Other U.S. Agencies (non-intelligence)

Andrew, John A. III. Power to Destroy: The Political Uses of the IRS from Kennedy to Nixon. Chicago: Ivan R. Dee, 2002. 385 pages.

The author of this book, who died in 2000, was a history professor for 27 years at Franklin & Marshall College. In a foreward his daughter explains that friends and family pulled together to finish his research, and received substantial support from the College. Professor Andrew's detailed research is amazing. Before he died, he traveled to archives across the country to collect data on the IRS. Almost certainly this is the most comprehensive and best-documented treatment of IRS abuses available.

Andrew begins with the Kennedy administration, which launched the Ideological Organizations Project to pressure the IRS to investigate right-wing groups. By the time LBJ was in office, the IRS was spending more time fending off Wright Patman, a Democrat from Texas who served in Congress from 1929 until his death in 1976. As a populist, Patman went after the big tax-exempt foundations, which faced almost no scrutiny from the IRS. After LBJ, Nixon turned the IRS into a weapon. Much of the book details the Nixon administration's war against dissent, and the activities of the Special Service Staff of the IRS. The SSS made Nixon's enemies list look tame. Toss in the chapter about Nixon's connections to organized crime, and it becomes clear that the mainstream press missed some very big stories in the 1970s.

Burnham, David. A Law Unto Itself: Power, Politics, and the IRS. New York: Random House, 1989. 419 pages.

The jacket says it's "the first full-scale investigative book on the Internal Revenue Service," an agency that is "twice as big as the CIA and five times larger than the FBI." David Burnham has chapters on presidents who used the IRS, and on the willingness of the IRS to help the CIA and FBI suppress dissent in the 1960s and 1970s. There is nothing about the flip side: The IRS will drop investigations if the CIA complains that they are getting too close. All told, the book is fairly comprehensive.

Burnham reported for the New York Times for fifteen years, where he developed an interest in nuclear safety issues (Karen Silkwood crashed on her way to see him in 1974). Two years later he joined with George Lardner of the Washington Post and Jeremiah O'Leary of the Washington Star and led the successful attack to dump Richard Sprague, general counsel of the new House Select Committee on Assassinations (Lardner was the last person to see David Ferrie alive in 1967). In 1983 Burnham's "The Rise of the Computer State" appeared, an alarmist book which didn't foresee the microcomputer revolution and consequently locked out some unthinking liberals by treating all computers as a threat to the privacy of the little guy. Reporters can be hazardous to your health, so at PIR we congratulate Burnham on this latest book and hope he stays interested in the IRS.

Burnham, David. Above the Law: Secret Deals, Political Fixes and Other Misadventures of the U.S. Department of Justice. New York: Scribner, 1996. 444 pages.

David Burnham is the liberal establishment's showcase investigative reporter. This means that he wins book awards, he gets Rockefeller money, and he exposes his targets in a manner that doesn't reinforce the conspiracy theories of the great unwashed. Lately he's been attacking bureaucracies: his previous book was about the IRS, while this one looks at the Justice Department. Burnham objects to inefficiency in some areas, and overzealous surveillance that threatens privacy in other areas. More accountability is needed, but seemingly the way to do this is with more committees and more departments (and ultimately more government). The problem is not bad people who build empires at the expense of others, but rather a well-intentioned system that lacks the fine-tuning needed to make it fully rational.

One new wrinkle is that Burnham and colleague Susan Long created the Transactional Records Access Clearinghouse at Syracuse University in 1989. TRAC was used to analyze Justice Department statistics in a way that hadn't been done before. Based on this, Burnham shows that there is almost complete autonomy for local U.S. attorneys to pick and choose the cases they want to prosecute. The Justice Department, it turns out, is a loose collection of independent fiefdoms that no attorney general has been able to control.

Chester, Eric Thomas. Covert Network: Progressives, the International Rescue Committee, and the CIA. Armonk NY and London: M.E. Sharpe, 1995. 265 pages.

The Cold War period in American history was characterized by a seamless cooperation among international charities, quasi-governmental organizations, major foundations, funding conduits, and the CIA. Any semblance of private- sector independence was more calculated than real -- a veil that is stripped away by following the careers, connections, and correspondence of the key players who show up on the interlocking boards of directors. This book singles out the International Rescue Committee, and to a lesser extent the Ford Foundation. Its impressive original-source research makes a mockery of any historian who would pretend that these organizations can be considered separately from the CIA's influence and agenda, particularly during the Cold War period.

Eric Thomas Chester has a Ph.D. from the University of Michigan, and has been a civil rights worker, a member of Students for a Democratic Society, a cab driver, union organizer, substitute teacher, and assistant professor of economics at the University of Massachusetts. He remains an activist in the trade union solidarity movement and the Socialist party. With a record like this Chester had nothing to lose, so he charged ahead and wrote the truth.

