by Philip Dray
The paranoia of the Red Scare era in Washington associated with the investigations of Senator Joseph McCarthy was extensive enough to cause worry at the CIA over the ceding of so much power to Lovestone and the other FTUC representatives. It was not overlooked that Lovestone, as well as some of his closest colleagues, all of whom were taking CIA money, had themselves once been ardent Communists. Of particular concern was a man named Carmel Offie, a veteran Foreign Service officer known as “Mr. Fixit” for his numerous contacts throughout Russia and Western Europe. Offie was close friends with the Kennedy family, had been a favorite bridge partner of Mrs. Wallis Simpson, and seemed to know anyone worth knowing in the transatlantic diplomatic sphere. He served as chief liaison between FTUC and the CIA, although his sympathies came to rest more with FTUC; for this he was regarded with increasing distrust by the CIA, and soon had the FBI and Senator McCarthy investigating his homosexuality and political background. To add to FTUC’s image problems, Lovestone and Brown were soon targeted by the conservative columnist Westbrook Pegler, who alleged they were Communists who had wormed their way into guiding U.S. government actions in Europe. Similar suspicions were voiced in 1954 by Assistant Secretary of Labor Spencer Miller, who testified about Lovestone and his ring of operatives before HUAC.72
After the merger of the AFL and CIO in 1955, the AFL chaffed at the possibility it would be required to share CIA funding with the CIO. But the merger, by making the CIO complicit in the AFL’s foreign entanglements, presented other, more ideological, problems.73 Walter and Victor Reuther, as critics were eager to point out, had themselves once transferred $50,000 in U.S. funds to a German labor union, but generally the brothers Reuther disapproved of FTUC’s cloak-and-dagger subversion of trade unions abroad and of anti-red bashing generally; Walter termed it “a destructive monomania.”74 Reuther-Meany antagonism over this issue became public in December 1955 when Meany derided the Indian prime minister, Jawaharlal Nehru, as a Communist sympathizer, angering Indian trade unionists. Reuther, at the request of U.S. ambassador to India John Sherman Cooper, embarked in spring 1956 on a goodwill journey to make amends, giving speeches to Indian labor groups and praising Nehru publicly as a respected statesman and world leader. A few years later Reuther again turned diplomat when, in 1959, Russian premier Nikita Khrushchev toured the United States. Meany adamantly refused to meet with the Soviet leader, while Reuther and other labor officials hosted a “workers’ dinner” for the visitor and his entourage in San Francisco.
Meany dismissed Reuther’s criticisms of the AFL’s international skullduggery as those of a weak-kneed liberal, although it’s likely that what partly annoyed the AFL-CIO chief was the consistently favorable reception Reuther received abroad. No doubt Meany was also aware that Reuther disapproved of the AFL leader’s professional habits and decorum. If Reuther “represented the afterglow of the labor idealism of the thirties,” as historian Arthur Schlesinger Jr. suggests, Meany was every inch the national union executive, embracing all the trappings of high office.75 Meany dined in elegant restaurants, smoked expensive cigars, and convened the AFL-CIO winter council meeting each year at a beachfront hotel in Miami. Reuther earned a third of Meany’s salary, carefully monitored his official expenditures, and donated proceeds from his speeches to a college fund for workers’ children. An abstainer of both tobacco and alcohol, he disliked wearing a tuxedo and believed labor leaders should live like the workers they represented; he let it be known he thought that holding meetings for union big shots in sunny Florida was an affront to most rank and file, who spent their winters in Northern industrial cities. A favorite story around UAW headquarters told how the famously proper Reuther, upset that male visitors to his office invariably stared at his secretary’s legs, demanded a front panel be installed on her desk.76
