has charged that King Faisal's death was maintain enough leverage in the Middle East to carried out under direct orders from Henry reshape the region into an anti-Soviet, NATO-style Kissinger. Middle East Treaty Organization that would poli­ Then as now, Kissinger was the architect of a tically ensure the continued economic domination of separate Egypt-Israel peace and the destruction the region by the IMF and allied financial institutions. of the Palestinian population of Lebanon. Kissinger's strategy would also clear the way lU1 The following are excerpts from a statement "balkanizing" each country into feuding sectarian Tlass made before Syrian military cadets, as camps to weaken various central governments and reported by the Portuguese daily 0 Diario Sept. thus maintain top-down control over the region. 29, 1978 : "Tlass affirmed that the assassination was Horror in Lebanon carried out by orders of ex-State Secretary Chamoun and his Israeli patrons are going for broke. of the U. S. Henry Kissinger. "We are determined to continue the war until the "After praising the late monarch for his withdrawal of the last Syrian soldier from our comprehension of the Syrian nationalistic territory," ranted self-avowed Nazi worshipper position,' Tlass then turned to Egyptian Chamoun. "If there is no intervention from the President Anwar Sadat asking: "'Do you civilized world, chiefly the U.S., the fighting will go want me to remind you who killed him? He on." was killed by the American secret services According to As Safir. a Lebanon daily. Chamoun under orders of his friend Kissinger.' " and his henchmen are "trying to accelerate the

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW INTERNATIONAL 21 provocations" against Syrian peacekeeping forces fessionals, and intellectuals announced "total stationed in Lebanon. opposition" to the Camp David agreements, declaring The Syrian response, in the face of this onslaught, them to be in "blatant" contradiction with the will of was swift and overwhelming, reflecting a strategic the world and the national rights of the Palestinians." decision on the part of the Syrian government to no None of the leaders will participate in the local longer tolerate Chamounist Israeli provocations and governing councils that the Camp David accords call to eliminate the rightists' sources of political and for. The leaders reiterated that only the Palestine military power. Liberation Organization can be considered the legi­ After only three days of intense fighting, the Syrians timate representative of the Palestinians. had dealt the Chamounists a heavy blow. The two bridges linking East Beirut to the port of Junieh, the Franco-Arab diplomatic offensive source of supplies for the rightist forces, were taken A double-pronged offensive led by France, Saudi by the Syrian troops. The Christian stronghold of Arabia, and Iraq is currently underway to stabilize the Ashrafiyeh in East Beirut was bombarded by Syrian Lebanese powderkeg and at the same time pull Sadat shells, while the Syrian navy shelled Falangist­ and Egypt out of the Camp David quagmire. This Chamounist coastal positions. coordinated Franco-Arab strategy is aiming at the While the Kissinger-allied press is running com­ nullification of the Camp David separate peace agree­ mentaries about "Syrian genocide against the ment between Egypt and Israel as the immediate Christians," Chamoun and his allies are responsible precondition for a resolution of the Lebanese crisis. for the murder of Lebanon's Christian population. The The manner in which the Arab world has chosen to Oct. 3 Wa shington Post quoted a Chamounist militia­ resolve the Mideast crisis is based on a war-avoidance man, who had admitted to receiving two years of perspective of economic development. This approach military training in Israel. "It's them Cyrus Vance and his understudy Alfred Atherton to common danger in Lebanon," i.e., Israel and the convince them otherwise, both Jordan and Saudi Falange. Arabia have made it clear that Camp David was and is In the last 48 hours the French government of not the framework for a Middle East peace. Giscard d'Estaing has moved decisively to intervene Similarly, West Bank Palestinians have refused to into the Lebanon bloodbath . Seen within the overall be wooed into supporting the Camp David accords. context of a UN initiated peacemaking role, France's Following a meeting in Jerusalem, 100 leading West initiative has received the support of UN Secretary Bank Palestinian mayors, civil administrators, pro- General Kurt Waldheim. The French plan, which calls

22 INTERNATIONAL EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 for an immediate ceasefire and the expansion of the President Carter - perhaps made over-confident by Syrian-dominated Arab Deterrent Force with Saudi his experience at Camp David - thinks that a general and Sudanese troops. also provides for a mixed conference on Lebanon could settle the affair. The Christian-Muslim Lebanese army unit to act as a truth is that it could not. without taking into account buffer between Falangists and Syrians in East Beirut. the context in which it takes place: either the Already Radio Israel is reporting the French plan as Lebanese will agree together to organize coexistence the "Franco-Saudi" proposal. because of d'Estaing's between their different communities and with the meeting with Saudi Foreign Minister Prince Saudi in Palestinians. who will inevitably stay on their Paris on Oct. 4. territory until their problem has been settled ; or In an interview on CBS on October 5. U.S. Secretary Lebanon will remain a closed camp of forces of State Cyrus Vance warned that it was increasingly confronting each other in the interminable Israeli­ difficult to restrain Israeli intervention into Lebanon Arab conflict. and called for an immediate implementation of the French plan. In addition. Vance called for an Arab In an interview with French radio correspondents at summit of the Arab members of the Arab Deterrent the United Nations Oct. 3, French Foreign Minister Force (United Arab Emirates. Sudan. Saudi Arabia Louis de Guiringaud outlined his proposal for a cease­ and Syria) to discuss the French strategy. firear rangement in Lebanon in the following terms:

On the basis of the conversations that I have had France criticizes Camp David, with officials (from Kuwait, Lebanon. Saudi Arabia. Syria and others - ed.). I suggested last night a proposes its own plan process to try to reach a cease-fire in Beirut. an effective and lasting cease-fire. Because. before In an editorial published in Le Figaro Oct. 3. foreign trying to deal with the problem of Lebanon. we have to affairs analyst Paul-Marie de la Gorce places the stop the fighting. stop the massacre. And this process current events in Lebanon in the context of the would be the following: it would consist of a separate deal worked out at Camp David: redeployment of the Arab deterrence forces in Beirut. and the interposition between this Arab force and the Let us take things as they now stand. The fact is that Christian militias of elements of the Lebanese army the Syrian army will not tolerate on its rear flank the made up equally by Christians and Muslims in the existence of Maronite militias. whose leaders - no hope that this would permit an end to the fighting. one ignores - have been in contact with Israel since I have even proposed that the French Ambassador the civil war began ....They are pressed into action in Lebanon and some of his collaborators take part. as to the extent that President Sadat's policy has brought witnesses. in the talks between military commanders about the near-disappearance of the "southern front" in order to guarantee that there be no future of the Israel-Arab theater and that Syria remains disagreement over the interpretation of what would be almost isolated on the "northern front." decided. . .. This (proposal) was immediately It was thus predictable that they would want to put accepted by the Lebanese authorities. ... Before an end to the existence of the Maronite militias, being able to talk about a conference which would suspected of links with Israel. This is what's discuss the future of Lebanon (President Carter's happening ....But what the patriarchs - Maronite. proposal for a conference - ed.). we must first stop Greek Catholic. Greek Orthodox - fear is that the fate the fighting. this is what we are committed to for the of the Christian communities as a whole will be linked moment. . .. What I am proposing is a French to that of the troops of Camille Chamoun and the initiative. which would not involve United Nations Gemayel family .... intervention ....

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW INTERNATIONAL 23 u.s. business ioins Ad min istration in Disneyland

Cinderella's Castle provided a fitting backdrop to the dollar collapse occurred despite central bank support year's most prestigious annual business conference, operations totaling several billion dollars in the first the International Chamber of Commerce, who days of October shows that the British scenario is in gathered last week at Disneyworld in Orlando, operation : American banks and multinational cor­ Florida. Posing for photographers on the fourth-floor porations are unloading dollars en masse, and British­ balcony of the Castle of the Magic Kingdom, President influenced Third World country central banks are Jimmy Carter told the 2,500 business leaders "diversifying" their reserves out of U.S. dollars. attending the conference that he had achieved peace At the close Oct. 4, the dollar stood at barely 1.90 in our time. West German marks, a 5 percent drop over the The International Chamber of Commerce meeting previous two weeks. The dollar is down for the count. was the largest of several major conferences over the Without drastic countermeasures, that is, a change in past week drawing business leaders into the fantasy­ Administration policy or a European assault against world of the Carter Administration. Before the ICC, the City of London, the dollar could be out, precisely as Henry Kissinger sprinkled "free enterprise" fairy­ the British have been demanding. dust, while Lehman Brothers-Kuhn Loeb chief Carter's decision to veto the public works bill executive Peter Peterson proposed to throw out the because it funds allegedly "unnecessary" water North-South dialogue in favor of a global Proposition projects is an indication that he is retreating further 13 program. Many ICC participants spent last week at into the magical belief that cutting government the International Monetary Fund annual event in spending will ip so fa cto cure inflation. As Senate Washington, a mass debauch of dollar-dumping. Majority Leader Robert Byrd angrily noted Oct. 3, in Since the capture of the Administration by the pro­ announcing that he will organize a Senate override of British faction around Zbigniew Brzezinski, Walter the President's veto, the public works bill funds Mondale, and so forth, through the Camp David projects which enhance overall real economic growth. fiasco, Carter has been straying farther away from American business morality has deteriorated to the the path of a sane economic policy laid down for him point that a British banking delegation can appear in by President Giscard of France and Chancellor the heartland of American industry, Chicago, and Helmut Schmidt of West Germany at the Bonn officially propose to wipe the dollar out as a reserve Summit last July, and deeper into the "fiscal currency. Speaking before an audience of Chicago austerity" trap which London has carefully set for the bankers at the Mid-America Club, a luncheon u.S. economy. sponsored by Continental Illinois Chairman Roger This week, two highly placed Administration Anderson, Bank of England official C.W. McMahon officials reported privately that the United States will gloated that the recent IMF meeting showed that the oppose the European Monetary Fund ...if it helps the dollar would have to follow the pound sterling down dollar ! The Administration hasn't taken an official the drain "sooner or later." McMahon said, "As an stand on the EMF, said one official, "but we would official, I have to say later. But we all know when have a major problem if it supported the dollar. We bankers get together and talk about sooner or later, it are also concerned that the arrangements are means sooner." The Chicago banks are wary, and " c:onsistent with doing a way with gold in the world know exactly what the British are up to, but they see economic system ... There can be no fixed rates. the British calling the shots in Washington, and there­ There must not be an attempt to determine the rate of fore are hedging their bets in that direction. the dollar. " If the IMF meeting and various sideshows such as With this psychotic attitude, it should come as no the British banking tour in Chicago succeeded in surprise that, despite Carter's pledges at the setting the dollar up for last week's butchery, Henry Disneyworld ICC meeting to defend the dollar Kissinger and his friends used the ICC event at vigorously, this Pitstweek, the U.S. currency went into Disneyworld to portray the post-dollar future. its worst tailspin in months this past week. Harvard professor John Dunlop, the ex-Labor Secretary, told the gathering that the postwar era of Back In the real world slow growth was finished, and at best. the world could Following the precise and unmistakable demands of look forward to a long period of slow growth inter­ British officials at last week's IMF meeting, the dollar nationally. fell to all-time record low levels against the West The "slow growth " argument is the rubric for the German mark and the Japanese yen. The fact that the austerity program that Britain and the International

24 INTERNATIONAL EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16, 1978 Monetary Fund openly demand for the United States. humiliation of the American Administration. Helmut Lehman Brothers-Kuhn Loeb chief Peter Peterson Schmidt. the London Financial Tim es noted Oct. 3. informed the ICC that the "strident rhetoric" of the "decided in the end not to attend this week's conclave. Third World had sabotaged the Third World. and. probably because of pressing business at home, but consequently. the North-South dialogue was finished. possibly because he was concerned at the potentially (After the full elaboration of Western Europe's Third adverse consequences for both his aesthetic sense and World development policy in the context of the Euro­ his public image. After all, it takes a man like Jimmy pean Monetary Fund. which includes the potential for Carter, feeling on top of the world just now, not to doubling of American exports. the fact that a business mind being seen in the company of Mickey Mouse and audience even permitted Peterson to finish his speech Donald Duck. " is shocking.) Virtually the same anti dollar speeches were Bluntly. Peterson was asking the U.S. business delivered in New York at a conference of the community to abandon its best chances of avoiding a American Productivity Center. General Motors dollar collapse. the Third World's capacity to Chairman Thomas Aquinas Murphy stated. "Govern­ profitably absorb American capital goods exports, in ment spending must be reduced." echoing the current favor of an international confrontation ! But the ICC view of the Administration. which threatens to veto tolerated Peterson, because the U.S. delegation at the additional funding for fast breeder reactor and fusion United Nations torpedoed a joint European-Soviet­ power development. the greatest possible contri­ Third World plan to re-initiate the North-South butions to American productivity ! dialogue under UN auspices. The order to likewise Ambassador Robert Strauss spoke at length on the torpedo the rest of the world's agreement came President's Export Program. announced last week. directly from Secretary of State Cyrus "Pinocchio" The plan will spend $500 million over several years Vance, who has been reportedly "brown-nosing" (against current export volume of $120 billion) a Brzezinski since the Camp David summit. program one senior Comm erce Department staffer Lazard Freres' partner, Ian MacGregor. picked up described as "like landing a single division at the theme of confrontation with the Third World. Normandy." demanding that the hated World Bank assume Since the U.S. hasn't had any increase in exports at sovereign authority over multinational companies' all, Walt Disney's Mad Hatter would have said, the contracts with Third World governments. President's program must mean more, because there couldn't possibly be less. London cheers Carter debacle The British press couldn't suppress delight over the

First National's Abboud Terms EMF "Prodollar"

An important indication tha t not all U. S. boost the dollar. I think the dollar is terribly businessmen and bankers have swallowed the undervalued. I guess I'm old-fashioned. but I line that the EMF is "antidollar " came this week believe in a strong dollar. ... from Robert Abboud. chairman of the board of the First National Bank of Chicago. In an Q: How do you think the Adm inistration's new exclusive interview given to Executive export enhancement program measures up ? Intelligence Review while in Ne w York for the A: We need a stronger export thrust. The American Productivity Center-Business Week Administration is still too committed to conference on "Inflation and Unemployment: ideological considerations: human rights. the Productivity Solution. " Mr. Abboud made environmentalism. etc. For instance, the the fo llowing comments: Japanese are beginning to view the U.S. as an unreliable trading partner because of the Q: What do you think of the European Monetary Administration's nuclear nonproliferation Fund ? program. We got the Japanese into the nuclear A: I believe it will work. energy field. and now we won't even guarantee them a secure supply of uranium. Because of Q: Then you don 't think it is directed against the this. they're being forced to look elsewhere, for doJlar ? instance to the Soviet Union. for uranium. This A: Absolutely not. On the contrary. I think it will situation has got to be turned around.

