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Allies in the Shadows: The FBI’s Private Network

January 20, 2011

Excerpt from Break-ins, death threats and the FBI

Allies in the Shadows: The FBI’s Private Network

While Frank Varelli was the first FBI employee to infiltrate and report on developments within CISPES (Committee in Solidarity with the People of El Salvador), a network of private, right-wing organizations was also at work spying on emerging liberal and left-wing Cenral America groups, disrupting their activities and providing material for the FBI’s files. Many of the same groups that gathered intelligence on religious and political groups, including CISPES – and disseminated a blitz of distorted, scurrilous material tying them to purported international communist-inspired terror networks – would later be shown to have formed the propaganda and funding core of the Reagan Administration’s private contra-support network.

In the context of domestic intelligence gathering, their affiliation with the FBI had been authorized by a little-noticed provision of a presidential order signed by Ronald Reagan in 1981 which permitted the FBI to “contract with…private companies or institutions…and need not reveal the sponsorship of such contracts or arrangements for authorized intelligence purposes.”

A number of domestic conservative groups who aided the Administration’s secret campaign to support the contras and to neutralize opponents of its Central America policies worked with other foreign governments and organizations under the umbrella of an international organization known as the World Anti-Communist League. The League’s membership includes some of the most ultra-conservative and reactionary elements in the non-communist world. Founded in 1967, WACL has included in its membership a number of former Nazis and Nazi collaborators and counts among its various regional affiliates Guatemalan and Salvadoran death squad leaders, including Mario Sandoval Alarcon, a former vice president of Guatemala known as the “Godfather of the Death Squads.” League members were invited to Taiwan’s Political Warfare Academy for training in counter-insurgency and police techniques, as well as to Argentina, where they were trained in brutal interrogation techniques by members of the Argentine military.

During the 1980s, WACL’s chief spokesman in the United States was Retired Major General John K. Singlaub, a former Army chief who resigned his commission after openly criticizing President Jimmy Carter’s proposal to reduce US troop strength in South Korea. In 1980, Singlaub founded a US branch of WACL and, four years later, became chairman of the League. In that capacity, he helped facilitate covert military support from League members to anti-communist resistance movements in a number of countries, including Mozambique, Angola, Ethiopia, Vietnam, Laos, Cambodia, Afghanistan and Nicaragua, whose former dictator, Anastasio Debayle Somoza, was an influential member of the League before his ouster by the Sandinistas in 1979.

As League chairman, Singlaub told a WACL conference in 1984: “Our struggle with Communism is not a spectator sport…We have opted for a course of action which calls for the provision of support and assistance to those who are actively resisting the Soviet–supported intrusion into Africa, Asia and North America.”

At the time, Singlaub was assuming the role of the leading publicly visible figure involved in securing weapons and money for the Nicaraguan contras under a private-sector initiative apparently conceived by the late CIA director William Casey and coordinated by Lt. Col. Oliver North from the National Security Council.

Back in the winter of 1980, following Ronald Reagan’s election, Singlaub traveled to Central America, along with another WACL official, former Defense Intelligence Agency chief Daniel O. Graham, to tell officials in El Salvador and Guatemala that the emphasis of the Carter administration of human rights was being downgraded and that counter-terrorism and hemispheric security would be the dominant policies of the new administration. One Guatemalan official quoted Singlaub and Graham as telling military leaders in that country that “Mr. Reagan recognizes that a good deal of dirty work has to be done.” Within weeks of the Singlaub-Graham visit, the level of death squad activities in Guatemala had increased dramatically.

Western Goals: The Strange Case of John Rees

Of all the emerging private conservative organizations working to support the policies of the new Administration, none was more effective than Western Goals. Housed in a townhouse in Alexandria, Virginia, this foundation turned out a series of publications designed to expose the “communist-terrorist” menace inside the country.

One of the purposes of the foundation was described in a statement of purpose by founder Larry McDonald: “In the field of Marxists, terrorism and subversion, Western Goals has the most experienced advisors and staff in the United States…The Foundation has begun the computerization of thousands of documents relating to the internal security of our country and the protection of government and institutions from Communist-controlled penetration and subversion.”

A long-time colleague of McDonald and a key figure in the work of the new foundation was John Rees – the same right-wing journalist whose article was used by the FBI to launch the first CISPES investigation and whose writings were cited by the Denton Committee to brand nuclear peace groups as Soviet “active measures” front groups.

In assembling a board of directors, McDonald wasted no time in soliciting a man who was already prominent in international right-wing circles – John Singlaub.