The American interference in the labor movements of other nations was not limited to Europe, but extended to Israel, China, and increasingly Latin America. A characteristic endeavor was the American Institute for Free Labor Development (AIFLD), created in 1962 and led by George Meany and J. Peter Grace, CEO of W. R. Grace & Co. Funded by the federal government, the AFL-CIO, and contributions from U.S. corporations, the AIFLD operated in the guise of an educational program to inculcate principles of democratic unionism (and a dread of Communism) among Latin American labor leaders. Victor Reuther, a critic of the program, scoffed at its absurdity—the very U.S. corporations that had frequently exploited Latin American workers presuming to instruct them about the importance of democracy. The AIFLD staged local symposia and training programs for as many as two hundred thousand Latin American unionists and cultivated some eleven hundred for special training at an AIFLD facility in Front Royal, Virginia, known as “the Little Anti-Red Schoolhouse.”77
The AIFLD’s fingerprints were later found on a number of U.S. covert incursions in Latin America—including the toppling in 1954 of the labor-supported Guatemalan government of Jacobo Arbenz, whose land reforms were opposed by the United Fruit Company, the CIA, and the AFL-CIO. Arbenz had won the presidency of the small Central American nation in 1950 by taking on the vested interests of wealthy landowners and major American agricultural concerns. He had installed in his government some Communists who had backed his election, and in 1953 announced his intention to reclaim lands controlled by United Fruit in the name of the Guatemalan people. Working with Serafino Romualdi, a veteran Italian anti-Communist and CIA operative whom Arbenz had sent into exile, AIFLD abetted a Guatemalan uprising led by the CIA-backed military “liberator” Colonel Carlos Castillo Armas. The collapse of Arbenz’s government was cheered in America, but Colonel Armas soon revealed himself to be a right-wing dictator intent on murdering his political opponents and eradicating the country’s trade unions.
The CIA went on to use an AFL-CIO supported union in British Guiana in 1961 to undermine the duly elected government of Prime Minister Cheddi Jagan, and AIFLD and AFL-CIO staff were involved in the overthrow of labor-friendly governments in the Dominican Republic in 1965 and in Chile in 1973. “We have permitted our unions to become perverted by the dogma of anti-Communism to the point where we support clearly fascist governments,” wrote investigative reporter Fred Hirsch in the wake of the CIA-engineered toppling of Chilean president Salvador Allende. “Now workers in other countries find it impossible to know the difference between the AFL-CIO and the CIA, and the term ‘AFL-CIA’ has become a standard joke that is never funny.”78
The U.S. meddling in the affairs of foreign labor unions remained a secret for many years, revelations first surfacing by accident in the mid-1960s during hearings into tax-exempt philanthropic foundations by Democratic congressman Wright Patman of Texas. Patman, whose Small Business subcommittee was looking for tax abuses, stumbled onto evidence that various real and dummy U.S. philanthropic foundations were used by the CIA as a “secret conduit” to direct U.S. funds to covert operations like Jay Lovestone’s. American unions also appeared to be involved, as the treasuries of the Oil, Chemical and Atomic Workers (OCAW) as well as the American Newspaper Guild were among those used to pass through large cash payments. One item that caught Patman’s eye was an unusually large grant of $395,000 from the J. M. Kaplan Fund, a philanthropy that supported civic improvements in New York City, to the Institute of International Labor Research, a group operated by Sacha Volman, a Romanian refugee “who has long been identified with anti-communist causes in Europe and Latin America.”79 Angered when his queries about the money trail were stonewalled, Patman went public, causing an article about the mysterious CIA funds to appear in the New York Times on September 1, 1964. “I feel I have been trifled with,” Patman complained, citing the failure of anyone to offer an explanation for what he’d uncovered.80
The article, headlined “Patman Attacks ‘Secret’ CIA Link,” astonished many readers, for at the time the American public knew little about the CIA aside from the fact that some of its operatives had been involved in the failed Bay of Pigs invasion of April 1961. Meany issued at on
ce what would become a stock denial of any AFL-CIO involvement with other countries’ labor unions, while Patman, who had obviously been tapped firmly on the shoulder by sources high in the government, immediately tried to backpedal, telling reporters in a statement that the CIA did not belong in his committee’s investigation of private foundations.