Oct. 10-16, 1978 EXECUTIVE INTELLIGENCE REVIEW INTERNATIONAL 25 Ignoring completely the cause of worldwide inflation-namely, the inherent inability of the IMF­ World Bank dominated international monetary American productivity system to support real economic growth and world conference : a ' Proposition 13 trade - Grayson instead called for a "national productivity effort which, in my opinion, is the single fo r productivity' most effective thing that this nation can do." "The prime source of growth is productivity," said Grayson. "If we are to have growth, reduce inflation, The hoary ghost of Adam Smith could be heard and create jobs, then there must be an increase in clanking down the halls of the New York Hilton productivity. . .. I propose a productivity October 3-4, as 400 businessmen gathered to hear solution. . .. Call it, if you will, Proposition 14: government and corporate leaders blame rising Productivity ...." inflation on declining productivity and urge a Grayson's theme was echoed by Thomas Murphy of nationwide Proposition 13-type movement to boost General Motors, who blamed "government spending productivity by ending "government interference in as the greatest single cause of this year's inflationary the free market" and slashing government spending. spurt" and called for the country to emulate the The occasion was a conference on "Inflation and "miraculous Mr. Jarvis (the sponsor of Proposition Unemployment : The Productivity Solution," co­ 13) by embarking on an anti-government binge . sponsored by the business-supported American Likewise, Thomas Raleigh, senior vice president of Productivity Center and Business Week magazine. Lockheed Corp., maintained that "the Jarvis Featured speakers included Federal Reserve sentiment is the national voice of the people. The Chairman G. W. Miller ; Barry Bosworth, director of theme of Proposition 13 is that the American people the Council on Wage and Price Stability ; Labor have had enough of Big Brotherism .... We need a Secretary Ray Marshall ; former Deputy Secretary of Jarvis-Gann initiative on productivity, unemployment State and Ambassador to Japan, Robert Ingersoll ; and inflation, a labor-industry coalition to boost General Motors chairman Thomas Aquinas Murphy ; productivity.' , Special Advisor to the President on Inflation, Robert Government regulation was hit by nearly every Strauss ; I. W. Abel, former president of the United speaker as a prime cause of declining productivity, Steelworkers Union ; and Robert Abboud, chairman of including by Fed Chairman Miller. Miller, who has the board of The First National Bank of Chicago. repeatedly insisted that the American economy would The conference is one in a series of seminars and benefit from a recession, put on his best probusiness lectures to which the U.S. business community has face and called for an "extensive reform of Federal been subjected over the past few months as part of an regulatory activities" and for devoting "a larger effort by London-centered financial networks to share of GNP to capital investment." prevent U.S. participation in the ready-and-waiting Miller hasn't reformed overnight ; he is just clever European Monetary System (EMS). enough to know that the deregulation issue is not only To bury the concept of government responsibility one of the easiest ways of diverting the business for industrial and technological advance, a concept community's attention from the real solutions to the central to the new EMS, London networks, through current economic mess, but it can be a very effective Kissinger, are manipulating the justifiable anger of weapon against industry, as the havoc wreaked on the businessmen strangled by environmentalism and tax airlines by rate deregulation amply testifies. policies into an undifferentiated assault against "Big While the speakers took pains to insist that Government. " productivity is not antilabor and does not mean speed­ This antidirigist, "free enterprise" sentiment up or wage cuts, the ruthless gouging of labor's living dominated the New York productivity conference. The standards is the bottom line of any productivity keynote, presented by C. Jackson Grayson, chairman program that operates within the antigrowth confines of the American Productivity Center and former of the current world monetary system. chairman of the U.S. Price Commission, set the tone. -Kathleen Murphy

26 INTERNATIONAL EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 .CONOM ICS )

Arabs, Japan, Soviets l ink up with EMS

New monetary order seeks war-avoidance-but where 's the U.S. ?

The French. West Germans. and Soviets are now integration. The first part of this report describes in closely coordinating their diplomatic and economic depth the wide range of Europe's activities to that end. activities to put into action the new Euopean Monetary Japan's government has come out with its own System and its policy of joint East-West development EMF -type arrangement. as the third article in this of the Third World. These countries and their allies in section details. urging tight collaboration with Japan. the Arab nations. and the Third World are continental European forces. developing Third World trying to exert the leadership necessary to avert war countries. and the OPEC states of the Mideast. and economic collapse - the kind of leadership for And Japanese Prime Minister Takeo Fukuda's trip which for so many years the world looked to the to the Mideast pointed to the other part of the United States. Japanese-European "Grand Design." when Sheik Yam ani offered direct shipment of oil to Japan. The following three-part report details how those bypassing the multinationals. in return for direct efforts took shape last week around the world. technology transfers. But Yamani's offer is by no It is now clear from reports of the just-concluded means restricted to Japan. as the OPEC portion of our Franco-Soviet trade commission meeting in Paris that coverage shows. the French. West German. and Comecon sector Forty years ago the Munich agreement was signed economies are being integrated at the highest levels. as the inevitable climax to the British-run economic The fact that the Soviets used the Paris meeting as the insanity of the 1920s and 1930s. Today the Western site of their announcement of a major nuclear deal Europeans. Japanese. Soviets. and OPEC nations are with Libya signals that joint development of the Third providing the leadership. where the U.S. has so far World is a major component of the East-West failed. to make sure there is never another Munich.

Europe : a shock treatment for Brzezinski

American National Security Advisor Zbigniew are now united around Chancellor Schmidt and Brzezinski arrived in Europe on Oct. 2 for a tour of President Giscard D'Estaing to resist the march of Western capitals. including Paris. Bonn and London. Brzezinski's oligarchical faction into economic expecting to armtwist Germany and France. He was depression and war. looking for support of a separate peace between Egypt From Brzezinski's standpoint. the trip could not and Israel. abandonment of Franco-German deter­ have been more ill-timed. It coincided with the mination to implement the new European Monetary Thirteenth Session of the Franco-Soviet Grand System and Fund. and a halt to expanded cooperation Commission in Paris. and the "notification" by the with the Soviet Union under the threat that West West German Bundestag of the 25-year German­ Germany's "self-Finlandization" might have to be Soviet economic cooperation agreement. Brzezinski's halted forcefully. worst nightmares about so-called Finlandization roll­ But instead. Brzezinski was treated to some of the ed on all week. most determined language from the German and In an interview with the newspaper Europiiische French governments to date. Excepting London. Zeitung. Chancellor Schmidt stressed a "Europe from which has already officially endorsed the Carter the Atlantic to the Urals" concept : Administration's proposal for a Lebanese "peace con­ France and the Federal Republic of Germany ference" excluding the Palestinians. Europe's leaders form a close partnership which will maintain

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW ECONOMICS 27 France and the Federal Republic of Germany create what one German source described as the form a close partnership which will maintain worst era of offical relations between West Germany continuity of EEC policies for the next year. and the U.S. in the postwar era, Giscard and Schmidt Europe is now able to raise its united voice in are using what means they have at their disposal to international affairs, and a large part of the influence the White House. According to sources close European Community's policy is cooperation with to the West German Foreign Ministry, the BRD and the East bloc nations and the Third World. As Europe is a greater Europe, because both Western France used last week's International Monetary Fund and Eastern Europe originated in common conference in Washington to discreetly set up cultural, but also economic roots, negotiations channels of communication with the White House with the Comecon are of key importance. independent of the normal channels controlled by Several days later, as reported in Die Welt Oct. 5, Brzezinski. Schmidt addressed a congress of historians in Similarly, when the Fra nkfurter Allgemeine Hamburg, warning against Christian-Social Union Zeitung alleged that West Germany fears an early leader Franz-Josef Strauss's belligerent use of the agreement between the U.S. and Soviet Union on theme of German reunification : strategic arms limitations (SALT) because it would I want to warn against sentimental use of the issue somehow leave Europe defenseless, Defense Minister of German reunification. . . . Europe cannot be Apel responded with a statement affirming that his limited to the area of the present European government "looks forward to a successful and early Community ...but has to be seen and understood conclusion" of SALT II. in its manifold unity ....We (must) contribute to The Franco-Soviet "Grand Commission," created the next chapters of history and thereby shape our when Charles de Gaulle initiated the era of "detente, own future. We must also make history, and not entente and cooperation" with the Soviet Union, just just conserve the past .. concluded its highly successful Thirteenth Session, But while Brzezinski and his Kissingerian allies are presided over by French · Prime Minister Raymond using their hold over the Carter Administration to Barre and Soviet Deputy Prime Minister Kirillin. In order to keep growth in trade moving toward targeted tripling between now and 1980 decided by Giscard and Brezhnev during their 1977 summit meeting, France The EMF versus the IMF has announced that it is ready to unblock up to 10 billion francs worth of credit "at a favorable rate," On Sep t. 26 the Italian financia l daily II Fiorino according to French Finance Ministry sources. published a pointed comparison of the European Among the firms that would be involved in new deals Mon etary Fund and th e British -backed are Pechiney-Ugine-Kuhlman (for a 3 billion france In ternational Mo netary Fund. Here are excerpts aluminum plant in Siberia), Technip (a gaslift plant in from the article entitled "EMF versus IMF. " which Siberia worth 750 million francs), and other projects was written by Antonio Lovato and datelined Paris. with Creusot-Loire, RhOne-Poulenc and Saint-Gobain. President Giscard d'Estaing and Chancellor In addition, agreement was reached on increasing Helmut Schmidt are determined, cost what it will ... joint research in fastbreeder and fusion energies, and to implement the plan for a "European zone of space cooperation. monetary stability" before the year's end ... Italy has committed itself .... Trade stems unemployment The EMF will end up being the alternative to the Interviewed on Soviet television at the conclusion of IMF with the following characteristics: the EMF is the Commission talks, French Premier Barre in favor of fixed parities, in opposition to the expressed satisfaction with the results in increased floating system that the IMF has accepted. The trade. But he added : EMF also has rehabilitated gold, while the IMF is You know that Franco-Soviet economic cooper­ for demonitizing gold .... The EMF would mean­ ation is not only economic but that it is for while become the dispenser of credits on a scale not Europe and for the world. I hope, for my part, that much below that of the Washington-based Fund. this Franco-Soviet entente, this cooperation The impression is that France and the Federal between our two countries, can be an important Republic of Germany will exert all sorts of­ factor of international detente, of peace in Europe pressures on Italy to make it enter in the monetary and in the world. It is with confidence that I zone ... envisage the future of our relations . . . British participation is still rather doubtful ... Hungarian government leader Janos Kadar is England prefers the IMF, which is accustomed to arriving in Paris Nov. 17 to meet with President giving her greater amounts of credit than any other Giscard, the First Franco-Hungarian summit since beneficiary .... England, whose gold reserves make before the Second World War. Trade deals lead the up only 5 percent of total reserves. agenda. Following President Giscard's visit last month to Poland, a French delegation is currently

28 ECONOMICS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 there negotiating a billion-franc deal for the sale of industrial development as the white workers do. nine French ships. This deal and those being In order to concretize this prodevelopment relation­ negotiated with the Soviet Union are explicitly ship with Africa, France has been instrumental in conceived in France as stemming the tide of an negotiating the diplomatic entente between Angola increasingly dramatic unemployment situation. and Zaire which was part of the "boomerang" effect of the British-Belgian instigated Shaba province crisis Picking up the pieces after Camp David this summer. This week the French firm Titan, whose France and West Germany are also giving the U.S. main clients include the French army and the Soviet lessons on how to run policy in the Middle East and Union, concluded a $6 million deal with Angola for a Africa. Contrary to U.S. policy, which has de facto slid cistern tank and industrial vehicle plant which will into acceptance of the Smith government's "solution" allow Angola to save $30 million in foreign exchange. to the southern Africa crisis, Europe is stressing the In the Mideast, the French are picking up the pieces need for economic development. Otto Wolff von before the Camp David debacle leads to war. Foreign Amerongen, leader of German private sector Minister Louis de Guiringaud, after consulting with industrialists, in addressing the German-South Arab officials, proposed from the United Nations a African Chamber of Commerce in Johannesburg Lebanese cease-fire formula whose immediate aim is emphasized that : to stop the bloodshed. Contrary to the hopeful If South Africa wants to get out of its economic assertions of Brzezinski and the State Department, bottlenecks, it will have to create about 200,000 France's proposal is emphatically not conceived as new jobs each year .... We have to reject any part of the Carter Administration's proposal for a con­ policies of embargo or blockade, because this ference that would leave out the Palestinians. In fact, would first hit those concerned, the black the French President is known to be working towards workers ....Apartheid is an obstacle to economic a Paris Middle East peace conference that would and industrial development in South Africa. The include the parties excluded from the Camp David South African government would do well to lift the talks. racial laws, to allow the blacks to participate in - D. Sloan and J. Sigerson

OPEC: direct oil for direct technology

Emilio Colombo , the president of the European Fukuda heading a high-level 50-man trade delegation Parliament, told a specially organized Italo-Arab to four oil producing states of the Persian Gulf had a dialogue in Rimini, Italy last week that the "Bremen dramatic effect on OPEC's policy vis-it-vis the dollar Aggreements ... must be extended to the Arab and future oil pricing policy. Following his talks with nations as well as the least developed countries." the leaders of Saudi Arabia, Iran, Qatar, and the Colombo's statement reflects the economic United Arab Emirates (UAE), the Emirates News, integration drive since the European Monetary Sept. 17 reported that Fukuda informed his cabinet System proposal at the Bremen summit last July. that : Euro-Arab economic integration for development is We have won an understanding from the leaders not new. Many of the technology transfer of the four countries either for a freeze on oil arrangements especially to Arab oil producing nations prices or the introduction of minimum increases have been actively pursued since the 1973 Mideast to prevent adverse impacts on the world economy. war. But since the Bremen accords there has been an It is in this context that the Saudis and other leading escalating process aimed at bringing the ongoing Ara­ members of OPEC have continued their unflinching ab-European economic dialogue to fruition. support for the dollar. Saudi Prince Abdullah, the A significantly new variant in economic cooperation second Crown Prince, told the Riyadh Domestic News negotiations with the Middle East oil producers is the service on Sept. 1 4: heightened role of Japan. The Japanese government is ...the currency muddle which governs the world closely coordinating with the West German and today cannot be dealt with by dealing blows to the French governments to procure expanded transfer of dollar, particularly now that the dollar has technology deals for the Mideast OPEC countries. In become a currency unit forming a basic factor in return, OPEC has begun to voice an unprecedented bolstering other currencies. We must not overlook policy of moderation on pricing and production of the fact that the fields of investment of the dollar crude oil, in the interest of world economic stability. are much wider than those of any other currency. We must also not forget the inflation from which Fukuda 's Persian Gulf tour the world suffers and the effect the dollar can The early September tour of Japanese Premier Takeo have in remedying it .

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW ECONOMICS 29 Pla tt's Oilgra m reported Sept. 28 that the OPEC counted any serious effect the controversial Camp nations were disturbed by the outcome of the Inter­ David Accords might have on OPEC pricing policy. national Monetary Fund (lMF) meeting last week, OPEC's Secretary General Ali Jaidah, on the and that no action was taken to resolve the world occasion of OPEC's 18th anniversary last month made monetary crisis centered on the falling value of the a powerful public statement from OPEC's Vienna currency. Pla tt's reports that OPEC and the other headquarters on behalf of the cartel calling for underdeveloped nations were critical of British transfer of technology from the advanced nations to be Chancellor of the Exchequer Denis Healey's demand stepped up as a price for OPEC pricing moderation: for the same kind of currency stabilization efforts Through our moderation in the exercise of the con­ which have prevailed until now. A reporter on the trolling power over prices and production of crude scene on the IMF parley indicated that many of the oil in our sovereign territories, we have hopefully OPEC and underdeveloped countries would like to banished forever the spirit of confrontation which return to some form of fixed parities between for so long bedeviled relations between OPEC and currencies to stabilize the dollar. He noted that these the industrialized consuming nations. countries are "getting a good sounding" from Europe In order, however, for us to be able to continue on the EMS as a means of achieving such currency to observe that moderation, we require something stability. in return, namely the cooperation of the west in reaching our aspirations in the downstream sector 011 for technology of the oil industry such as refineries, petro­ Saudi Oil Minister Sheikh Zaki Yamani told the chemicals, transportations. Japanese press, Sept. 12: Another strong indication that the Persian Gulf oil The door to deals for direct oil supplies could be producing states are planning to exert more opened by Japan's transfer of technology to Saudi independence in selling their crude through state-to­ Arabia and other oil producing nations ....Saudi state oil-for-technology deals came during a Sept. 20 Arabia needs Japan for industrialization and Arab OPEC (OAPEC) meeting. The nine OAPEC Japan needs Saudi Arabia for oil ...Saudi Arabia members announced from Saudi Arabia that has made a decision not to export oil directly preference should be given to Arab tankers in without reciprocation in technology transfer and delivering crude. Moreover, OAPEC will extend an cooperation in industrialization, with Japan being $80 million subsidy to the Arab Maritime Petroleum one of the few countries that can meet Saudi Transport Company to cover operating losses. Arabia's needs." Yamani is heading up a newly formed Long Range Unified regional development perspective Planning Committee within OPEC which is present­ The Arab League and the OAPEC are coordinating ly putting together for the first time, a 10-year regional development for greater effectiveness. production and pricing formula as part of a global OAPEC just produced a new five-year plan, which economic projection. Venezuelan Oil Minister according to the Baghdad Observer calls for even Hernandez Acosta, following a meeting last week of closer coordination in all areas of refining and the Committee in Taif, Saudi Arabia told Pla tt's petrochemical industrial development, and urges a Oilgra m, Sept. 28 : pooling of sparse skilled industrial labor among the ...we want to avoid another situation like 1973 member nations. It also calls for a greater role of the ...Venezuela is proposing a gradual increase in advanced countries in training executive and skilled the price of oil . . . and a formula so that the labor within the downstream sector of the petroleum importing nations will know in advance what is industry. happening with the price, while we protect the At a recent meeting of the Arab Economic Unity purchasing power of our revenues in relation to Council, the Iraqi Trade Minister proposed creating the dollar and inflation .... new Arab money markets to fund regional We have a big responsibility not only in development and stressed that the foundation of Arab reference to prices but in providing the right Unity was a unified approach to regional develop­ supply for the industrial as well as the developing ment. The statement from the Iraqis represents a countries, to avoid a world supply trauma. break with Baghdad's ideological isolation within the Yam ani is already known for the same kind of long Arab world. More than that, it indicates the term small incremental price rise approach to OPEC awakening within OPEC and the Arab world to the pricing policy. Such price rises would amount to no idea of cooperation with the industrialized states of more than 2 to 3 percent annually with a maximum of both East and West as they key to regional stability 5 percent. Abdul Hadi Taher, the director of Saudi and world peace. Arabia's state-owned oil company Petro men was The success of such a global strategy depends quoted by the Sept. 30 Financia l Tim es as saying that decisively on the success of the European Monetary the December OPEC price setting meeting would Fund. yield no more than a 5 percent price rise. He dis- -Judith Wy er