Beginning in 1982, the foundation – under the guiding hand of Rees, himself a long-time confidant of Singlaub – began publishing a series of books targeting liberal and progressive activists involved in a range of causes and organizations. The War Called Peace dealt with the array of US peace groups supporting nuclear arms reduction and the nuclear free movement. Broken Seals attacked the National Lawyers Guild, the Center for National Security Studies, the American Civil Liberties Union and other groups which had, in the previous decade, been in the forefront of the efforts to demand stronger Congressional oversight over the CIA and FBI. Ally Betrayed…Nicaragua catalogued the role of the Carter Administration in “selling out” the Somoza regime in that country and permitting the establishment of the Sandinista regime in it’s place. Soviet Active Measures Against The United States laid out an elaborate theory of contacts and linkages which purported to explain how domestic political and religious groups, such as the Washington Office on Latin America and the National Council for Churches, were being used by the KGB as fronts for Moscow’s political operations.

In defense of his activities, Rees has pointed out that he has never been successfully sued for libel, a fact he attributed to his knowledge of libel law, his meticulous research and his dependence on open source information for most of the material he has compiled on left and liberal activists. But another reason Rees may have avoided such litigation lies in the limited nature of the circulation of Western Goals materials. At least in the early days of the foundation’s operations, very few of the group’s publications made their way into left-liberal circles. According to former employees of the foundation, the publications were circulated, almost exclusively, to John Birch Society chapters, other groups on the far right, local police departments, the Bureau of Alcohol Tobacco and Firearms (BATF), the Central Intelligence Agency and the FBI.

In a suit against the Bureau and the Washington, D.C. police department, the Institute for Policy Studies introduced a deposition by Rees in which he testified that he had supplied information about the group to the FBI both by phoning FBI agents and providing the Bureau with copies of his publications. In the deposition, Rees listed a number of law enforcement agencies as recipients of his newsletter, Customs, the Drug Enforcement Agency, the FBI, and the Maryland, New York and Michigan State Police.

People familiar with Rees’ operations over the last twenty years – he began his own newsletter, Information Digest, in 1967, around the same time he began working as an informant for the Newark Police Department – are amazed at his resilient ability to stay in business despite series of discrediting events.

Rees, who was born in Great Britain and came to the United States in 1963, worked for a spell for the London Daily Mirror. His career as a mainstream journalist was aborted, however, when his superiors at the paper discovered he had been trading on his professional standing by receiving free meals and hotel reservations. When officials at the paper discovered Rees’ unethical activities, they fired him from the paper and paid off his bills.

He first came to the attention of the FBI when he began dating a woman who was secretary to the FBI’s Legal Attache at the U.S. Embassy in London. The Woman was reportedly prepared to marry Rees when she learned he was already married, according to an FBI document.

Rees gained a measure of notoriety in 1964, shortly after his arrival in the United States, when he moved to Boston and gained the confidence of Grace Metalious, the author of Peyton Place, who was terminally ill. Hours before Metalious died, Rees brought a new will to her room at Beth Israel Hospital. He persuaded her to sign the document, which left her entire estate, then valued at nearly $150,000, to Rees, cutting off her husband and three children. Metalious’ lawyer at the time said that the author fully understood her actions in leaving her estate to Rees. The attorney quoted her as saying, “I have complete trust in Mr. Rees with regard to my children.” It was only later, when Rees learned that the liabilities and outstanding claims against Metalious’ estate were greater than her assets, that he renounced his claim to her legacy.

Rees subsequently married a black woman and moved to Newark where, in 1967, he launched “New Careers,” a program designed to provide jobs for poor black residents of that city. At the same time, capitalizing on his wife’s contacts in Newark’s black community, he began secretly reporting to the Newark police on activities of black activist groups in the city. But his Newark career was cut short when the U.S. Labor Department, which partially funded his “New Careers” program, determined that Rees overcharged the city from $7,500. The department also blocked payment of another $12,000 to a job training firm for which Rees was a consultant.

The following year, Rees moved to Chicago where he began to work as an undercover informant for the Chicago Police Department, infiltrating groups opposing the U.S. involvement in the Vietnam War. Rees offered to testify on his findings before the House Un-American Activities Committee and to share his material with the FBI as well. But, at that time at least, officials at FBI headquarters determined that Rees was next to useless as a source of reliable information.