Council on Hemispheric Affairs, 724 Ninth Street NW, Suite 401, Washington DC 20001, Tel: 202-393-3322. Resource Center, P.O. Box 2178, Silver City NM 88062-2178, Tel: 505-388-0208, Fax: 505-388-0619.

National Endowment for Democracy (NED): A Foreign Policy Branch Gone Awry. 1990. 91 pages. $8.95 from the Resource Center.

For students of U.S. intelligence activities, NED looks like a new suit of clothes for CIA interference in the affairs of sovereign nations. In the 1970s Congress took the Agency for International Development out of the business of providing CIA cover, and took Radio Liberty and Radio Free Europe out of the CIA budget. Now it appears that since 1983 much of the funding of pro-U.S. groups abroad is done through Congressional appropriations for NED, and is passed overtly to foreign groups through U.S. labor organizations and other cutouts. It helps keep the world safe for NED's interests. When you look more closely, you find that some on the NED board have a history of working with the CIA.

Davis, Shelley L. Unbridled Power: Inside the Secret Culture of the IRS. New York: HarperBusiness (HarperCollins), 1998. 284 pages.

Shelley Davis was only 12 years old in 1968, which explains why she ended up as a yuppie civil servant, working in the Pentagon with a security clearance. Perhaps she was rebelling against her father, an antiwar college professor in Nebraska who had tied black armbands on her. Davis actually claims the Pentagon is not so bad, but that's after comparing it with the Internal Revenue Service. Upon leaving her Pentagon job in 1988, Davis spent seven years at the IRS as its first (and last) historian.

This book is a humorous and well-written study of bureaucratic lunacy and self-serving duplicity, and should be read by anyone considering a career in government. More interestingly, Davis had access to IRS files from the COINTELPRO days, when Nixon put pressure on the IRS to go after his enemies. By 1972 an IRS strike force had files on 11,000 organizations and individuals. These targets, according to IRS thug Paul Wright, "through insidious methods have collaborated to form a revolutionary force." An FBI agent blew the whistle in 1970, but few noticed. Then John Dean mentioned it in his 1973 testimony, and said something about Nixon's "enemies list." The media went ape over these two words, and missed the real story. Davis points out that the IRS hit list was ten times larger than Nixon's list. Moreover, the IRS is supposed to be a nonpartisan agency.

Green, Fitzhugh. American Propaganda Abroad. New York: Hippocrene Books, 1988. 210 pages.

Fitzhugh Green spent most of his career in the United States Information Agency, including posts in Laos, the Congo, and the United Nations. USIA is the "propaganda" arm of the government. For Green this word has no negative connotations, and is roughly synonymous with "psywar" and "public diplomacy." Green begins by describing the careers of Benjamin Franklin and Thomas Jefferson in England and France, two of his early propagandist heroes. From William Randolph Hearst during the Spanish-American War, to Teddy Roosevelt's great white fleet, to FDR's fireside chats, Green sees it all as a fact of life. If the U.S. can organize it, bottle it, and spend a billion dollars a year to ship it abroad in the national interest, so much the better.

There's often a well-worn carpet between the CIA office and the USIS office in many embassies (USIA's foreign posts are called USIS for U.S. Information Service). USIA is prohibited from distributing its product domestically (just as the CIA is prohibited from domestic operations), but in foreign countries anything goes. If USIA officers are more visible than CIA officers, it's because they are able to influence people in the host country without breaking that country's laws. Such legal activities range from working with local journalists, to providing information on American life and culture to prospective immigrants.

Greider, William. Secrets of the Temple: How the Federal Reserve Runs the Country. New York: Simon & Schuster, 1989. 798 pages.

Greider's massive book aims to break down the "religious awe" many Americans feel when they contemplate the Federal Reserve Board or "Fed" (the secretive "temple" of Greider's title). The Fed's 12 key members, usually bankers or similar establishment types vetted by Wall Street, effectively control the U.S. economy by setting interest rates and guiding the national money supply. The press commonly kowtows to Fed members as dispassionate wizards, whose decisions are based on technical criteria lying outside (or above) politics. Long-time Fed chairman Paul Volcker was often portrayed as the father who saved his children (us) from self- indulgence and 70s inflation.

Greider's contrary view is as simple as his arguments for it are longwinded. He sees the Fed as a racket designed to insulate crucial economic decisions from popular control. The Fed's propaganda war against "inflation" justifies the high interest rates that have wrecked the economy, while providing mega-payoffs to the superrich. Such populism is anathema to the respectable press, which virtually ignored Greider's important book. His latest ("Who Will Tell the People?", 1992) may fare better. -- Steve Badrich

Johnston, David Cay. Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich -- and Cheat Everybody Else. New York: Portfolio (Penguin Group), 2003. 338 pages.