30 ECONOMICS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-1 6. 1978 Japan: building up 'Bremen East'

Japan is now building a solid Asian counterpart to the chemical projects and oil-for-technology agreements European Monetary System, a "Brem en East," were announced during the trip as well as a common implementing the strategy forged in discussions with determination to stabilize the dollar. West Germany during the weeks prior to the July Bremen meeting. The essence of the approach is to re­ Japan-German coordination cycle into capital-develop ment projects dOllars now Japan's current actions were planned in intensive used mainly for rollover of debts, speculation or other discussions held over the April-July period between unproductive purposes. Japanese and German officials and businessmen, The American observer of this process should not according to Japanese banking sources. These look for a spectacular meeting a la Bremen in which a discussions were part of the lead-up to the July grand new institution is announced - the Japanese Bremen accords which created the European simply do not work that way as yet. Instead, Japan is Monetary System. They also planned out a "Bremen Quietly building development alliances with strategic East. " countries such as Mexico and OPEC in which trade is The key figures on the Japanese side were unofficial transformed from mere bilateral exchanges into emissaries of Prime Minister Fukuda, individuals politically determined developmental planning. within the Industrial Bank of Japan. and sections of Though the individual actions may at first appear as the Mitsubishi business group. The alliance between somewhat routine, albeit more sizeable deals, the the latter two business groups and their political allies actual content is much more. in the ruling Liberal-Democratic party (Fukuda and As Japanese Prime Minister Takeo Fukuda told Yasuhiro Nakasone) is the basis of Japan's forthright Mexican newsmen last week, "Japan depends on moves over the last few months. On the German side. exports of industrial products and capital goods while the key representatives were emissaries of Helmut Mexico has oil and other natural resources and is pro­ Schmidt - who has had a personal relationship with moting industrial proj ects. Th us. economic relations Japan and Fukuda since both Schmidt and Fukuda between th e two are not limited only to trade. Rather. were finance ministers. along with France's Giscard. we hope to broaden economic cooperation and to offer in 1973 - as well as Deutsche Bank and German Mexico th e financia l and technological means for agri­ business assoc iation head Otto Wolf von Amerongen. cultura l and industrial development" (emphasis Both have longstanding business ties to Japan. added) . Sometime in the spring, according to the Japanese At the same time, Mexico mandated four Japanese sources. Japan and Germany decided that Treasury banks - Industrial Bank of Japan, Mitsubishi. Sanwa Secretary Michael Blumenthal's grip on the U.S. and Dai-ichi Kangyo - to organize a $500 million loan. Administration was too strong to reverse the U.S. since doubled to $1 billion, to finance capital develop­ weak dollar policy. Therefore, the two countries and ment projects in Mexico. One Quarter, to be handled France would have to act independently of the U.S. by Mitsubishi. will be a ten-year yen-denominated both to stabilize the dollar and to create the envir­ loan at an astounding 6 percent interest rate - far onment in which the U.S. situation could be trans­ below Eurodollar rates. formed. Mexican President Lopez Portillo will visit Japan The European wing of this strategy was the Bremen beginning Oct. 17 to consolidate the development accords themselves, which set up a credit facility to alliance. recycle Eurodollars into productive trade activity. Similarly, in describing Fukuda's mid-September The content of Japan's activities was to be the same, lO-day tour of the Mideast, Japan's Mainichi Daily but in a somewhat less direct form. The Germans, Ne ws editorialized Sept. 6, "It will be of significance particularly Deutsche Bank, advised Japan to step up for him to discuss the feasibility of tripartite coopera­ the role of the Tokyo international capital market in tion combining the funds of oil countries. Japanese order to eliminate current domination of the i\,sia technology and the manpower of non-oil countries." dollar market by British-controlled Hong Kong and This is exactly what Fukuda negotiated during his Singapore as well as to add Japan's financial might to trip. On the same day that Fukuda addressed Japan's the Europeans' develop ment efforts. Three steps were Diet upon his return. Sept. 21, the Dubai-based Bank of discussed : Oman announced it will soon open a deposit-accepting 1) Yen-denominated loans should be expanded. branch in Hong Kong - the first wholly OPEC-owned Nomura Research Institute reported last week that bank to do so - in order to pool Japanese and OPEC in the year ending March 1979 yen loans will double funds to finance projects in Asia and the Mideast. The the 1977-78 figures to reach the equivalent of $5 announcement said the aim was to take advantage of billion. They can increase at least 20 percent Japanese. Korean and Philippines technology. Petro- annually thereafter if restrictions are removed. .

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW ECONOMICS 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 Mexico 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 September issue of the Rothschild-published In ter­ Japan's own during the late 19th century "Meiji " national Currency Review 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 ICR warned. "that the origInS of the Mexico to secure oil deals and promote economic 'crash of 1979' should be sought not in Saudi Arabia. cooperation. State-owned PEMEX oil chief Diaz but in the challenge to the Western banking system Serrano has indicated that beginning in 1982 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 banks 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 Some 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 Review, "There is a great deal of pressure that can be determined 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 Japan? 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 1974 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. Simultaneously. 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 1977 are providing major financing for Mexico. with the levels - the product of 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 Evening 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 ECONOMICS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16, 1978 way that their oil dollars will be used to stabilize the Similarly in Iran, Fukuda and Premier Jaafar free world economy." In addition to pooling OPEC and Sharif-Emami agreed to find ways to sponsor joint Japanese funds for capital investment. Fukuda research on alternate energy sources. including announced that the government would support petro­ nuclear power, as well as ensuring a transfer of tech­ chemical projects in Saudi Arabia and Iran. as part nology. No specific projects related to this have been of a larger effort at aiding OPEC industrialization. announced as yet. And he reportedly went over the "greening of the de­ Fukuda told his cabinet that he had won under­ serts" proposal recommended as part of the $500 standing from OPEC for either an oil price freeze or a billion global developm ent report of the Mitsubishi Re­ low increase in order to avoid destabilization of the search Institute. dollar. Sheik Yamani of Saudi Arabia proposed oil-for-tech­ Prior to the Fukuda mission. former Industrial nology deals. He told Fukuda that Saudi Arabia would Bank of Japan chairman Sohei Nakayama led the like to sell oil directly to Japan. bypassing the oil third annual meeting of the Middle East Cooperation multinationals. In a future oil crisis. he pointed out. Center with representatives from 14 Mideast countries Japan could not expect consideration from the multis. to plan further technology transfer proj ects. Direct deals would be approved only if Japan imple­ As a result of the "Bremen East." offensive, Fukuda's mented technology transfers to Saudi Arabia. Yamani political strength is soaring. From a dismal 20 percent added. popularity in the beginning of the summer, approval

Fukuda: Oil for technology deals fo r Japan and Mexico

Japanese Prim e Minister Takeo export of industrial products before, but firmly rejected the Fukuda, in a Tokyo interview and capital goods, while Mexico pressure of segm ents of with Mexican newsmen Sept. 26. is rich in oil and mineral Japanese business who have outlined his conception of long­ resources and is sponsoring demanded that Mexico cut its oil term cooperation for numerous industrial projects. prices as a precondition for development between his Thus economic relations are not increased Japanese investm ent country and Mexico. The limited just to trade. Rather. we and trade. Excerpts from Diaz interview. excerpts of which hope for a broadening of Serrano's rem arks follow: appear below, came in the midst economic cooperation in which of intense preparations for the Japan would offer Mexico the We have great interest in the Lopez Portillo trip to the Far financial and technological market of the Orient, and Japan East later this month. including means needed for the industrial is the largest international daily interviews and features in and agricultural development of consumer after the United the press of the two countries, that country. States. We are doing everything and a stream of back-and-forth possible to find a formula to sell visits by businessm en, Mex ico Responds : them crude and refined ':ongressional deputies and "Industrialization in products. We cannot sell cheap. government officials. Excerpts specific areas" nor lower prices. Even if they are taken from the mexican should wish it, we cannot do it. dailies El Nacional and El The Japanese interest in Mexi­ What interests us greatly is Universal. co is fully reciprocated at the having cooperation with Japan highest levels of Mexican in other areas ... industrializa­ When President Lopez Portillo government, and in strikingly tion in very specific areas, such visits Japan. I wish to conduct similar term s. Below, the as capital goods and heavy frank conversations with him on Executive Intelligence Review industry. and Japan has a great the international situation and presents sections of a press deal of experience in this field. on the possibility of economic conference held Sept. 27 by Hence. during the visit of and technological cooperation, Petroleos Mexicanos director President Lopez Portillo, we including disarmament Jorge Diaz Serrano, together may possibly find some questions. with the Mexican minister of arrangement. ... in terms of In economic terms, I think Natural Resources and technology exchange. joint that our relationship is Industry, Jose Andres de investments and investments. fundamentally complementary, Oteyza. Diaz Serrano endorsed A situation of selling oil just since Japan has scarce natural the formulations Fukuda used in for the selling of it simply resources, depending on the his press interview the day doesn't interest Mexico.

Oct. 10-16, 1978 EXECUTIVE INTELLIG ENCE REVIEW ECONOMICS 33 rose to 27 percent at a poll taken just prior to his return menting. But since becoming Premier, Fukuda has from the Mideast. A current poll would undoubtedly moved close to the prodevelopment wing of Mit­ show a higher figure. Fukuda is virtually certain to subishi. defeat an attempt to replace him by London-ally The second axis of the alliance is the Industrial Masayoshi Ohira, currently Liberal-Democrat Party Bank of Japan group, which backs LDP faction leader Secretary-General. Yasuhiro Nakasone. Throughout this century, the IBJ The foundation of Fukuda's strength is an alliance of has been the core of the prodevelopment faction. Its two crucial business-political groups that have often own influence within Mitsubishi is key to the strength been kept at odds. Fukuda's main backing comes from of the latter's prodevelopment wing. IBJ is the prime the Mitsubishi group. Mitsubishi was created during promoter of both fusion power and policies for Third the l870s as a vehicle for the policies of the dirigist World industrialization. political faction in Japan, a faction closely allied to the Since the spring of this year, IBJ and Mitsubishi - U.S. Lincoln Republicans. Following post-World War and Fukuda and Nakasone - have formed a firm II trust-busting and reformation, it had been partially alliance against Ohira and for the promotion of global infiltrated by antidirigist factions and has since been development strategies. This alliance is what made politically split. Prior to becoming Premier, Fukuda possible Japan's close coordination with Germany. had mostly allied with the antidirigist group and had - Richard Katz often criticized the very policies he is now imple-

34 ECONOMICS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 Co

SOVIET SECTOR )

Sov iets: Camp David, lanother Munichl Including three exclusive reports fro m Novosti press agency

The leadership of the Soviet Union has given an March 11 article described how Prime Minister extraordinary warning to the international Neville Chamberlain gave Hitler his blessing, hoping community. The world is now in a situation so to turn Nazi Germany to the East. The "lessons of the dangerous that World War III becomes increasingly Anschluss" retain their significance to this day. Red probable, the Soviets have declared in a number of Star said. public forums, just as Great Britain's pact with Hitler As Great Britain's present-day subversion of the at Munich Sept. 29, 1938 meant that the countdown to U.S. government became increasingly apparent, and World War II had begun. the gleeful British backing for Zbigniew Brzezinski's And for the first time, the Soviet press has accused "China card" fantasy took on more and more tangible the British-linked "Black International" with seeking form (including Chinese Party head Hua Kuo-feng's control over the foreign policy of the United States trip to Romania and Yugoslavia in August). the Soviet government in order to push that policy toward a attacks on Britain escalated. But contrary to "military catastrophe" (see the article by Sergei Brzezinski's calculations, the Soviets have not. on the Vishnevskii excerpted below) . whole, reacted to the deterioration of their relations The Soviet decision to go public with this strategic with the United States in a paranoid "hard-line" evaluation, which the U.S. Labor Party has been fashion. Crucial to this was the smashing success of circulating for over a year, is intended to provide a Soviet President Leonid Brezhnev's May trip to West sufficient shock to particularly the United States and Germany. which resulted in a keystone 25-year treaty Britain to set war-avoidance measures into motion. for political and economic cooperation. That the Soviets believe such a turn of events is The indications are that Brezhnev has consolidated possible is indicated by the positive reference in political support behind this policy as reflected in the Pravda Oct. 1 to former U.S. President Dwight D. entire array of articles. Eisenhower. the commander of the U.S. armed forces Ironically-from the standpoint of London-it may in the wartime alliance against fascism. and well have been the increasingly hostile activities of representative. in the Soviet view, of the "sane­ China and Israel that Britain has so lustily supported, thinking" tradition in American public life. (For plus the deteriorating U.S. political climate, that excerpts. see below.) However, as the accompanying enabled Brezhnev to organize foot-draggers in the excerpts from a second Pravda commentary make Soviet leadership to back him. Soviet military men in clear, the Soviet Union is prepared to take matters particular may well have been swayed by the into its own hands should the West fail to act in time to argument that, in view of the escalating war danger, prevent the outbreak of war. the USSR should seek every opening available to bolster the "prodetente forces" against the more How the present turn developed aggressive tendencies within the NATO alliance. There can be little doubt that the treacherous agreements of the Camp David summit were what Moscow 's perception of Carter finally induced the Soviets to pull out all the stops. While the Soviets have never been enthusiastic about (See the article "The Microbes of Munich." below.) Jimmy Carter's Administration, there was a period And well-aimed attacks on Britain and on Zionist one year ago when it looked as if things might not be so control of international terrorism that have appeared bad. The Oct. 1. 1977 U.S.-Soviet Joint Statement in the Soviet military and youth-oriented press calling for a Geneva conference on the Middle East indicate that the present policy shift has the strong was a hopeful sign. and the strategic arms limitation backing of a significant portion of the USSR's military talks (SALT II) were proceeding well. and youth apparats. The crisis in the Horn of Africa and the Israeli The present turn has been building since March, invasion of Lebanon. however. were among the key when the military daily Red Star. on the anniversary events that threw this fragile U.S.-Soviet of Hitler's annexation of Austria (the Anschluss) , rapprochement off balance. The Soviet news agency leveled the first significant attack on Britain. The TASS responded to Carter's March 17 speech at Wake

