The Web of Subversion BOOKSBYJAMESBURNHAM THE MANAGERIAL REVOLUTION THE MACHIAVELLIANS THE STRUGGLE FOR THE WORLD THE COMING DEFEAT OF COMMUNISM CONTAINMENT OR LIBERATION? THE WEB OF SUBVERSION INTRODUCTION TO PHILOSOPHICAL ANALYSIS (With Philip Wheelwright) THE CASE FOR DE GAULLE (With André Malraux) JAMES BURNHAM The Web of Subversion UNDERGROUND NETWORKS IN THE U. S. GOVERNMENT THE JOHN DAY COMPANY New York Copyright, 1954, by James Burnham Library of Congress Catalog Card Number: 54-7583 All rights reserved. This book, or parts thereof, must not be reproduced in any form without permission. Published by The John Day Com­ pany, 62 West 45th Street, New York 36, N .Y., and on the same day in Canada by Longmans, Green & Company, Toronto. MANUFACTURED IN THE UNITED STATES OF AMERICA AMERICAN BOOK-STRATFORD PRESS, INC. NEW YORK Acknowledgments THE ORIGINALIDEA for this book, and many specific suggestions for the way in which to write it, came from Paul Palmer. I wish to thank the staffs of the Senate Subcommittee on Internal Security, the House Committee on Un -American Activities and the Senate Permanent Subcommittee on Inves­ tigations for their invariably courteous and informed as­ sistance. I am indebted to C. Dickerman Williams for illumination on the subject of the Fifth Amendment, and for supplying the quotations concerning it that I have used in Chapters 2 and 17. I am grateful to Random House for permission to quote from Witness, by Whittaker Chambers (1952). My wife has helped me throughout, in the analysis of the enormous mass of evidence upon which this book is based as well as in the technical preparation of the manuscript. JAMES BURNHAM Kent, Connecticut January, 1954 Contents 1. The Senate Caucus Room 3 2. Spiders or Flies? 15 3· Two Truth Tellers 32 4. Three Web Dwellers 46 5. The Spinning of the Web 65 6. On the Threshold 75 7. The Reception Halls 84 8. Phase I : The Economie Agencies (1933-40) 95 9· Phase II: The War Agencies (1940-44) 108 10. Phase III: The International Agencies (1944- ) 125 l I. State and Treasury 139 12. White House and Pentagon 159 13. The Capitol 179 14. The Atom in the Web 188 15. Sleeper Apparatus 203 16. How Much Damage? 214 l 7. What Is To Be Done? 222 References 237 Index 243 The Web of Subversion CHAPTER 1 THE SENATE CAUCUS ROOM A FEW MINUTES before 10 o'clock on the moming of May 1, 1953 my wife and I entered room 318, Senate Office Building. Like many other rooms on Capitol Hill-in the splendid Capitol building itself, in the two House Office Buildings and the Library of Congress-No. 318, the Senate Caucus Room, caught the look of dignity and measured pur­ pose that marked the Republic's early days. It is large, noble in proportions, high-ceilinged, with handsome, light-colored panelling. Across one end was a long, fixed table, like a judge's bench. Severa! chairs were in back of this, and a few in front. Far­ ther out, at right angles, were a half dozen tables for report­ ers. Off to each side were small groups of chairs for such spe­ cial visitors as the relations or close friends of senators. All this occupied about a third of the room. In the remainder there were three or four hundred chairs for whoever might enter, for the citizens of a free country who might want to watch their representatives carrying out their duties, for the merely curious, or even for enemies who for whatever pur­ pose of checkup or intimidation might want to corne. As we entered , television equipment was being adjusted. There was no excitement. It was plain that nothing special was expected, that all was routine. A few reporters , wander­ ing casually in, chatted with each other. The general audi­ ence never numbered more than sixty or seventy. Half of 3 4 The Web of Subversion them we recognized from the other similar hearings that we had watched: specialists; professionals in subversion (on one or the other side); observers for the military intelligence services, the FBI, the Central Intelligence Agency; informal representatives of four or five foreign governments. The rest were Public, just anyone who happened to open the door, tourists from Nebraska, high school seniors from Nashville who had won a bus trip to Washington, a couple of old men who had nothing else to do. All through the hearing that soon began, the Public drifted in and out. Sorne had only a few minutes allotted to this official "sight" of a conducted tour. Others were quickly bored. There were a few, though, who came, who realized suddenly, with a tightening of the face, what was unfolding there, and who stayed. Senator William E. Jenner of Indiana, in a fresh, grey double-breasted suit, took the chair in the middle