In a 1968 internal memo, Special Agent Alex Rosen wrote to several top deputies of J. Edgar Hoover about Rees’ offer, noting that, during his stay in Newark, “he attempted to sell himself and his services to the FBI. The interviewing agents believed his interests were self-serving and that he came to the FBI thinking this would enhance his credentials in contacting other clients.” The memo added that Rees “talked in generalities regarding persons and events connected with racial and criminal problems in Newark and furnished no information of value.”

The FBI memo concluded that: “Rees is an unscrupulous, unethical individual and an opportunist who operates with a self-serving interest. Information he has provided has been exaggerated and in generalities. Information from him cannot be considered reliable. We should not initiate any interview with this unscrupulous, unethical individual concerning his knowledge of the disturbance in Chicago as to do so would be a waste of time.”

Despite his rebuff by the FBI, however, Rees stepped up his political spying activities, drawing on local police contacts he had cultivated in Newark, Chicago, New York and elsewhere. During the early 1970s, Rees gathered extensive material on political activists from various police officials, informants and private political spies with whom he exchanged information. That material was recycled in his Information Digest, which, in turn, went to a number of law enforcement agencies who, in turn, used it to compile files on political activists.

The bizarre and damaging secret flow of unsubstantiated and scurrilous reports surfaced in 1976 when an investigation into the compilation of hundreds of thousands of files by the New York State Police on political groups and activists. They discovered that information reported in Information Digest “was casually used to create dossiers on a wide spectrum of Americans whose only crime was to dissent on what the Digest authors considered the left of the political spectrum. This information was, in turn, kept in state police files throughout the nation and widely disseminated. For police officials to have participated is a shocking commentary on the decline of democratic safeguards.”

“It is important to note,” the investigators added, “that this was a national police procedure. ‘Information Digest’ (italic previous) was the string that held together a network of hidden informants whose information was recorded by police departments throughout the nation without independent checking by the police as to validity and source of this derogatory information.”

Noting that material was compiled by both John and Sheila Lousie Rees, his third wife, who, at the time worked as a Congressional staffer for Rep. Larry McDonald, the investigators asked McDonald to elaborate on his relationship with Rees and his wife. McDonald, however, declined to comply. Even without McDonald’s testimony the investigators unraveled a longstanding covert, deeply concealed network of information-sharing on liberal activists which assumed greater proportions the further the investigators dug into it.

To avoid having to identify Rees and his newsletter as the source of many of their political files, officials in the New York State Police classified Information Digest as a “confidential informant” thereby investing it with the same aura of authority as an undercover asset who had actually infiltrated groups which were the subject of reports.

The material’s authoritativeness was further enhanced when it was forwarded from the files of the New York State Police to other law enforcement agencies around the country in response to inquiries about political activists. When other agencies received the Rees–generated information, they assumed it was reliable since it bore the imprimatur of the New York State Police. “Few liberal organizations escaped being targets of derogatory reports or of infiltration by the agents of Information Digest who hid behind a maze of false names and Post Office boxes taken out under mysterious circumstances,” the report added. “Opponents of the Vietnam war, including journalists, union leaders, campus dissenters, state and national politicians and liberal organizations were frequent targets. At times, personal remarks about the lifestyles of targets were included.”

Elaborating on Rees’ mode of operations, the report quotes “a highly-placed source” as explaining Rees would go to one police department with information. While collecting payment as an informant, Rees would gather new material and pass it along to other police departments, either in exchange for pay or for yet new material.

The report detailed Rees’ work with the Washington D.C. police between 1971 and 1973. The relationship began prior to a major anti-war demonstration in May 1971, which resulted in the jailing of more than 12,000 protestors. Before the rally, Rees suggested to D.C. police officials that they rent an office for him and install listening devices to monitor leftists he would invite to the office. Using the alias John Seeley, Rees opened the Red House Book Store, which was conveniently located one floor below the headquarters of the Vietnam Veterans Against The War. The store, which provided an easy listening post for Rees, was rented and paid for by the intelligence division of the Washington D.C. police department.

Investigators for the New York State Assembly concluded that, “Information Digest’s (italic previous) raw, unevaluated, editorialized and frequently derogatory information was used to develop dossiers on thousands of patriotic and decent Americans who had committed no crime and were not suspected of any crime…It should be noted that the extraordinary cost of maintaining the million-card file on innocent civilians could be put to used to curtail real criminal activity.”