Oct. 10- 16. 1978 EXECUTIVE INTELLIGENCE REVIEW SOVIETS 35 Forest University, where he referred to the Soviet Union as "our adversaries," with a release charging that Carter's speech "means a shift of emphasis in Exclusive to our readers: American foreign policy" away from detente. Soviet Ambassador to the U.S. Anatolii Dobrynin abruptly flew to Moscow for consultations. Th e three reports here, provided exclusively to Brezhnev gave a major speech April 70n board a NSIPS news service and its affilia tes by the Soviet cruiser in the Eastern port of Vladivostok, warning Union 's No vosti Press Agency, include some of the that "both to the West and to the East of our frontiers sharpest Soviet polemics to da te on the Na zi-brand there are forces interested in the arms race, in racism of the Zionists, the ominous parallels between working up an atmosphere of fear and hostility." the Munich and Camp Da vid Summits, and the road to Pointing to the "indecision and inconsistency" of the lasting peace in the Midea st. Carter Administration, Brezhnev called for the U.S. "to meet us half way." But "frankly speaking," he said, "we do not see such steps of late." Soviet and East European press coverage of Carter Tiger's paws a 10 Peking increasingly treated him as the victim of a conspiracy, centered in the figures of Brzezinski and The German Nazis were already using it, and the Energy Sec retary James Schlesinger. The Zionist hawks are using it now, so one shouldn't honor Czechoslovak daily Rude Pra vo May 23 called Carter Chairman Mao and his successors as the inventors of a prisoner of the "Israel lobby," and compared him to their policy on the national question. Harry Truman, whose "bad advisers" kept him from When Germany set out to conquer the entire world, continuing the wartime alliance with the USSR. More the Nazis had worked out a plan for the "Germaniza­ recently, a Pra vda feature by Vishnevskii Sept. 2 tion" of the United States of America, where, they identified Schlesinger and Brzezinski as the hawks in claimed. "30 million people have German blood Carter's cabinet, the main advocates of the "China flowing through their veins." In fact, the Nazis did card," who give the White House "top secret succeed in starting a "German-American Bund" recommendations, constantly aimed to subvert the which recruited spies and various other people from process of detente." persons holding leading positions in American - Susan Welsh factories. and they succeeded in forcing not a few

..Black International" the Western states, tacitly Western circles. The chairman of supported by the USA, hoped that the Socialist International, W. seeks to control the fascist aggression would be Brandt, warns of the sinister U.S. government directed above all and only against activity of the "Black Inter­ the East. against the Soviet Union. national" of right-wing belligerent They bitterly miscalculated : forces who forget the lessons of From the "International Week " within the same year, Western history ... column by Sergei Vishnevskii. Europe was enveloped by a war As a result of the willfully Pravda. Oct. 1: conflagration. Later on, U.S. dangerous activities of the enemies ... Above all. blind anti-Sovietism President D. Eisenhower said: of detente, the international pushed the Anglo-French "The world paid dearly for the situation has gotten more complex. politicians into their disgraceful lesson of Munich, but it also Human reason cannot tolerate this. deal with the fascist aggressors at learned it." But did everyone learn Maximal efforts of the peace­ Munich. The internationally known it? lo�ing forces and governments are scientist from California. Fred The sane-thinking politicians necessary in order to prevent Neil. writes in the book War and undoubtedly drew realistic another military catastrophe ...

Peace in Germany: ..At Munich, conclusions from the lessons of the During the recent period, the Britain and France went for a deal Munich deal-the inadmissibility most sinister forces of American with Hitler. proceeding from the of "appeasing" and encouraging imperialism have begun to launch theory that the German position aggressive forces, the necessity of a counteroffensive. Their and their own position toward the a collective rebuff to the war vanguard is called the "new right" Soviet Union could be identical." instigators, the fact that anti­ - this is a coalition of extreme Having played the Munich card, Soviet calculations are fruitless. reactionaries, bellicose anti­ and having given Czechoslovakia However, the "Munich communists, and militarists, away to be torn into shreds by psychology" was not at all erased representing the most aggressive Hitler. the reactionary circles of from the consciousness of certain portion of the military-industrial

36 SOVIETS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 three commentaries fro m Novosti

German-Americans into committing subversive acts politics and ideology so clearly as a racist standpoint against America. on the national question, even if people attempt to The Zionist leaders in Tel Aviv follow the same cover it over with beautiful figures of speech. principle, and demand from people of Jewish descent The "Aryan" racial theory of the superiority of one living in various countries of the world with different chosen people above all others led to national social­ social systems, that they help the state of Israel, that ism, with its hatred against Jews, Gypsies, Slavs, and they work for Israel without any consideration of the other "Non-aryans." Where this led is well known. desires of the states in which those Jews live and Zionism, which sets everything Jewish and Israeli whose laws they observe. against all of humanity, is causing the tragedy of the The Maoists have now seized on the formulation of Palestinian people, the sufferings of other Arab "dual citizenship." But whatever the turns of phrase people, and the discrimination against the Black Jews Peking uses to camouflage itself, the "Chancellory for in Israel. With cynical calculation, Zionism provokes the Affairs of Chinese Living Abroad of the People's anti-Semitsim wherever it can in order to whip up Republic of China" is reminiscent of the emigration to Israel. The Maoists, of course, have corresponding institution in Hitler's Germany, called copied this method from them, not for the purpose of "Gau-Austland," which was charged with the Nazi­ motivating Chinese living abroad to return to their fication of Germans living abroad. This homeland, but rather to intervene unscrupulously in "Chancellory" is also reminiscent of the far-flung the affairs of other states under the pretext of network of Zionist organizations, which work to protecting "countrymen living in foreign lands." extinguish people's national feelings. The Tibetans, Uigurs, Kazakhs, Mongols, and other "China is everywhere that the Chinese live," so related nationalities who live in the People's Republic insist the Maoists. "Your blood is thicker than your of China and who consider themselves to be Chinese passport," is what the Nazis once maintained. citizens became the first to experience the national­ When one thinks about that, one comes to the ities policy of Mao and his successors. They were conclusion that nothing lays bare the true nature of deprived of the opportunity to practice their national

complex of the USA ... meaning of the treachery help defend Czechoslovakia from It is not difficult to imagine who committed at Munich by the Anglo­ fascist aggression. However the is behind these extreme "hawks," French bourgeoisie, with the direct Anglo-French rulers preferred when analogous infantile ideas are support of influential monopoly shameful collusion with the displayed in such solid publications circles in the USA, but have also aggressor, preferred treachery as Business Week . . . This magazine given the peoples the possibility of and infamy. Anti-Sovietism and recently called for building drawing the necessary conclusions anticommunism turned out to be U.S. foreign policy in the spirit of for themselves ... stronger than reason ... the absolutism of the French King Attempts were made to justify The people have drawn the Louis XIV, and to use American the treachery at Munich by necessary conclusions from the power to "re-establish leader­ expressions of "concern for peace" events of 1938. They advocate ship." Closely allied with the "new in Europe. A tremendous threat did general peace, freedom, and rightists" is the "Black Inter­ indeed hang over the world at that independence with the full national" of Western Europe, time. But the Hitlerite aggression understanding of whom they can which, through the conservative still could have been stopped, rely on and who should be feared ... London Daily Telegrap h, is stifled in its cradle. The defense of The people reject the policy of counseling Washington to Czechoslovakia, which the Western pandering to aggression and

" increase the use of force ... " powers had treaty obligations to hegemonism, no matter what carry out, provided a real labels this policy may be covered possibility for doing this. The with and no matter what part of the "The Lessons of Munich" Soviet Union, true to its treaty world it may appear in ... obligations to Czechoslovakia and "The Lessons of History, " by to its international duty, moved 30 Vitalii Korionov, Pravda, Sept. 29 : infantry divisions to its western ....The last four decades have not border, and placed air force and only fully disclosed the class tank units in combat readiness to

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW SOVIETS 37 customs and traditions. their religious cult considered to be a fifth column of the People's observances were forbidden. "elected" leaders of all Republic of China. every national community that ranks. most of them Chinese-born. were simply lives far from its historical homeland can be accused installed by the Chinese. of precisely the same thing. White racism is making The suspicions of some China experts were justified itself felt in England. for example. where the when they viewed the solution of the national question "N�.tional Front" plots provocations in areas where inside China as a test of its national policy according there is a colored population. and at the same time to an international standard. The Maoists exploited calls upon the whites for "self defense" (against people's national feelings and fabricated their 'fifth whom?). column' in Malaysia. Thailand. Burma. Indonesia and All the people in the world today need to be other countries by means of tricks. bribes and protected against racism. in whatever costume it may terrorism. In this. these champions of revolutionary appear. The Peking claims of influence over people of phrases did not base themselves on the working-class Chinese descent. wherever they may live. is not an section of the Chinese communities. but on their well­ internal Chinese question. This is a further attempt by to-do leadership. Peking has not allowed itself to be Peking to alienate populations. and first of all the embarassed by bungled jobs or scandalous revela­ population of Asia. For Peking wants to succeed in tions. The Maoists are provoking feelings hostile to achieving world leadership through dissension. China everywhere - wherever there are Chinese - Fj odor Breus streets. Chinese districts. or Chinese restaurants. Novosti Political Correspondent wherever dishes with exotic descriptions such as "Snake ala Shanghi" or "Tigers' Paws a la Peking" are served. To put it another way: the Peking The microbes of Munich protectors of the inhabitants of these streets and districts do not hide their claw-like paws as a pre­ "To expand. deepen and continue the process of cautionary measure. but flourish them in front of detente" - this is the well-known essence of the everyone's eyes. in order to drive the 20 million principles laid down at Helsinski. The healthy spirit of Chinese living abroad into the isolation of the Chinese Helsinski has been realized in numerous bilateral ghetto. agreements concluded over recent months on To think that every one of them must uncon­ exchanges in trade. economics and culture. and also in ditionally be a spy. to think that people in every the recent special session of the United Nations Chinese restaurant serve their visitors their favorite General Assembly on disarmament. which expressed dish with a microphone hidden in it - one can be the will of all peoples to put a stop to the arms race. certain. that all this does not please the plain working­ The final document of this conference. which class people of Chinese descent who want to live in incorporated many ideas from the Helsinski peace with their neighbors. conference. emphasized the necessity of banning the Therefore. the Maoists' policy on'the national ques­ use of force: of working toward the dynamic develop­ tion really suits Washington's taste. for as I believe. ment of detente. which has expanded into all regions the propagandistic uproar for "the protection of the of the world and all areas of international relations ; Chinese living in Vietnam" did not accidentally and of the most rapid and complete extension of poli­ coincide with the rapproachement between the tical detente into military detente. People's Republic of China and the United States of There are still people in this world who cannot America. In their own countries. the leaders of the stomach the spirit of Helsinki. They remain under the capitalist world solve the national question with damaging influence of microbes of an old disease. the different methods than the People's Republic of China highly resistant Munich virus. which is known to uses. but with similar results : the total repression of thrive on anti-Communism. the national independence of national minorities (one Today. the 40th birthday of the conclusion of the should only compare the fate of the Tibetans ignominious Munich agreement to dismember with the fate of the American Indian). Even the hostile Czechoslovakia. the damage done by the Munich virus sanctions against Vietnam by both the People's - which turns up here and there in the policies of the Republic of China and the United States of America NATO countries and of Maoist China - has become are identical. Peking is arranging provocations on the particularly evident. Chinese-Vietnamese border. and in the meantime Just as at the end of the 1930s the Munich "test of Washington is extending the legal limit on trading peace" in the West made one concession after another with the enemy in relation to Vietnam. to the aggressor under the banner of the fight against And even capitalist countries. where chauvinism the "Bolshevist danger" and "Red Moscow." and rears its head. where immigrants from Asian and benevolently watched the preparations for the "Drang African countries are considered to be second-class nach Osten" against the Soviet Union. today also there human beings. are happy with the uproar raised by exist similar subj ects which call back to memory the Peking. For thanks to Peking. which has caused a sadly well-known Munich policy of driving toward a situation in which every Chinese community is confrontation with the Soviet Union.

38 SOVIETS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 Within the global strategy of anti-Sovietism. the be expected from a policy of aiding and abetting Munich virus is primarily Identifiable by the myth of aggressors. To drive out the microbes of Munich the "Soviet threat." Leonid Brezhnev took one such forever is therefore the task of all those who are instance as the occasion to observe rightly that every fighting for detente and the preservation of the spirit time the military adventurers want to conceal their of Helsinki in relations between the states of all aggressive intentions. "they always try to revive the continents. myth of the ' Soviet threat :' they look for evidence of - Vasily Morosov such a threat in the depths of the Indian Ocean and on Novos ti Military Commentator the summits of the Cordilleras Mountains. If one '" observes the European lowlands through NATO's Highl ights: Soviets on Britain and Zionism binoculars. one can see nothing except the Soviet RED STAR. on the anniversary of divisions ready to spring against the West." June 22 The Munich virus is also evident in Maoist China's Hitler's invasion of the Soviet Union, Operation Barbarossa, writes : "The regional claims on its neighboring countries. Just as catastrophe at Dunkirk. the goose­ Hitler began to prepare for the Great War by claiming steps of the fascist soldiers at the Austrian and Czech territory. so also have Mao Tse­ Arche de Triomphe in Paris, the tung and his successors written on their banners of windows of London staring like emp­ hegemony: "We must conquer the globe." and have ty eye-sockets - that is what be­ undertaken numerous acts of aggression against came of attempts by certain near-­ neighboring countries. They are doing so in the course sighted politicians to direct the of preparations for establishing their domination over German aggression to the East. Those who make analogous efforts all of Asia, and after that. over the entire world. The today would do well to remember military conflicts provoked over the past years by the this," Maoists on their borders with India, Tibet and July - August NEW TIMES, the Soviet foreign cir­ Vietnam are eloquent testimony to this, and show how culation weekly, runs a series or. the "test of strength" succeeded, and how the reaction "The Munich Tragedy, " quoting the Soviet charge d'affairs in the United of public opinion was tested. States in 1938 on Britain's influence Maoist China's noisy campaign to "protect" the 25 over U.S. policy: "Kennedy, the million Huatsiao. the people of Chinese nationality ambassador in London, acting on living in neighboring countries. is likewise being behalf of the Chamberlain set, has conducted according to Hitler's formula of the 1930s. succeeded in persuading Roosevelt when he took the Sudeten Germans "under his that Germany will inevitably take protection." and reduced the civil rights they enjoyed action and that Britain is unprepared ; Bullit. who is a fascist in the territory of the Czechoslovak Republic before at heart, has 'sold' Roosevelt the Munich. idea that France is weak ; the Anglo­ The Munich "appeasement policy" is also remini­ phile clique in the State Department scent of the way China is currently inflating itself with headed by Sumner Welles and Dunn its weapons of hegemony against our country - its have been working on Roosevelt policy of the "four modernizations." whose aim is well along these same lines . . .." known to be the rapid militarization of their country September 16 KOMSOMOLSKA Y A PRAVDA. the youth daily, charges "Zionism and and the furthering of the Peking leaders' intention to Masonry" with carrying out subver­ become a great anti-Soviet power. sive operations, "gathering infor­ I believe that the microbes of Munich can also be mation. infiltrating themselves into discovered at the Camp David talks. where two top levels of civilian power, taking participants are demanding ever greater "elasticity" over ministries and unions and even influencing Parliamentarians and from third parties in the solution of the complicated Presidents." Their purpose: "to Mideast problem. and are trying to make an liberate their devotees from reason, "agreement" at the expense of the interests of the and to fight against the influence of people of the Arab countries. to negotiate concessions science. " to Israeli aggression. and to establish the RED STAR charges Israeli intelli­ September 22 "legitimate" right to station American military gence with "subversion and contingents and set up military bases in the Mideast. terrorist operations ... aimed at kindling hotbeds of tension in It is fair to presume that the Munich-style Israeli­ various regions of the globe, tor­ Egyptian separate agreement organized by pedoing good-neighborly relations Washington will be rejected by all peoples of the Arab among nations, and contaminating world and especially by the Palestinian people. The the political atmosphere." "The Is­ projected military-political presence of the USA in the raeli Secret Services allocate more zone of conflict can not solve the Mideast problem by money for espionage and sabotage peaceful means. operations than Britian," the paper states. The results of Munich demonstrate clearly what can