of the front table, or bench. The Subcommittee on Interna! Secu­ rity of the Senate Judiciary Committee was about to begin its session. When the Democrats had lost control of Congress, Senator Jenner, replacing Democratic Senator Pat McCarran of Nevada, had become the subcommittee chairman. He was joined that morning by Senator Herman Welker of Idaho; the subcommittee's director of research , Benjamin Mandel; and the subcommittee counsel, Robert Morris. Two men entered from a side door and took chairs imme­ diately in front of the senators, across the bench. One, obvi­ ously the witness, was slight, rather nervous in manner, with close-cropped hair. He was dressed in a dull suit of greenish cast. He was Anybody, Nobody. There would have been no reason to notice him, for good or ill. The other was, by his manner and brief case, the attorney. The TV lights and cameras started, along with the open­ ing of the hearing. The witness, whose name turned out to be Edward J. Fitzgerald, was questioned principally by Rob­ ert Morris, occasionally by one of the senators. His voice was undistinguished, low and hard to follow. The Senate Caucus Room 5 There was nothing remarkable in the official story of his career, as this emerged under Robert Morris' steady ques­ tioning, supplemented by the documents that Benjamin Mandel had always exactly at hand. 1 After study at the Uni­ versity of Vermont during the depression days, and a brief job on a "Eugenic Survey," Edward Fitzgerald went to work, as many a young man has done, for "the government." And, as some do, he prospered. He climbed, indeed, rather quickly for one who had had no special training and no highly placed family connections. Fitzgerald began in 1936 with an agency called the Na­ tional Research Project. This was a branch of the depres­ sion-born Works Progress Administration (WPA), and was located . in Philadelphia. Most of the few citizens who ever noticed the name of the National Research Project have long ago forgotten it. But let it now be remembered. It is not unimportant for our story. hs director was a man named David Weintraub, whose chief assistant was one Irving Kap­ lan. Those names also we shall frequently meet again. Fitzgerald's initial salary was a modest $1,800 a year, but it rose fast for those depression -days. By 1941, always with David Weintraub's kindly sponsoring, it had reached $4,000. In that year Fitzgerald accepted a reduction to $3,200 when he shifted first to the Federal Security Agency and then to the Federal Works Agency. His modesty was soon rewarded. By 1942, a year later, he had completed a shift to the War Production Board, where, as "Principal Economist," he was drawing $5,600. His advance continued through a period in the Foreign Economie Administration and then the Depart­ ment of Commerce. When he resigned from Commerce in September 1947, he had topped $8,000. There Edward Fitzgerald might seem to be-in appear­ ance, manner and the framework of his career indistinguish­ able from ten thousand others. Why, then, was he in that chair that morning? The record gives the incredible answer. 1 Numbered references will be found at the end of the book. 6 The Web of Subversion In November 1945, two years before Fitzgerald resigned from his last government job, the Federal Bureau of Investi­ gation prepared a top secret memorandum that was circu­ lated a few weeks later among high government officiais. It was this memorandum to which Attorney General Brownell referred in the speech on the Harry Dexter White case that he delivered in Chicago, November 6, 1953. One paragraph of the memorandum read as follows: The head of the next most important group of Soviet espionage agents with whom Bentley has maintained liaison was Victor Perlo of the War Production Board. Members of this group were introduced to Bentley in 1944 at the apartment of John Abt, general counsel of the Amalgamated Clothing Workers of America, CIO, in New York City. The individuals in this group in­ dude Charles Kramer ... ; Henry Magdoff of the War Production Board; Edward Fitzgerald, formerly of the Treasury Department and then with the War Produc­ tion Board .... Soviet espionage-that is, spying: the unauthorized trans­ mission of information to a government that is officially dedi­ cated to the destruction of the United States government and the American form of society. A generation or even a decade ago, the suggestion of such a charge would have seemed to most Americans unbelievable, absurd. Did Edward Fitz­ gerald, then, at once and most indignantly deny it? Let us consult the record: Mr. MORRIS.Were you a member of the espionage ring described in that memorandum? Mr.