But it was too late. Critics pounced on the revelations, including the report that the foundations were distributing the laundered U.S. dollars to conservative research groups and individual scholars both in America and on foreign soil. It appeared the integrity of all American researchers or fieldworkers abroad would be compromised. Of course for the moment the extent of Lovestone’s actions, the reality that they went well beyond intelligence gathering, was not known; the only thing that for years saved the AFL-CIO from total embarrassment in the matter was the fact that Lovestone’s network of global labor espionage was so Byzantine and secretive as to be incomprehensible to an outsider. Even when Congress finally got around to formally investigating him in the 1970s, it proved difficult for any inquiry to establish what he had done or even exactly who he was.81
WHILE ELEMENTS WITHIN THE U.S. labor movement were focused on checking the advance of Communism elsewhere in the world, at home it found itself on the defensive—not from allegations of radicalism, but rather of corruption. There had long been labor union–related crime, especially in trades that were transient in nature or time-sensitive, such as trucking, dock-loading, and the construction trades. Payoffs were made for preferential treatment in shape-ups, kickbacks were provided to labor agents, and protection money extorted from immigrant garment workers. No product or service was completely immune. What did appear to be a relatively new and growing phenomenon in the post–World War II era was that of large unions organized along business lines tolerating extensive corruption and abuse from within their own leadership, as well as attracting full-time criminals from without.
Part of the problem was that with the rise in memberships the amount of money gathering in union treasuries, strike funds, and pension funds had grown so large it could not but have a transformative organizational effect. Controlling millions of dollars changed the “character of the union leader’s job,” labor writer A. H. Raskin suggested in 1959, and “often his character as well.”
The union builder, once able to get by on an elixir of idealism, energy, and personal magnetism, is forced to convert himself into an administrator, more engulfed in intricate questions of law, banking, corporate structure, trade prospects, insurance procedure, office management, public relations and policies than in the day-to-day concerns of his union rank and file.82
A related trend was the dimming of the guiding light of labor Progressivism characteristic of the 1910s and 1930s. “The real sickness lies in the decline of unionism as a moral vocation,” Fortune magazine reported in 1953. “Where there has not been outright spoliation, one finds among union leaders an appalling arrogance and high-handedness in their relation to the rank and file, which derives from the corruption of power.”83 Huge pots of money inspired temptation, and many unions were structured in such a way that autocratic leadership was rarely called upon to explain financial decisions. Due to the tremendous pressures on union leaders to excel for their rank and file, and the vicious power struggles that often went on among the upper echelon, leaders who did manage to win control tended to rule in the spirit of divine right. And because most unions were themselves often under assault from the outside world—from employers, the government, the courts, and the press—members as well as loyal lieutenants were inclined to cede vast power to a central paternal figure.
Observers who analyzed the phenomenon found that members, even when they suspected a union’s management of illegal or unethical shortcuts, were disinclined to voice concern. There might well be evidence of questionable practices, payoffs, and graft in the leadership ranks but so long as leaders delivered on basic needs and stood up for workers, an acceptable level of corruption would be tolerated. Most union crooks—the abusers of pension funds, the bribe-takers, the doers of special favors—tended to be greedy amateurs unable to keep their hands out of the cookie jar. Far more worrisome, as historian John Hutchinson suggests, was the other kind of labor criminal, the professional hoodlum with utter disdain for the law, the thug, enforcer, racketeer, collector of protection money, “whose justice could be swift, terminal, and unrequited.” No wonder the average worker’s focus was on coming home with a paycheck. What gain was there in speaking out? Denouncing hoodlums through a congressional hearing or an editorial was one thing, doing so down by the docks after quitting time quite another.84
It was corruption on the New York waterfront that dramatically reminded America of its problem with labor-related crime. Longshoremen had always been among the country’s most rugged workers, dozens of times a day “carrying everything from two-hundred-pound sacks of potatoes to five-hundred-pound slabs of bacon” up rickety gangplanks and depositing them in a ship’s hold.85 Such jobs attracted unskilled workers with more brawn than brains, while the pressure of unforgiving sailing schedules and the presence of myriad customs and other officials made wildcat strikes, payoffs, and the pilfering of goods common.