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW SOVIETS 39 signature on an agreement that did not foresee the Palestinians' right to self-determination. Begin used When the illusions of Camp Camp David in order to announce loudly enough for everyone to hear that Israel does not intend to grant David fade away sovereignty to western Jordan and the Gaza Strip. He thus blocked any possibility of the formation of an The trilateral agreement at Camp David has come independent Palestinian state. The vague promises to up against strong criticism from the Soviet public. and grant "autonomy" to the Palestinian "residents" of no less from all those who are not so readily willing to West Jordan in five years have not the slightest · be deceived by the noisy propaganda around the correspondence with the Arab people's demands to "historic success." and who are able to evaluate what make Palestine into a separate state. At the all-Arab happened from an objective standpoint. For there do summit conference, with Egypt's participation, the exist other Arab countries besides Egypt. countries Palestinian Liberation Organization was recognized who are not indifferent to the fact that the agreement as the sole rightful representative of the Palestinian was made behind their backs. There also exists the people. But the Camp David formula concerning the Palestinian people. whose just demand for a sovereign Palestinians. likewise drawn up by Sadat. gives the homeland has for all practical purposes been ignored. impression that there exists no such nation and no And finally there also exists the world community of representative of their rights and their lives. In nations. whose common will concerning ways and balance. the fate of Jerusalem was likewise handed means to settle the Mideast conflict has been over to Israeli dictates. expressed in the well-known United Nations decisions. It is therefore justified to ask the question : why is a and especially in the resolutions of the Security new "Framework for a Settlement" necessary when Council. the only framework corresponding to the demands for These resolutions state unequivocally that peace in a just peace has already been worked out previously? the Mideast will only be a just one if the following The answer to this is not to be found in the theatrics conditions are met: (1) the withdrawal of all Israeli of the concluded talks. but rather in the political troops (and hence also the exclusion of all other forms tendencies which led to Camp David in the first place. of Israeli presence) from all occupied Arab terri­ The American diplomacy of "partial agreements," tories : (2) the right of the Palestinian people to self­ whose aim is to split the Arab world and to exclude the determination until an independent state for them is Soviet Union from the process of a comprehensive created ; (3) guarantees for a secure and settlement, met up with Cairo's readiness to conclude independent existence for all states of this region. a separate agreement at any price. Begin's govern­ under conditions of a lasting peace. ment and Israeli military circles estimated this to be The Camp Davis talks may stir up illusions in many an opportunity to dictate conditions to Egypt. Butin quarters that peace is close at hand. But what kind of doing so they neglected Israel's own interest in a real peace can it be when the agreements made have put and just peace. which would guarantee Israel's Arab sovereignty into question more than ever security not by means of a dictate the Arabs will not before? accept or an agreement made behind their backs, but I will begin with Egypt. From the document entitled rather by means of a demonstration of good will and "Framework for the Conclusion of a Peace Treaty the observance of the interests and rights of all those Between Egypt and Israel" it can be ascertained that to whom a settlement guarantees the right to a home, Israel merely "recognizes" Egypt's limited sover­ an independent and secure existence and to peace. eignty over Sinai. Further talks are to determine Already now it is symptomatic that immediately Israel's "security zones" on the peninsula as well as following Camp David Begin and Sadat began to give "zones of limitation of arms and armed forces" for the divergent interpretations to the key points of the Egyptian army. Israel will begin to pull out its troops agreement. The former leader is set upon firmly from Sinai three to nine months after the signing of a anchoring his dictates. the latter upon justifying peace treaty and will finish this in two to three years. himself before his own countrymen. Already now one What is noteworthy here is that Sadat accepted these can well understand the realistically thinking people conditions even though Israel had rejected Sadat's who see themselves forced to point out the seriousness demands for the closing down of Israeli settlements on of the resulting situation and to the new dangers the Sinai peninsula. looming on the Mideast horizon. It was therefore no Sadat. who has partially sacrificed Egypt's national accident that the Egyptian Foreign Minister Kamel sovereignty, was hardly inclined to remember how declared his resignation. and that a wave of criticism passionately he had previously defended "the most and protests is rising all over the Arab world. holy cause of all Arabs. the cause of the Palestinian - Spartak Beglov people." and had stated that he would never put his Novosti Political Commentator

40 SOVIETS EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 The CIA - on Iy a caretaker force LaRouche tells who's really benefiting fro m th e Agency's dem ise

Journalists and others who obviously have plainly not or the world on any major issue. British intelligence learned to add and subtract insist that the U.S. Central operatives are in controlling positions within vital as­ Intelligence Agency (CIA) is still today a dark and pects of U.S. military intelligence, and British and devious power in the world. Others suffering the same Zionist agents generally have the run of the premises mental affliction rush about, insisting upon the inside the most sensitive aspects of government. axiomatic authority of U.S. governmental intelligence Under these circumstances any foreign government sources in matters ranging from canning prunes to the which attributes a significant operation to the initia­ sex life of sundry Tibetan monks. tive of the CIA is simply playing the damned fool. Any Beginning with Henry A. Kissinger's assigning member of Congress or the press who gives any James R. Schlesinger to perform the first phase of a prima-facie credence to a confidential briefing alleg­ wrecking-job on the CIA back during the Nixon Ad­ edly based on high-level governmental intelligence ministration, the Agency has undergone successive sources is playing the fool. There are, admittedly, still savage pink-slipping housecleanings. Added to the capable intelligence specialists - and valuable files ­ current period's wave of retirements of old hands at CIA, in the Department of Justice, and so forth, but from the OSS and initial CIA years, one may say that virtually none of the executives are rocking the boat the Turner purge of Deputy Director E. Henry Knoche currently - they are not even thinking of contradict­ and hundreds of others during the summer of 1977 es­ ing Brzezinski, Kissinger et aI., and do not wish to gain sentially finished off the last major independent capa­ possession of any facts which might impel them to bilities of the CIA as a functioning governmental intel­ think of doing so. ligence agency. Except for the accumulation of sub-agents, contract The way it now works sources, and informal connections left over from for­ Exemplary of what does happen that is credited to mer periods, every former capability of the Agency U.S. intelligence circles is the case of the discredited has either been eradicated or is rapidly eroding. The Romanian defector, Ion Pacepa. once-feared premises at Langley have been degraded Two principal facts have come out in connection to a laundering-agency for British and Israeli intel­ with that gentleman. First, he is not properly speak­ ligence products run through those premises under the ing a defector ; he was an in-place British spy in the direction of Henry A. Kissinger, James R. Schles­ Romanian government, who was pulled out by the inger, Zbigniew Brzezinski. and anglophile Rhodes British for the purpose of playing-back disinformation scholar and British intelligence (International planted into him by top circles of the British Secret Institute for Strategic Studies) agent Admiral Stans­ Intelligence Service. Second, intensive investigation field Turner. of that British spy's fairy-tales have established that Worse than the savage personnel cuts are the supple­ every revelation he purported to make to Washington, mentary measures employed to prevent anyone in the D.C. and in West Germany was a lie. Agency from even thinking in directions contrary to Although the key British sewer-outlet for this decep­ current Brzezinski assignments and estimates. With­ tion operation was Robert Moss, the operation was run out indicating the exact methods employed, it is ac­ in West Germany under the Zbigniew Brzezinski label. curate to state that the internal life of the CIA is totally In other words, Brzezinski was caught red-handed in an Orwellian nightmare, with very effective methods an effort to destabilize the government of Chancellor of actual thought control regularly applied to all em­ Helmut Schmidt, the head of government of a princi­ ployees. pal U.S. NATO ally ! What has occurred in this way to the CIA character­ The final two straws which broke the back of the izes most of the once-vaunted U.S. intelligence estab­ U.S. government intelligence capabilities - those sur­ lishment, a sickness currently invading the State De­ viving the Turner purge of 1977 - were Carter partment. The President of the United States com­ Administration directives for the Shaba II and Camp mands presently no competent, independent sources David cases. for discovering what is actually occurring in any part The U.S. intelligence community now operates chief-

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW COUNTERINTELLIGENCE 41 ly on hopes of reaching pensionable end-of-service, assuming among might-have-beens. meanwhile avoiding any hint of an intent to The issue is not what the CIA did or did not do. The contradict whatever current fantasy the Carter Ad­ issue is whether the USA requires a central intel­ ministration (e.g., Brzezinski) prescribes as adopted ligence agency as a source of information bearing on fact. The White House, under "Svengali" Brzezinski's policy decisions and as a counterintelligence arm. The direction, declares, "My mind is made up ; do not at­ correlated issue is whether qualified professionals are tempt to confuse me by reporting reality." The intel­ required to staff such an int elligence agency. The ligence establishment gets in line. issue is not what the CIA did, but what it should be Everyone in positions of power throughout the world doing. - except the U.S. government - knows that the Camp The issue was pointed up by the proceedings of a David proceedings rank with Chamberlain's follies at most-recent. Ann Arbor. Michigan conference of Munich as the worst diplomatic fiasco of the 20th Morton Halperin's Committee to Stop Government century. Any evidence which contradicts the virtues of Spying. The Committee. which is so overlapped with Emperor Brzezinski's Camp David "new suit of Philip Agee's gang of proterrorists as to be indisting­ clothes" is hysterically avoided or simply deprecated uishable from a terrorist-support group. underscored as "smoke screen" or "Soviet propaganda" by the its true character by honoring sundry known terror­ Administration and its intelligence arms. Menachem ists and their supporters as the principal sideshow fea­ Begin runs Israel, and Moshe Dayan runs the United tures of the KonKlave. States. The Halperin effort. closely intertwined with the Ralph Nader operations. has been a principal stalking But the CIAwas bad horse behind such abominations as the "Levi Guide­ Admittedly, the CIA has a small constituency. The lines" and the White House's own gag-rule against any only case in which a former CIA operative has been U.S. counterintelligence general surveillance of Brit­ slapped hard for allegedly lampooning his fonnerem­ ish. Canadian and Israeli intelligence agents' (and ployer is Frank Snepp - and Snepp revealed not a assassins') deployment in the United States. The Hal­ single CIA secret. The difference is that Snepp at­ perin-Nader-Agee cabal is the essence of thewrecking tacked Henry A. Kissinger in a serious competent of the U.S. intelligence community begun by Schles­ way. Flagrant violater Philip Agee, who has been in­ inger. and the names and antics of Halperin, Nader volved in setting up CIA operatives for assassinations, and Agee ought to warn a too-credulous public of its walks about quite unprosecuted, while Snepp lan­ folly in cheering the demise of the "bad CIA." guishes under judgment. The books of various former Halperin's - like Nader's - group makes it clear intelligence operatives are each filled with hundreds that their included purpose. and prominently so, is to or thousands of names. This and that is "blown" in prevent the people of the United States from enjoying batches with each new publishers' listing cycle. Yet, the slightest degree of effective intelligence-counter­ only Snepp - who rightly and effectively damned Kis­ intelligence pr otection against the wave of inter­ singer - was placed under onerous judgment. national terrorism British intelligence warns it is One can kick the CIA, urinate on it several times about to unloose in this country. daily. Such things pour out every day, like rain during At this moment. even minor foreign powers have the Bengal monsoons. As long as no one does an effec­ justification for joining the ranks of those nations who tive job on Henry A. Kissinger, all such antics have presently view the USA's intelligence facilities as the been generally admired. laughingstock of the world. It was not so much Hal­ "But," the argumentative voice pipes up, "look at perin. or Nader. or Agee who did this. It was Kissin­ what the CIA used to do ..." ger, Schlesinger. Brzezinski and Turner - with aid As a political historian, and recently advantaged to and assistance from such foreign powers as the Brit­ discuss relevant matters of wartime and postwar hist­ ish government and Zionist agencies. ory with persons most advantageously situated to Oh. but were I given a suitable mandate and backing view dark proceedings, I have probably as good a from Congress. I would pull together an effective over­ sense of what the CIA's covert operations (and re­ all U.S. intelligence capability within weeks. Who. lated) institutions have done as anyone outside the in­ every concerned citizen may well ask. will in fact do it telligence community proper. I do not need to be' in­ - before it is too late? formed of such matters at this juncture. What I do - Lyndon H. LaRouche. Jr. not know in one way or another, I am fully capable of

42 COUNTERINTELLIGENCE EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 Drug and gambl ing czars tied to vote theft How Bronfman, mobsters fix Un ited States' elections

U.S. Labor Party investigations into widespread fraud Detroit's Max Fisher, who has camouflaged his reported in the primary elections this year have origins somewhat more effectively, is said by uncovered a pattern of evidence that the vote fraud informed sources to control Detroit drug distribution, machines in major cities are controlled by figures which is the jumping-off point for much of the Midwest closely associated with organized crime, drug drug traffic. running� gambling, and laundering of "dirty money" from those activities. St. Louis: The results of our investigation are presented in In the August primary election in St. Louis, the poli­ several case studies, which show the shocking tical machine of Democratic Congressman William collusion of organized crime networks, closely Clay was reported to have engaged in blatant fraud associated with British financial interests and their including registering and voting thousands of non­ Zionist allies, in robbing American voters of their existent voters from abandoned buildings, ballot franchise. stuffing, tampering with the printed returns recorded on voting machines, rigging machines, and At the top of the operation, investigation points to threatening voters and candidates. The campaign of the Canada-based Bronfman family of whiskey harassment and obstruction of justice accompanying magnates whose influence and control over organized the fraud including attempting to bribe Clay's crime dates back to the Prohibition era when they independent Democratic opponent Elsa Hill, then supplied bootleg liquor to the notorious Purple Gang. threatening to murder her ; interfering with the From these beginnings, families associated with the influencing of judges ; and carrying on persistent Bronfmans, like the Jacobses in Buffalo and Max intimidation and harassment of U.S. Labor Party Fisher in Detroit, moved to expand their operations members and candidates. The Jacobses have and political control in the U.S. The Clay machine is, in fact, merely an arm of St. concessions franchise seized control, through a Louis organized crime associate Morris Shenker's far­ Emprise and now called Sport­ originally known as reaching organization. Shenker, an attorney and Las , and other major Services, of race trac ks, casinos Vegas casino owner, holds the St. Louis organized ry. sports operations around the count crime franchise of the Buffalo Jacobs family which In 1971, after several years of scandals, Emprise owns Emprise-SportServices. Shenker, who has was finally indicted by a Los Angeles grand jury for an represented the interests of Emprise and its Mafia illegal takeover of a Las Vegas gambling casino in 1966. associates in indictments stemming from illegal Indicted along with Emprise were Anthony J. Zerilli efforts to take over gambling ventures, is currently of Detroit, son of Joseph Zerilli who has been under investigation by the Nevada Gaming identified by law enforcement experts as the head of a Commission. Detroit organized crime gang : Michael S. Polizzi of Shenker helped rescue William Clay from a career the Grosse Pointe Valley Die Cast Association and a of petty theft and launched his congressional career "lieutenant" in the Detroit mob : Anthony Giordano of with the assistance of Harold Gibbons, St. Louis the St. Louis Banana Distributing Company : Jack Teamster boss. Clay had been expelled from college Schapiro, owner of the Silver Slipper Casin o in Las for illegal gambling, fired as a bus driver for stealing Vegas ; and Arthur J. Rooks, a Detroit municipal court and removed from an insurance company job for judge. altering the books. Through his position on the St. Most recently, Emprise-SportServices has been Louis Law Enforcement Assistance Administration implicated in the 1976 murder of Arizona reporter Don machine, Shenker authorized funds for Harold Bolles. Gibbons and William Clay to establish a paramilitary