The New York investigation succeeded in eliminating one subscriber – the New York State Police – from Rees’ list of clients. But the resourceful Rees, aided perhaps by his association with McDonald, lost little time in cultivating a new client, the FBI – which had, just ten years earlier, determined him to be “unscrupulous, unethical and unreliable.”
It was also during the late 1970s as well that Rees worked with a partner in the private spy business who had personal connections to two men who would become among the most powerful people in the country: Ronald Reagan and this Attorney General, Edwin Meese.

For several years Rees worked with Patricia Attowe, a security consultant who compiled files on political activists, especially those opposed to nuclear power, which she used in her security work with large West Coast utilities such as Pacific Gas & Electric. According to the notes of two Los Angeles detectives who interviewed Richard Miller, then a vice-president of PG&E: “Atthowe and [her organization] provided good information. Ronald Reagan could verify Atthowe’s reliability. Atthowe’s husband was a deputy with the Alameda County Sheriff’s Department and Edwin Messe was a District Attorney in Alameda County at about the same time.”

It is unclear how, and at what date, Rees managed to establish a new relationship with the FBI, but the climate in 1980 was clearly conducive to the Bureau’s  cultivation of private-sector resources like Rees. The first document on file which speaks to a formal relationship between Rees and the FBI surfaced in December 1981, when an assistant United States Attorney in New York testified, in a case involving the National Lawyer Guild, that: “Some federal agencies received information about the National Lawyer Guild from John Rees or S. Louise Rees or both, sometimes in the form of Information Digest, and from time to time they were compensated by the FBI for furnishing information.”

During the 1980s, Rees attained greater public visibility when he began to write a column for the Moon-owned Washington Times. But toward the end of the Reagan Administration, he again managed to become an embarrassment to the FBI.

In 1987, Jonathan Dann produced for KRON-TV in San Francisco a three-part series on private political spies. Dann reported in the final segment of the series that in 1982 the State Department published a list of groups which it declared were “Communist fronts” controlled by the KGB and the Kremlin. One group on the list was the Women’s International League for Peace and Freedom, a long-standing peace organization. When members of the group learned they had been branded as agents of Moscow by the State Department, they filed a Freedom of Information request to ascertain the origin of the charge. They learned that the State Department’s report quoted, word for word, from a Western Goals publication, The War Called Peace, written by John Rees. Initially, Rees denied writing the passages quoted by the State Department but, when confronted by Dann with a draft of his own booklet, stating that WILPF “supports revolutionary national liberation movements utilizing terrorism and armed struggle” and that WILPF “is thoroughly  penetrated by the Moscow-line Communist Party,” he conceded it was his work.

Angered by the FBI’s red-baiting of the group, and especially troubled by the government’s use of scurrilous, unverified information from a private right-wing activist, Congressman Don Edwards demanded an explanation of the FBI’s William Webster, then director of the Bureau. The responses from the FBI’s Office of Congressional Affairs were characteristically unenlightening. They are worth noting less for the information they contain that for the glimpse they provide of the impotence of Congress in effectively overseeing the Bureau.

Edwards had asked the FBI how Rees’ book came to be retained in the FBI’s files and how the portion dealing with WILPF was retrieved and disseminated to the State Department. The Bureau’s response was: “A search of our indices does indicate a copy of the Rees booklet was retained in FBI files. It does show that two copies were provided to the U.S. Department of State. The FBI may acquire pertinent public information material and appropriately disseminate that material to other agencies if that information is of possible interest or use to them.”

Edwards further asked the FBI whether it advised the State Department that the document in question was “an unverified report from an outside source whim the Bureau had previously discredited.”

In characteristic FBI jargon, the Bureau responded: “The transmittal communication only advised the State Department that the booklet was edited by John Rees and published by the Western Goals Foundation and contained no opinion as to the credibility of the editor, publisher or authors…The decision on the credibility of such a public document in most circumstances is left to the reader. It is noted that the publisher of the booklet, Western Goal Foundation, had as its chairman the late Congressman Lawrence P. McDonald, killed when the Soviets shot down the KAL airliner…”

At the time, McDonald had been en route to a meeting of the World Anti-Communist League.

While the FBI may not have explicitly endorsed the reliability of the material, that subtlety was obviously lost on the State Department. Shortly before Dana’s report aired in late 1987, the State Department removed the name of WILPF from its group of Moscow “front” organizations. A spokesman for the State Department indicated that the Department, itself, had no way of knowing whether the allegations about WILPF were true. The reason the group was included on the list was that the State Department received the information from the FBI. It was the FBI’s imprimatur on the material that led the Department to believe in its authenticity and accuracy.

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