This was the world brought to light when New York Sun reporter Malcolm Johnson was sent in 1947 to the West Side piers to cover the murder of a Cunard Line hiring boss. Johnson investigated and wrote up his story but, intrigued, remained on the waterfront for the better part of a year, documenting an “outlaw frontier” of “unchecked thievery … smuggling, shakedowns, kickbacks, bribery, extortion, and murder.” His twenty-four-part exposé in the pages of the Sun revealed the existence of what Johnson called “an underworld syndicate,” one whose reach extended throughout America and even the world. “I know it sounds fantastic, but it’s true,” a lawman told Johnson. “The syndicate is like a big trade association in crime. It began back in Prohibition, and it is still strong today. It has big interests in New York, of course, and in Hollywood, Miami, Chicago, Detroit, and other key cities.” The heart of this enterprise was a labor union, the International Longshoremen’s Association, through which, Johnson wrote, “mobsters are able to control all key jobs on the piers and rackets operate without interference.”86
Johnson’s Sun series, which won a Pulitzer Prize in 1949, helped inspire an even more public exposé in 1950–1951, when Tennessee senator Estes Kefauver led nationally televised hearings into the “underworld syndicate” that featured the testimony of real-life criminals. Since Prohibition the American public had known of the sensationalized activities of gangsters, and the 1940 prosecutions of Murder Inc. had revealed the existence of a nationally coordinated Jewish and Italian mob execution squad.87 But the idea that the underworld was organized on a national or even international basis was slower to gain recognition. Partly this was due to the fixation on Communism by such leading crime fighters as FBI chief J. Edgar Hoover and the reluctance to concede that a vast criminal enterprise existed, although Harry Anslinger of the U.S. Bureau of Narcotics, who had been following the efforts by Charles “Lucky” Luciano, Meyer Lansky, and others to develop an offshore criminal haven in Cuba, had as early as 1946 understood that the “syndicate” was far-reaching in scope. Anslinger had long advocated the need for a congressional inquiry, the very kind Kefauver now proposed to lead.88
Known formally as the Senate Special Committee to Investigate Organized Crime in Interstate Commerce, the Kefauver panels convened in seven cities, including New York, Washington, and Los Angeles; the hearings were televised. The inquiry was notable for popularizing the term “Mafia,” and for eliciting finally from Hoover the admission that a large organized crime syndicate did indeed exist. This syndicate, the public learned, was a criminal “phantom government [that] enforces its own laws, carries out its own executions, and not only ignores but abhors the democratic processes of justice which are held to be the safeguards of the American citizen.” The report that emerged from the hearings was very mu
ch of its time, imagining labor corruption—not unlike Communism—to be a “secret government of crimesters” capable of subverting the country from within.89
The Kefauver hearings helped usher in an era in which televised inquiries into Communism, organized crime, or other threats to society were to become a popular novelty, their potential underscored by phenomenal viewer ratings and simultaneous, often sensationalized, press coverage. Viewed on one’s home screen, these events offered vivid realism as well as “leading men” like Senator Kefauver or later the handsome young congressional counsel Robert Kennedy, juxtaposing them with underworld figures straight from central casting named “Machine Gun,” “Tony Cheese,” or “Crazy” Joey Gallo, the latter a New York labor enforcer who told Kennedy the rug in his Washington office “would be nice for a crap game.”90 No doubt to a nation grown weary of the pursuit of Communists, the more straightforward struggle of Good versus Evil in the form of members of Congress questioning criminals and corrupt union bosses came as something of a relief; executives of the new medium of television were delighted to find that such civic-minded programming garnered high ratings, as 20 million Americans were believed to have watched some of the Kefauver extravaganza. Only one in five American households had televisions, but those who did not were found gathered on the sidewalks outside stores where owners had placed television sets in the windows. The hearings’ dramatic high point came when Frank Costello, a ranking New York mobster closely affiliated with Lucky Luciano and Meyer Lansky, refused to testify before television cameras; a compromise was worked out by which the camera would show only Costello’s hands as he spoke, but the effect was, if anything, more chilling. “The result was both sinister and mesmerizing,” writes historian T. J. English. “Millions of people in cities large and small became addicted to Costello’s testimony, which on television consisted of a voice and hands.”91