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW U.S. REPORT 43 youth gang organization which has "policed" In Genesee County. a 15 percent sample of computer elections for Clay since. votes cast in the recent primary showed that more ' than 50 percent of the Labor Party's votes had been Michigan: left "uncounted." In this state in the August third party qualification New York: primary. the U.S. Labor Party. which statisticians The Erie County (Buffalo) New York intermeshing of project received 30.000 votes statewide. was officially the vote fraud and organized crime machines is credited with 525 votes. After a three and a half-day extremely straightforward ; operations in the rest of hearing documenting thousands of uncounted votes. a the state are characterized by only slightly more federal district court judge refused to place the Labor subtlety. Organized crime in upstate New York Party on the ballot. The conspiracy to keep Labor centers in the Jacobs Brothers' Sport Services Inc. The Party candidates off the ballot in Michigan dates back U.S. Labor Party has definitively identified the Jacobs to 1976 when an unprecedented third party quali­ Brothers as the upstate New York connection in the fication primary was established. Bronfman drug-running operations conducted through Max Fisher. a former Purple Gang associate. in Canada to New York. The Jacobs brothers, in their conj unction with his law firm Cohen. Honigman and efforts to turn Federal heat off their enterprises, have Schwarz. has for years had a financial str.a nglehold on been able to go right to the top of the Democratic both the Republican and Democratic parties in Party nationally, retaining the services of Kennedy­ Michigan. Fisher dictates policy for the Republicans ; linked Lawrence O'Brien. his lawyer Avern Cohen dictates policy for the Democrats. Through these networks Fisher placed his Individuals connected to SportServices al� form a own man. Howard McGowan. a disbarred lawyer. in a factional core within the Marine Midland Bank, which key position at the State Board of Elections. It was has its corporate headquarters in upstate New York, McGowan who wrote the third party primary through such h6ldings as Niagara Frontier Services qualification bill. specifically to keep the Labor Party and First Mark Corp. This faction of the bank's board off the ballot. has led the fight for that bank to be taken over by the The United Auto Workers and other "muscle" British Hong Kong and Shanghai Banking linked to drug-pushing and Michigan real estate Corporation. for centuries the international bank most speculation. under the thumb of Max Fisher. carried prominently involved in the drug trade. out the "street level" mobilization for fraud through In 1976, the Erie County Democrats delivered a their control of boards of elections. Fisher permits minimum of 20,961 fraudulent votes for Jimmy Carter UAW local organizations to hold drug-pushing according to documentation submitted by the Labor franchises inside the auto plants. Party to federal authorities in New York. This Law enforcement sources in Michigan say that machine is dominated by Joseph Crangle, who utilized Fisher has the unique combination of control over the black poverty apparatus of Arthur Eve in the 1976 police and prosecutorial apparatus in the state. and fraud. Crangle and the Jacobs brothers joined forces control over local philanthropy to provide him with to carry the election of Daniel Patrick Moynihan to the both immunity from prosecution and a number of U.S. Senate in upstate New York. Moynihan has impeccable "charities" through which to launder his returned the favor by championing drug funds. The control over police and prosecutorial decriminalization and legalized gambling for the operations (Avern Cohen recently became head of the state. Detroit Police Commission. for example) also On Oct. 5, 1978, as the Buffalo U.S. Labor Party provides immunity from prosecution for blatant vote mounted a campaign to expose the drug links of the fraud and ongoing harassment and intimidation of Jacobs brothers and to prevent the Hong Kong and political candidates and their campaign workers. Shanghai Banking Corporation from taking over (The Michigan Labor Party has experienced almost Marine Midland Bank, U.S. Labor Party candidate for two hundred arrests of its organizers in the last year.) Congress Khushro Ghandhi's nominating petitions An exemplary look at the prosecutor's office in were challenged by a man named Bartkowski. Genesee County. Michigan shows why this immunity Bartkowski is known by political sources in Buffalo as exists. There. District Attorney Robert Leonard. who a hack for Joe Crangle and for Khushro Ghandhi's has consistently refused to prosecute drug pushers. Democratic Party opponent Hank Nowak. has been named in a federal court indictment In 1976 during the early tests of the Carter charging known Detroit gangsters. including Administration Nowa k participated in a national Emprise-linked Anthony Zerilli. with attempting to campaign to get President Carter to pardon Lewis purge state criminal records so that the gangsters Jacobs for an Emprise conviction in a Nevada could be approved by the Nevada Gaming Board to gambling case. Nowak cited the Jacobs brothers as take over a casino. According to the indictment. "pillars of their community" in his letter to the Robert Leonard advised Zerilli and his associates how Department of Justice. The Justice Department re­ to accomplish the record tampering. jected a pardon for Jacobs as totally "inappropriate."

44 U.S. REPORT EXECUTIVE INTELLIGENCE REVIEW Oct. 110-16. 1978 A similar surfacing of the direct links between the and dictates its moves from his home. a palatial West­ Bronfman machine and the vote fraud apparatus is chester estate. The county's Republican Party is underway in Westchester County. New York. where a shaped behind the scenes by John Loeb of the Loeb. challenge to the nominating petitions of U.S. Labor Rhoades investment bank. Although nominally a Party congressional candidate Michael Billington's Republican, sources in Westchester report that Loeb nominating petitions has been upheld by the "bi­ has done everything in his power to insure the partisan" Board of Elections. Westchester County successful election campaigns of Billington's follows the Michigan model of both the Republican Democratic Party opponent, Congressman Richard and Democratic Parties being heavily influenced and Ottinger, a longtime Fabian. John Loeb is married to funded through organized crime. In Westchester the former Mrs. Edgar Bronfman. County. Edgar Bronfman owns the Democratic Party. -Felice Gelman and Ba rbara Boyd

How organized crime runs vote fraud: preliminary investigation

City Key Controller

ST. LOUIS Morris Shenker

Investigative History Role in Vote-fraud apparat

• Owner of several Nevada casinos. Defended • 'Godfather' of the Clay political apparatus in St. Emprise and Jacobs brothers as their attorney . Louis , is heavily implicated in vote fraud .

• Under investigation for use of pension monies • Through associates. implicated in the setting up for organized crime purposes. the LEAA gangs in St . Louis who enforce fraud.

MICHIGAN Max Fisher

• An associate of the Purple Gang prohibition • A Fisher-linked Board of Elections official wrote smuggling operations. Li nked to Bronfman Public Act 94 , Michigan 's third party primary operations through this and through prominent law .

role in the Zionist Lobby. • Jewish Labor Committee elements are the core

• Through financing. heavily controls both of the UAW vote fraud machine in Michigan . and Democratic and Republican parties in Michigan. also the direct link to Fisher.

BUFFALO , N.Y. Max and J erry Jacobs

• A Bronfman-connected gangster family . Their • Through Joseph Crangle , exert control on Erie corporation. "Emprise." connected with County Democratic Party machine .

Arizona murder of reporter Don Bolles . Morris • Democratic Party ties include former party Shenker often works for them. chairman Lawrence O'Brien.

• Implicated in effort by ally. Nowak, to throw his opponent Ghandhi (U.S. Labor Party) off ballot .

WESTCHESTER CO. , N.Y. Edgar Bronfman , John Loeb

Bronfman

• Senior member of the Bronfman family. • The county 's bi-partisan Board of Elections

• Under investigation many times for organized challenged U.S. Labor Party 's candidate crime links and other illegal activities. Billington .

• Extremely powerful in Democratic Party . Loeb

• Controls Republican Party.

• Married to the former Mrs. Edgar Bronfman .

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW U.S. REPORT 45 Drugs and war: Edgar Bronfman views the world

A wide-ranging interview with the Seagram's boss

Liquor and banking magnate Edgar Bronfman my very deep concerns about that. Begin is playing a recently proposed U. S. legalization of marij uana as an very strange role, saying things like he's not going to "advantageous " basis for a new "common market" vote for dismantling the Sinai settlements ... in the between Ca nada, the U. S. , and Mexico. His remarks Knesset everybody's free to do what they want to. Now were contained in a post-Camp Da vid interview that I can understand why he would want to make every­ was recently made available to the Executive Intelli­ body independent and free to vote any way they want gence Review. Seagra ms Ch airman Bronfman, to, so that it doesn't become a party issue or a vote of leading figure in the British-tied networks of the no confidence, but why he should announce that he's Zionist Lobby, is the author of the "Middle East going to vote against it. .. vote against his own Treaty Organiza tion " proposal for the Mideast, and in agreement. . .. The thing that disturbs me about the intervie w he detailed his economic, military, and Begin is that if it falls apart nobody's ever going to diplomatic gra nd stra tegy. blame the American Administration ...they come out smelling like a rose no matter what happens ... Question : You've been particularly active in Carter and Vance did an unbelievable job. If it comes connection with recent Middle East developments. apart it wasn't their doing ... it will be because of You 're also identifi ed internationally as one of the something Sadat does or does not do or something spokesmen for a policy of a Middle Ea st Tr ea ty Begin does or does not do. If Begin plays his cards Orga niza tion . carefully, then the pressure's all on Sadat. But I don't Bronfman: Yes, I wrote an article about it. It see that Begin's going to play his cards carefully appeared on the op-ed page of the Ne w York Tim es. because I'm not so sure that in his heart of hearts he Q: Do you see Camp Da vid as leading toward such a doesn't really believe that Judea and Samaria belong development? to Israel even though what Israel would do with Bronfman: When I wrote the article I had no idea that another million Arabs demographically ...bewi lders Camp David was even going to take place and what me. the results would be. It just seems that long term it Q: In the Canadian Je wish News it was anticipated just has to be in America's interest and the free that Ch ina would be playing an interesting role on world's to make sure that the Russians don't get their behalf of Isra el. Ha s this been a fa ctor? hands on that oil. You can talk about nuclear bombs, Bronfman: I don't think so, up to now. But China is SALT, who has more capacity to destroy the other, but changing very rapidly. China as you know has been the ballgame's over pretty quickly if we can't get Arab very anti-Israel for some time. But this new oil. Either to Japan or to West Europe or to the United regime. .. there's been a different kind of an States and Canada. Somehow making that region (the outreach. I happen to be an officer of the World Jewish Middle East-ed.) solid has to be an American Congress ...of which the Canadian Jewish Congress imperative. It seems to me that it has to be an is a key part. .. and we have some feelings that it imperative for a lot of the so-called moderate Arabs would not be impossible for a Jewish group as a too, because I just can't conceive of the Saudis being Jewish group to visit China in the not too distant anything but what they are about Communism, the future. And that Red China is going to play some sort Russians... which is paranoid. I would guess that the of a role. Of course the role the Chinese always play is Shah of Iran is maybe more so, maybe less so, but also whatever will get the Russians mad. It's very paranoid about the Russians. Sadat has tried working predictable. If meddling on the side of Israel will with the Russians and it didn't work. Evidently their irritate the Russians, then they'll probably do it. But price was too high, too steep for economic aid and that's not clear yet I don't think. cooperation. I think probably the same thing is true for Assad in Syria. I think it's to the interest of the Q: Wh at do you anticipa te in terms of European Western World to try to get some peace, some stability response to Camp Da vid? Th e Europeans ha ve been in Lebanon, a place where so many people are being playing a maverick role in several areas. killed. The one problem which we really have not Bronfman: Well the French are always a bit of solved is what we do with all the refugees, the mischief makers aren't they. They won't have too displaced Palestinians. Because nobody really seems much trouble with the English, the Germans still feel to want them. guilt that we've made them feel all these years, but Now as far as Camp David's concerned, I think it the French are troublemakers. I really think that the went fairly far ...if it stays glued together and I have United States and I hope Canada will have to pursue

46 U.S. REPORT EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16, 1978 their own role directly in the Middle East and not still living as if energy were cheap. Energy is very really count on the European Economic Community to expensive. We've got to make people conservatives on be involved. Some two years ago there was a big battle energy. The only way to make people conserve is to going on in this country which was eventually more or get the price up . People are not going to insulate their less won on the question of the Arab boycott against homes and start using small cars and do all the things Jewish firms ...but we've never been able to get any that are necessary to save fuel if it's not going to be antiboycott legislation in the EEC. and it's because of expensive. The reason it's a political hot potato is that the French .... unfortunately the majority of Americans don't believe there's an energy shortage. They also don't believe Getting back to the Soviet question. Sen. Fra nk Q: that it should be expensive ; they think the oil Church (D-Id), I believe, made a statement ear/ier companies are gouging them, which isn't true. this week referring to a Grand AlJiance, something What they don't seem to realize is what's happening that would materially affect the balance of power to the U.S. dollar as a result of our wasting energy. between East and West. How is that likely to develop? Our balance of payments deficit is growing at an Bronfman: I think the first thing you have to have is abominable rate. and there's no way out of this unless peace treaties between Israel and its neighbors. Once we start to conserve energy. Our balance of payments you have a peace treaty between Israel and Egypt, is I think positive $8 billion without energy, but after Jordan has to come along and Syria eventually. energy it's a minus $40 billion .... There's no way Syria's going to attack Israel without the Egyptians and Jordanians helping them. That's Q: I know one of your continuing interests is Canada the first step. The second step is some kind of even though you've been a U.S. citizen for some time. economic planning in the region. The third step is a There is some discussion of expanded Canadian trade kind of common market where you have no tariff relations with the U. S. which would probably become barriers and have created an economic unit. important in terms of the energy program here. I know Felix Rohatyn has used the term common Q: Within the Middle East? market between the U. S., Canada and Mexico. Is this Bronfma n: Within the Middle East. These steps take something that you're fami/iar with? place slowly and then I think some kind of military Bronfman: I'm not really very familiar with it. alliance is possible. Intellectually I'm for it. But I think it's kind of a long Q. Th is is something that's being discussed in terms of way off. It would be very advantageous for Mexico, of North America also, I think, the mention of a common course, if we would legalize marijuana. Certainly market. between Canada and the United States to have a Bronfman: Well I'm always for it. Any kind of equal common market would be a marvelous thing. Before trade. Trade is an essential ingredient in the Middle Britain joined the Common Market in Europe, I used East. Just the simple fact that you don't want to bomb to envision that it would be great to have a common a country where you have your own factories ...and market of the United States, Britain and Canada as people get to know each other as well through trade. well as Australia - that kind of thing, but I really and when they get to know each other they don't hate haven't followed this closely enough to know what the each other ....That 's true on this side too. political realities are at the present time. And I also As far as the energy bill is concerned. Americans, don't know how Mr. Levesque would react to the for reasons which are very difficult to understand, are question !

Oct. 1 0-16. 1978 EXECUTIVE INTELLLlGENCE REVIEW U.S. REPORT 47 How Zion ists orchestrate Preparations fo r terror today, and the dirty history

The Medford Evans article, "The People of Moses prepared the accompanying condensed backg round Return To The Right," in the September 1978 issue of profile on the long history to date of creation and con­ the John Birch Society's American Opinion, is to be trol of the Klan by B'nai B'rith conduits of the British­ viewed as a highly significant signal for acceleration Canadian intelligence service. It is notable that much of "right-wing"-profiled terrorist preparations in the of Goldstein's information was developed from docu­ United States. The leadership of the Birch Society is mented sources dealing principally with the British performing a key part of the political deployment in assassination of President Abraham Lincoln. support of such terrorist preparations. Goldstein's background-profile aids the intelligence Birchite Congressman Larry McDonald (D-Ga.) is officer in getting directly at two vital points of also prominent in this, as are the Shelton branch of the investigations and count er-measures: (1) who con­ Ku Klux Klan, the Glenn Turner-Minuteman dePugh trols the Klan's terrorist and terrorist-supporting "Ten Million" operation, and the spokesman for the capabilities at present : (2) what the historically fascist international in the U.S., Zarapeth, N.J.'s demonstrated capabilities and vulnerabilities of Klan Frank Cappel. Of special interest in the case of terrorism are. Congressman McDonald is a key aide, John H. Rees, a Exemplary is the fact that the original Klan was British operative with a long and dir ty intelligence created as a resurrection of the Knights of the Golden pedigree. Circle, and that the creation was made by Judah Ben­ As an aid to intelligence specialists faced with the jamin, Bernard Baruch's grandfather, and a Catholic accelerating threat of terrorism, Paul Goldstein has priest. Both Benjamin 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, in turn, an agency of those Jesuit networks which, in In this section cooperation with theKnig hts of the Golden Circle, per­ The Minutemen and Ku Klux Klan networks that formed the main supporting role in the assassination sowed violence in the 1960s are being retooled for of Lincoln. renewed right-wing profiled terrorism in the Note also that the 1915 resurrection of the Klan was United States today. Our Terrorism section effected by individuals of the same political creden­ pulls together the story in three parts : U. S. tials. Although the target of Klan terrorist activities Labor Party Chairman and Contributing Editor was usually black Americans, the purpose of the Lyndon H. LaRouche discusses the key signs terror was to prevent southern Whig forces from gain­ pointing to the regroupment of right-wing ing a foothold on policy-making in the former Confed­ terrorist elements around the Ku Klux Klan and erate states - up into the 1930s ! John Birch Society, and dissects the broader The Birch turn British mob, and Zionist terrorist networks involved. Military Strategy editor Paul The article by Medford Evans, a leader of the 1960s­ Goldstein, also codirector of the U.S. Labor era "White Citizens' Councils," dovetails. precisely Party Security Staff, reports on the shocking with the present-day control of the Shelton Klan. That history of Zionist and British networks' role in dovetailing is not the primary significance of the creating and sustaining the Klan in the 19th and Evans article, but is a necessary by-product. The early 20th centuries. And Scott Thompson, a primary significance of the Evans article is the leading specialist on right-wing terrorist launching of a propaganda campaign to condition organizations, concludes the section with a Birchers and fraternal right circles to acceptance of report on the Klan and Minutemen terrorist an unconcealable alliance of the Birch leadership with networks today, and who's running them. the Bronfman interests and Edmond de Rothschild of France - both key links in the Zionist lobby forces

48 TERRORISM EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16, 1978 ------�)

KKK terror

behind it

behind proj ected "right-wing" terrorism in the U.S. . . . in Lebanon the Christians are identified with Intelligence officers should be warned of the the Right. the Moslems with the Left ... implications of such connections. The key agency second, . .. the Jews have supported the behind the proj ected involvement of Klan elements in Rightwing Christians against the Leftwing terrorism is the same agency that coordinates all Moslems of both Syria and Lebanon itself. You'd international terrorism (properly so termed) today: think Christian Conservatives in America would the Israeli Mossad. be concerned about this, but for the most part they This means the same network which killed a news­ seem just bored by it. (p. 31) paperman investigating Jacobs's connections in This is simply a lie. A majority of Lebanese Maronite Phoenix, Ariz. It means the U.S.-Caribbean "Mafia," Christians have depended on Syrian forces to protect which dovetails into casino and other sports opera­ them from the Falange. a Nazi organization created tions in the U.S. today. It means the international by the Nazi Party of Germany during the 1930s and illegal drug networks. It means the financial networks headed today by Hitler-admirer and Hitler-appointee of Mossad's Tibor Rosenbaum. It means the Bronf­ Pierre Gamayel. However. Evans's lies have their man-funded organizations that Attorney Jim Garrison purpose. investigated in connection with the conspiracy to Evans proceeds to condition his reader to the assassinate President John F. Kennedy. British-Zionist link: These are overall the same political and financial Like other Jewish customs. the practice of getting interests that have taken direction of the John Birch a gifted son to the top of a host government has Society on behalf of the British intelligence networks, been seen in modern times. Benjamin Disraeli the networks that created the Birch Society for deploy­ served the British well, and gave the title ment against President Eisenhower. It also means Empress to Queen Victoria as a present. No contaminated elements of the U.S. intelligence and empire has done more than the British Empire to security organizations, including influence played into benefit an ungrateful world. (emphasis added ; those agencies through large private intelligence p. 32) agencies owned by associates of Swiss-based Tibor With some intervening review of alleged or mooted­ Rosenbaum's operations. as-possible past Jewish errors, Evans proceeds to his It means that it is impossible to neutralize combined summary arguments : "right" and "left" terrorism in the U.S. without expel­ Over the whole course of history, Jews must be ling the Mossad and crushing the Zionist lobby at the regarded as the most conservative of peoples, for top levels. and also conducting the crackdown on top no other people (today not even the Chinese) have illegal-drug and organized-crime networks that no kept the same traditions so long . . . . They now U.S. Administration has dared to undertake to date. have no choice but to turn Right. Or, it would be more accurate to say, return to the Right, their historic position. (p. 36) Then, finally, the summation of the political dogma What Evans wrote -and why dished out to the credulous Birchers: . . . what are those enormous consequences which I said at the outset of this article might come from Evans's article begins on page 23 of the S�ptember issue of American Opinion, wandering through pages the Jewish return to the Right? The immediate of cautious conditioning of the reader before getting to specific is the defeat of the Carter Administration. the meat of his argument beginning on page 31. A In Carter. Jews fell for a wily Christian. Now, they sampling of excerpted passages from that point surely know better. A broader field is one in onward identifies the content and mechanisms of his which the Jews have comm anding influence: principal efforts : entertainment - the movies still, but nowadays

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW TERRORISM 49 television even more. The press, too, of course, and the academic world, which is influenced by the virtual synonymity in recent years of the words "intellectual" and "Jew." If the networks and Hollywood and the "New York Times" and The Rothsch i Id roots the "Washington Post" and Harvard and M.I.T. should follow the Jews and turn Right, the arrest of Soviet expansion would be assured, and the The political evolution of the Knights of the Ku Klux lamp of Liberty would continue for the forseeable Klan was a direct outcome of policies initiated during future to enlighten the world. (emphasis added ; the first half of the 19th century by the British italics in original replaced by quotation-mark set­ aristocracy and their "court Jews, the Rothschilds. offs ; p. 36) The combined capabilities of the key secret societies Evans's other remarks, as well as the way in which controlled by these circles - the Scottish Rite of he argues the cited points, are shaped to inform the Freemasonry, the B'nai B'rith (Order of the Sons of Bircher that it is not proposed that the Bircher love the Covenant) , and the Jesuits (Society of Jesus) - Jews, but that he enter into a tactical alliance with the allowed the British and allied Black Guelph circles to "powerful" Jewish control over - it seems - about nearly destroy the foundations of the United States everything, solely for the sake of winning Ye Goode republic through assassinations (including that of Olde CDlde Warre. Evans emulates the sort of Abraham Lincoln), terrorist operations, and general arguments the liberal press used during World War II subversive activity culminating in the War Between in behalf of the U.S.-Soviet alliance. He permits the The States. Bircher to keep his old grievances against the The starting point for unraveling this vast Rothschilds, but, for the present, only privately conspiratorial apparatus is the Knights of the Golden ("among just us folks"), to not love "Uncle Circle. Menachem," but to at least trust Begin's reliable The Knights of the Golden Circle combined the right-wing instincts. It 's all for the good of the cause. network of individuals associated directly with the This sort of innoculation of Birchers is made Scottish Rite of Freemasonry, B'nai B'rith, and the necessary by the accelerating exposure of the Mossad Jesuits. Practically the entire Confederate leadership and allied forces' responsibility, as agents of the belonged to the KGC at the point of the secessionist British Empire-Loyalist circles. for coordinating crisis in 1860. It is through tracing the lineage of the international terrorism, for coordinating a maj or part KGC that the Ku Klux Klan becomes an of the British-Canadian control of the illegal-drug understandable phenomenon. traffic. for control of organized crime. It's all for the However, to make fully comprehensible the good of the cause. Evans insists. significance of the combined relationship of these Those of us who have done in-depth studies of the secret societies, a short historical backdrop is first John Birch Society know that the publication of such necessary. an article in American Opinion ten years ago would Prior to and during the American Revolutionary have led quickly to the author's early. unpleasant War, and significantly afterwards, the British demise. Just as in the case of Senator Joseph initiated an intensive subversion effort aimed at tak­ McCarthy's campaigns, B'nai B'rith-linked forces ing over and destroying the Franklin-organized may be controlling the operation from behind the Freemason networks that functioned as the scenes, as they have in fact controlled the Birch organizing body for the revolution. The explicit Society, but it was not prudent to call attention to the counteroperation was the Scottish Rite of fact in certain "right-wing" circles. Even today, the Freemasonry, under the control of the British-Black mere publication of Evans's article represents a sharp Guelph-Knights of Malta organization. It was because political turn by the Birchers, a turn that involves a of this effort that many of the individuals who served very considerable risk to the stability of the the British in the KGC were also members of the organization. Scottish Rite. By itself such an article's publication would signal a It is equally significant that the abolitionist societies push from behind the scenes for some purpose of New England, as well as the entire secessionist important enough to hazard this degree of risk. We do states' rights movement, were all financed and not rely on merely such circumstantial information. basically controlled through the Rothschild-Baring We have other, more direct ways of knowing what bankers of the British monarchy. strings are being pulled among circles allied This political intelligence profile will concentrate on politically to McDonald and Shelton, who is pulling the closely connected evolution of three secret them, and to what purpose. The publication of the organizations : the Knights of the Golden Circle, the Evans piece, taken in that context, signals a certain B'nai B'rith, and the Ku Klux Klan. degree of maturity in on-going preparations for the projected wave of "right-wing" terrorism. -Lyndon H. LaRouche. Jr.

50 TERRORISM EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 of the Ku KI ux Kl an

The Knights of the Golden Circle responsible for financing several attempts to kidnap 1. Africans and bring them to the South. Significantly. "I hear a good deal about the association called the the SRCs served British intelligence by providing a Knights of the Golden Circle, a Protestant association functioning political infrastructure for the for securing the Gulf provinces and states. including secessionist movement and for the creation of other which has been largely developed by recent times . . . secret societies. in the Southern confederacy. and creating them into Two of the main centers of the SRC. and later the an independent government. " Knights of the Golden Circle. were New Orleans and Charleston. S.C. Secret orders such as the Order of the The above is taken from William Howard Russell's Lone Star were also set uP. then later merged directly book My Diary North and South, written in 1866 by the into the KGC. Key in organizing the New Orleans London Tim es war correspondent. Russell had gotten operations was Judah P. Benjamin. later to be the this assignment at a meeting on May 5, 1861 with Secretary of State of the Confederacy. of whom more Confederate leader General Pierre Beauregard, a below. leader of the KGC. Russell himself was serving his In 1854. Bickley surfaced with the organization Queen as a top British Secret Intelligence Service known as the Knights of the Golden Circle. Under the agent. profiling the 1861 crisis situation in the United banner of creating a "Democratic Monarchy in North States and reporting back to the Rothschild owner of America." its first operation was to organize paramilitary terrorism in Central America. Mexico. the London Tim es. (1) Originating out of the 1828-32 Nullification Crisis, the and Cuba. the purpose of which was to instigate a war KGC was not officially established until 1854 under the between the U.S. and Spain. One of its most successful direction of Dr. George William Lamb Bickley. early ventures was under the direction of William Bickley had been trained in Botany at the University Walker. who organized a military coup in Nicaragua of London in the 1840s, then redeployed back into the in 1855. U.S. The next phase of the KGC's activity was to organize Prior to the official surfacing of the KGC. however, a military coup in the U.S. before Lincoln could be the Southern Rights Clubs were established during the inaugurated. The KGC was used primarily as the height of Andrew Jackson's presidency. Their main terror force to ensure that the key Southern structure was identical with that of the southern states voted for secession. Its stated organizational branch of the Scottish Rite of Freemasonry with its purpose indicates the extent of its intentions at the prime political focus centered on a three-point time of the 1860 election of Lincoln : program. As stated in the KGC's manual, the three (1) Secure all U.S. arsenals ; points were : (2) Sabotage reconciliation between North and (1) Reestablish the sla ve trade ; (2) Acquire new slave territory ; South; (3) Concentrate on the border states: (3) Destroy the U.S. Constitution as a "tyrannical (a) coerce state legislatures or governors into document. " voting for secession ; Two of the leaders of the SRC were Robert Toombs (b) elect legislators to vote for secession ; and William Landes Yancey. Each was to play a (c) bring armed men from the cotton states : significant role in the Confederate government. (4) Set up Knights of the Safety Guards. watch over Toombs. a so-called Southern Whig, was personally men who are doubtful about secession ; (5) Organize guerrilla bands to harass union troops.

1. Documentation of the KGC's activity is quite extensive. under the direction of the Knights Gallant. the elite Most of the information in this report comes from primary corps within the Knights ; sources of the period. Particularly useful were: (6) Northern members were instructed to play Pumfrey. Jim. An authen tic exposition of the Knigh ts of "hypocrite roles" by loudly supporting Union efforts the Golden Cire/e. or a History of the Secession. by a former in order to act as spies ; member (Indianapolis. 1861). (7) Raise militias in the North. turn arms over to the Pittman, Ben. ed .. Th e Indianapolis Treason Tria l of 1865 (court transcript on the conspiracy by the Sons of Liberty. a South. and send Confederate ladies to spy in the later form of the KGC in Illinois. Indiana. and Ohio). North ; Holt. Joseph. An Officia l Report: A Western Conspiracy in (8) Assassination and terror. Aid of the Southern Rebe//ion. by Judge Advoca te Joseph Holt. "In short. the intention of the secessionist is to have

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW TERRORISM 5 1 a more powerful monarchy than England." according General. then Secretary of War. and last and most to KGC member Jim Pumfrey. (2) important, 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 Benjamin's activity. Central to the emblazened 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 middle of the triangle. The R meant 'revolution,' and functioning in Canada, with its headquarters in the 61 meant 1861. in other words. Revolution in 1861. Montreal. Not coincidentally. the hotel in Montreal. Meetings took place in "castles" or lodges. which St. Lawrence Hall. that headquartered the were organized on the local. state. and national level. Confederate Secret Service also was the headquarters On the state level they were referred to as "Grand of the British military mission. State Castles," with a delegate body .sent to the The head of Confederate espionage was Jacob "Grand United States Castle" or " American Legion." Thompson. a former Secretary of the Interior under In its organizational hierarchy. as reported by the Buchanan and a member of the KGC. Through Daily Louisville Democra t in 1861. the KGC was Thompson and another top British operative operating divided into three degrees or levels. The first degree in Canada named George Sanders. the plan to was the Foreign and Home Guards. the second degree assassinate Lincoln was finalized. was Commercial and Financial. and the third or The assassination was carried out by John Wilkes highest degree was the political governing body. the Booth. a member of the KGC, along with John American Legion. Each degree was divided into Harrison Surratt who had been trained by Jesuits at divisions which were in turn divided into departments. Jesuit Georgetown College (now known as The 10 departments comprising a division were Georgetown University). The two were under the Agriculture. Education. Manufacturing. Finance. Religion. Police. War. Navigation. Law. and a Foreign Office. Thus. when the Confederate government was established. the KGC was its ready-made leadership The symbols of body. With 65.000 KGC members in the South. and several members of President Buchanan's cabinet the Knights of

also members of the KGC. the plot to pull off a military coup nearly succeeded. the Golden Circle Central in the plot was the assassination of President-elect Abraham Lincoln. In February 1861 a plot to kill Lincoln was in place in Baltimore. Md. There. under a subunit known as the Palmetto Guards. the KGC planned the murder of Lincoln. It was only due to the efforts of General Winfield Scott. that the plan did not succeed - until four years later. During the Civil War the KGC was used to run subversion through the Democratic Party faction known as the Copperheads. or antiwar Democrats. With a plan for provoked outbreaks of violence and These two symbols (above. and right) were displayed terror combined with Confederate military inside the Knights of the Golden Circle "castles." operations. in Missouri. Illinois. Indiana. Ohio. Kentucky. Tennesee. and the cities of Chicago and New York. the Confederacy aimed to destroy the North's ability to fight. Draft riots aided by Jesuit priests. with the cooperation of the Mayors of New York and Chicago. Fernando Wood and Edward Walsh. as key conspirators. were designed to stop the war by forcing a negotiated settlement. All espionage and terror operations deployed into the North were under the direction of the Confederate Secretary of State. Judah P. Benjamin. Benjamin. a former U.S. Senator from Louisiana. was born in the British West Indies in 1811 and remained a British subject throughout his career in the U.S. Under the Confederacy Benj amin became first Attorney ThiS triangle appeared on Knights of the Golden Circle leaflets and on other publications. 2. See Pumfrey. ibid.

52 TERRORISM EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 immediate direction of Benjamin and Thompson. American Knights and The Sons of Liberty were two Most of the intelligence garnered and reported by new names it took before it became the Ku Klux Klan. Union counterespionage operations was suppressed at the Lincoln assassination trial by Secretary of War Edwin Stanton. Stanton had known Benjamin quite 2. 8'nai 8'rith, or the Independent Order intimately since 1850, when both were deployed by the U.S. government as members of the California Land of the Sons of the Covenant Commission : Stanton headed up the commission and Israel Joseph Benjamin, a European Sephardic Jew. had Benjamin as his able assistant. toured the U.S. in 1859-62. Benjamin (no relation to It is now known that not only did John Harrison Judah Benjamin, although the two met) was part of a Surrat escape capture through the efforts of two Jesuit network of humanists associated with Alexander von priests and wound up in the Papal Zouaves, but that Hum boldt deployed to profile Jewish organizations in Booth also escaped. The coverup "killing" of Booth at the U.S. In a book titled Three Yeas in America he Garrett's farm was carried out by Union officers who described the B'nai B'rith as follows: were highest-degree members of the Scottish Rite of "This is a secret society, like the Freemasons, with Freemasonry. Even the head of the National passwords, signs, and the like ...still I think that Detective Bureau, Lafayette C. Baker, who was later existence of such an organization is not at all poisoned to death, revealed in documents only necessary . , . " recently published that he knew that the individual The B'nai B'rith was officially founded in October found in the burned-out barn was not Booth. 1843, as part of the Rothschild and British monarchy The KGC underwent several face lifts to prevent effort to establish what is today known as the Zionist detection, and rechristened itself. The Order of the movement. Founders of the B'nai B'rith, the Order of the Sons of the Covenant, in the U.S. were members of the financial heirarchy of the Rothschild circles, including the Seligmans and Dr. Kuttner Baruch from Charleston, S.C., the father of British agent Bernard Baruch. The elder Baruch was later responsible, along with Judah Benjamin, for setting up and financing the Ku Klux Klan. The B'nai B'rith was ostensibly organized so that the Jews could have their own Freemason organization. But its real purpose was to provide the basis from which to finance the subversion of the U.S., and use the U.S. as a base for deploying these ..... ,.. networks internationally to protect the Rothschild - - interests. There were over 44 Jewish organizations in ,..0, 1//.... the U.S. along which provided the Rothschilds their " , service. I I \ "The name of Rothschild. in all countries, is a synonym for honor and generosity. and no name in Europe has popularity so great and so well-merited. The Rothschilds in France occupy a social position even higher than that of the English branch of the family ....considered equals of the oldest of French nobility . . . . " "The Jewish religion has many observances and * customs corresponding to the secret societies known to us. The synagogue. for instance, might be compared to a lodge room . . . . The sign consisted of 1------"{r*...... the grip given with a full hand. and the magical words Sholem Alachem. The messusah (religious artifact) was the countersign. Shema Israel (Hear 0 Israel) was the password." Both of these passages come from the original magazine publication of the B'nai B'rith. Th e Menorah. The magazine's editor was one of the B'nai The flag of the Confederacy repeated the Knights of the Golden Circle's 15 stars motif in a form echoing the B'rith's members. Benjamin Franklin Peixotto. who British flag. later. as a U.S. consul to Romania established the B'nai B'rith there under the name of the Order of Zion.

Oct. 10-16, 1978 EXECUTIVE INTELLIGENCE REVIEW TERRORISM 53 He also operated as a Rothschild agent in the Knights of Malta, the "hooded ones." The use of overthrowing the government of Romania and placing the Greek word kuklos. meaning circle. emphasized King Charles on the throne, thereby giving the the continuity with the Knights of the Golden Circle Rothschilds a firm Balkan foothold from which to and underlined the belief in the magical power of the penetrate Russia. circle. a derivative from the ancient cult practices of By 1860, this secret order had established the antiquity. international Zionist networks under the name of the The KKK's usefulness to the Rothschilds and the Israelite Universal Alliance. It was the combination of British aristocracy was its aid in preventing any the B'nai B'rith and the Knights of the Golden Circle semblance of Lincoln's reconstruction effort from that gave birth to the Knights of the Ku Klux Klan. succeeding. Originally led by Imperial Wizard Importantly, the whole Order of Zion project was General John T. Morgan, who during the Civil War developed during the late 1830s and early 1840s by the had participated in the KGC's attempts to foment Earl of Shaftesbury and Benjamin Disraeli. An 1862 uprisings in the North, the KKK was then turned over expose by Samuel Morse on "The Present Attempt to to a leader more suitable to the circumstances of the Dissolve the Union, A British Aristocratic Plot" postbellum South : the world's first guerrilla warfare identified Shaftesbury as the organizer and funder, expert, Nathan Bedford Forrest. (Morgan had operating from Exeter House in London, of the meanwhile become a U.S. Senator.) The terrorist abolitionist movement in the U.S. Disraeli, later to campaigns that ensued thanks to the KKK are well become Britain's Prime Minister, was the key 19th documented. ' century figure around which the Zionist networks After the Reconstruction era, the KKK was dormant were built. Disraeli himself, a Sephardic Jew, for a few decades. But it was resurrected in 1915, when became part of the Cult of Isis after an 1830-31 sojourn two members of the Knights of Malta-Red Cross to Malta, Greece, Turkey, and Jerusalem. organization formed something called the "Invisible Empire," under the direction of a man named William Joseph Simmons. The essential difference between the original Klan and this new version was while 3. The Knights of Ku Klux Klan members of the original Klan could be Jewish or Catholic, the new belief structure was that of a "race Central to the reorganization of the KGC was Judah P. purist" cult. The "Nordic" myth used to reorganize Benjamin. It should be remembered that Benjamin the KKK was a parallel deployment to the never relinquished his British citizenship when he development of the Nazi ideology a few years later. served the U.S. Senate or the Confederacy: indeed, In a 1924 interview published in the English right after the assassination of Lincoln, Benjamin Speaking Union magazine Landmark. Imperial escaped to England, where he worked for the London Wizard Dr. H.W. Evans announced that the Nordic DailY Telegraph and later became the Queen's belief structure was the essence of the KKK ideology. Counsel for Lancastershire. In a reply, Rothschild agent Israel Znagwill, the In December 1865, the Knights of Ku Klux Klan was author of a project to have Jews settle in South Africa founded under the leadership of General John T. at the turn of the century, gave as his primary Morgan, General Albert Pike (the latter known as the "objection" to the KKK that it excluded Jews from its "father of the Freemasonry in the South"), and a membership. small group of confederate officers, in a place outside Another of the lesser-known aspects of the KKK is of Pulaski, Tenn. What is less well known is the fact the fact that in the 1930s, Franklin Delano Roosevelt's that the Knights of the KKK was Judah Benjamin's electoral victory in the South was due to the role of the brainchild. "Southern Roosevelt Clubs" organized by the KKK. P.rior to his escape to England, Benjamin met with Meanwhile, the well-documented terror operation the top Confederate military leadership to establish against Southern blacks continued. the basis for the consecration of the Invisible Empire The reemergence of the KKK during the late 1950s of the KKK. The financing would be provided by Dr. and 1960s was again centered in the South, and now its Kuttner Baruch of the B'nai B'rith, who was already purpose was to foment race war between blacks and in Charleston financing the secessionist movement. whites. With the other side of the set-up, the civil The international agent deployed to England to rights movement, largely under the control of the maintain contact with Benjamin in 1867 was a Catholic various liberal British-controlled networks acting bishop, a Jesuit named Richard Wilmer. through the B'nai B'rith's Anti-Defamation League The belief structure of the KKK was nearly identical and allied institutions, the contrived race war to that of the Knights of the Golden Circle. The "fiery scenario enjoyed sigrtificant success. Today that same cross" became the symbol of the new order, with terror capability is still in place, and still under the dress and other formalities identical to the KGC and control of the same forces. - Pa ul Goldstein

54 TERRORISM EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978 How Klan-Zionist terror operates today

Medford Evans's call for an alliance between the ex­ Reliable sources within the Committee report that treme right and the Zionist lobby in the September funds raised by these "conservative supersalesmen" issue of the John Birch Society's American Opinion and laundered funds both from Croatian Ustashi net­ magazine does not merely acknowledge the long­ works (organized out of the former secret police of the standing fact of the support and funding by such Zion­ Quisling government of the Nazi-occupied "Indepen­ ist organizations as B'nai B'rith and the Anti-Defama­ dent State of Croatia") and from the ADL. have tion League of the Ku Klux Klan. the American Nazi already been funneled into reactivating former Party. and similar racist and anti-Semitic organiza­ Minutemen hit teams. It is known that DePugh has tions. given orders to one such team to begin the profiling More importantly. the article is intended to help pro­ and other preliminary steps for an assassination voke a factional regroupment of the U.S. right wing attempt upon Lyndon H. LaRouche. Jr., chairman of which will set the stage for a renewed upsurge of Klan the U.S. Labor Party. and other right-wing violence and terrorism. On the one hand. it is planned. semi-respectable elements 19608 violence like the Birch Society membership will be able to ally The Zionist-right wing terrorist potential represented openly with the social democrats of the American in this regroupment is no idle danger. In the violence­ Jewish Committee for an attack upon the "Georgia ridden 1960s civil rights era, Evans's "White Citizens' Mafia" grouping within the Carter Administration. Councils" - which had several Zionist lobby agents in and for a return to a cold war foreign policy. On the key leadership posts - were the bulwark of the Klan. other hand. the ADL-coordinated Klan and neo-Nazi Sources in the Klan suspect one of these Zionist gangs which constitute the "anti-Semitic" right agents, who occupied a treasurer's post in the (epitomized by the case of Frank "Cohen" Collin. the Citizens' Councils, of laundering funds supplied by the Jewish-born "Fuhrer" of the National Socialist Party Anti-Defamation League into the racist group. of America) are being geared up for a major outbreak According to former Klan leader Roy Frankhouser. of terrorism within the United States. playing upon who was among the first to expose the manipulation of right-vs.-left. J ew-vs.-Nazi profiled lines. both sides in the civil rights conflict by British-Zionist lobby agents, the ADL collaborated with John Doar. Committee of Ten Million the Kennedys' chief civil rights troubleshooter. to plot According to sources in regular contact with Evans. a triple assassination of civil rights figures in 1964 at both Evans and Birch leader Larry McDonald - a the height of "Mississippi Summer," when thousands Democratic congressman from Georgia - are collab­ of civil rights organizers trained under grants from orating directly with Robert DePugh. head of the the Field Foundation. Stern Foundation. James P. defunct Minutemen paramilitary operation. to form a Warburg and others were flooding the South. Had this "Committee of Ten Million." Ostensibly intended for assassination plot not been aborted by members of the massive right-wing intervention into the 1980 presi­ U.S. intelligence community. it would have pitched dential election. the Committee's primary purpose. the U.S. into bloody chaos and confusion. sources within the U.S. intelligence community The intended targets of the 1964 conspiracy were the report. is to serve as a cover for massive "dirty three young civil rights organizers. Michael tricks" similar to those carried out jointly by DePugh. Schwerner. Andrew Goodman, and James Chaney, McDonald. and Buckleyite political hatchetman who were found murdered near Philadelphia, Miss., Richard Viguerie to head off effective conservative on Aug. 4, 1964 ; Sam Bowers. Imperial Wizard of the opposition to President Carter and to cover up the vote Mississippi White Knights of the Ku Klux Klan ; and fraud carried out by Carter's Zionist lobby supporters Martin Luther King. Delmar Dennis. the key agent in the 1976 election. within the Klan who helped arrange this plot. was A primary function of the Comm ittee will be to later employed by the John Birch Society. Birch reactivate the networks of professional assassins and leaders John Rees and Herbert Rommerstein were terrorists who were the core of DePugh's Minutemen implicated in the resurrection of this triple operation. Glen Turner, who ran the notorious Coscot assassination plot scenario in 1968 which ignited a cosmetics pyramiding swindle in Florida, has been wave of urban riots. deployed to provide DePugh and Co. with behavior It was also Frankhouser who, in a 1976 expose in the motivational techniques to build an army of what Washington Star. first revealed the fact that Gary DePugh is calling "patriots for profit," as a cover for Thomas Rowe, the government's star witness against this deadly capability. the Klan murderers of civil rights organizer Viola

Oct. 10-16. 1978 EXECUTIVE INTELLIGENCE REVIEW TERRORISM 55 Liuzzo. had himself committed this murder and other organization had nothing to do with the irregular violent acts that were pinned on duped Klansmen. forces of the American Revolutionary Army by that Rowe was an agent for John Doar and. through him. of name. but was modeled in fact upon the Secret Army the Zionist lobby. of England. The Secret Army of England was Robert Shelton. who has inherited this tradition as deployed as a strikebreaking force in that country in Imperial Wizard of the United Klans of America and the 1920s. and elements of it were later incorporated who works closely with DePugh and The Committee. into Fabian Sir Oswald Mosely's British Union of is controlled by the same Zionist-right wing networks. Fascists with support of the British nobility. While Typifying the lines of this control is the case of Eugene many otherwise patriotic members of the U.S. Tabbhut. who. as Chief of the Klan Bureau of intelligence community were involved with the Investigation in the 1960s. determined who was and Minutemen in the belief that it was a last gasp defense was not an "agent" and. therefore. the composition of in the event of war or a weapon against British Shelton's United Klans of America. FBI documents "Fabian" networks in the U.S .. effective control was released under the Freedom of Information Act exercised by the then head of the domestic branch of indicate that throughout his career Tabbhut was an the CIA. Tracy Barnes. who is a member of the British agent of the American Jewish Committee and the Knights of Malta. and by the dubious former CIA Anti-Defamation League, whose activities also counterintelligence chief James Angleton. included the theft of documents from the office of an Under the direction of Angleton. whose motives are opponent of Zionist lobby Congressman Bill Green in still unclear. and of certain "Buckleyite" layers within Philadelphia for publication in the Philadelphia the intelligence community. the Minutemen became a In quirer, then owned by Walter Annenberg. a Zionist manpower pool for every kind of international lobby leader and former U.S. Ambassador to Great destabilization and terror operation. T�ese included Britain. aid to joint efforts by Israeli intelligence and Black Tabbhut was also in the employ of the British­ Maltese forces in Europe in repeated attempts to controlled pretender to the throne of Yugoslavia. King assassinate French President Charles de Gaulle. Peter II. in the 1960s when the "king." who resided in using the Algerian Secret Army Organization as the United States. broke off from the Russian branch hitmen. Contaminated elements of the Minutemen of the Order of St. John of Jerusalem to form his own show up repeatedly with Clay Shaw of the Bronfman Knights of Malta group. This new Knights of Malta family's Permidex Corporation around the grouping joined together elements of the Croatian assassination of President John F. Kennedy. in a Ustashi and other Eastern European fascist groups. manner which has yet to be seriously explored. with Zionist lobby financial support. Such Furthermore. a "Minutemen" training camp in New collaboration between the Zionist lobby and Nazi war Orleans. donated by associates of Israeli Mossad's criminals and similar strata in the U.S. is not unusual. Mafia chieftain Meyer Lansky. has been publicly The ADL gave its "torch of freedom" human rights implicated in several attempts to assassinate Fidel award to Rev. Vladimir Klodnycky in Newark, N.J .. Castro. Much more concerning these operations could ostensibly for saving Jewish lives during pogroms in be said. but the essential point is that the Minutemen 1919 in the Ukraine . By his own account. Klodnycky. at had nothing to do with the national security of the the time a major in the notoriously anti-Semitic White United States. They were in fact a major vehicle for Russian armed forces. also imprisoned Jews until carrying out international "black operations." they had met his extortionary demand for 1 million It was the Minutemen too who throughout the 1960s karbovantsi ransom. Again. when the U.S. Labor played an integral role in contrived warfare with Party sought to expose the war crimes record of two terrorist gangs coordinated by the "left-wing" "ex-Ustashi" in Cleveland. Ohio. the local Anti­ Institute for Policy Studies (with which DePugh was Defamation League official who confirmed their war actually ,in direct liaison). following the model of record was fired when he discovered that the ADL British "surrogate warfare" operations. This headquarters in N.Y. had likewise given them awards. "surrogate warfare." involving both the "antiwar" and he demanded an explanation. and civil rights movements. culminated for the Minutemen in 1968. with a complete takeover of the organization and establishment of total control over "Secret army of England" According to intelligence community sources privy to the brainwashed DePugh by Kennedy holdovers in the the founding of DePugh's Minutemen. the Justice Department. in collaboration with the ADL. - Scott Th ompson

56 TERRORISM EXECUTIVE INTELLIGENCE REVIEW Oct. 10-16. 1978