Author David Cay Johnston reports on this issue for the New York Times, and much of what he has learned over the previous nine years is presented in this book. This is a collection of horror stories for wage slaves who are not in a position to cheat. If your employer deducts from your paycheck, you're either in the lower class already, or rapidly headed there. The system is rigged for the benefit of the very rich, and enforcement by the IRS has essentially collapsed as Congress squeezes their budget. By 1999 the poor were more likely than the rich to have their tax returns audited.

The situation is outrageous. Every year before tax returns are due, stories appear in the press quoting IRS officials about new tricks they've developed to address the problem. And every year it turns out that more rich people get richer by cheating. Maybe rich people don't read, or maybe their lawyers, accountants, or advisors in Bermuda know better than to believe the IRS. How long can the middle class survive under these conditions? Even some rich folks, such as Warren Buffett, George Soros, and Bill Gates Sr., favor the estate tax because they're worried about the long-term stability of our skewed system. One question is unanswered: Is reform possible, or does capitalism eventually destroy democracy as part of its natural progression?

Jones, David M. The Politics of Money: The Fed Under Alan Greenspan. New York Institute of Finance, 1991. 273 pages.

David Jones is an expert on "Fed watching," the esoteric science of collecting clues that might allow one to anticipate shifts in Fed policy. These days it seems that everyone watches the Fed, as many of the major gyrations in the stock averages occur when investors anticipate how the Fed might react to some recent tidbit of economic news. The Federal Reserve chairman is sometimes referred to as the "second most powerful person in America." In times of economic crisis, he and his Board of Governors are expected to exercise their political independence, and calm the waters by demonstrating wisdom and foresight. One mistake and it could all come down.

Alan Greenspan has been the Fed chairman since 1987. His style is to balance the economy on the edge of recession, without stimulating the sort of growth that would lead to inflation. Tiny interest rate adjustments are used to achieve this goal, based on the theory that small moves are easier to reverse if they turn out to be wrong. While Greenspan is a prodigious student of every conceivable economic indicator, Jones feels that this could be a problem: too many contradictory and trivial indicators might someday lead to paralysis. In addition to describing the structure and operations of the Federal Reserve System, Jones includes an appendix (pages 248-253) that lists all of the members of the Board of Governors from 1913-1990.

Kelly, John F. and Wearne, Phillip K. Tainting Evidence: Inside the Scandals at the FBI Crime Lab. New York: The Free Press, 1998. 355 pages.

J. Edgar Hoover was a master at promoting his FBI. Since the 1930s, one important ingredient in the FBI's public relations has been the reputation of its crime lab. For decades it did almost all of the lab work for state and federal prosecutors around the country. Forensic science deals with probabilities and shades of gray more often than prosecutors and television crime dramas would have you believe, even though the discipline lacks an enforced set of ethical and accreditation standards. Over the years, the FBI's monopoly became a formula for disaster -- it turns out that key FBI scientists were incompetent, and some have even skewed test results and testified falsely to favor the prosecution. This situation was exposed after ten years of effort by an inside whistleblower, Frederic Whitehurst.

The authors take a detailed look at the lab's role in several high- profile cases: the Unabomber case, the death of Judge Robert Vance from a mailbomb, Ruby Ridge, the World Trade Center bombing, the Oklahoma City bombing, and the hairs and fiber analysis in the Alcee Hastings case and the Jeffrey MacDonald case. Meanwhile, Whitehurst was suspended from duty in 1990. Even though official inquiries have substantiated his charges, it still looks like he'll never get his job back.

Levenstein, Aaron. Escape to Freedom: The Story of the International Rescue Committee. Westport CT: Greenwood Press, 1983. 339 pages.

This book is an in-house puff piece written for the International Rescue Committee's fiftieth anniversary. IRC, Free Europe Committee (the CIA's Radio Free Europe), Freedom House, National Endowment for Democracy -- these and others are regarded by us as U.S. intelligence assets because of the people behind them. John Richardson, Jr., for example, was president or chairman of all of the above at one time or another. Leo Cherne has been chairman of IRC and Freedom House, and was on the President's Foreign Intelligence Advisory Board from 1973-1977 and again in 1986, serving as chairman and vice-chairman. William Casey had been on IRC's board and was eventually IRC president.

The revolving door between intelligence-community heavies and certain organizations such as these makes it difficult to take their protestations of innocence seriously. Levenstein's single page about IRC connections with the CIA concerns reports that the money from the Norman Foundation (he means the Norman Fund) was from CIA. IRC insisted that the reports were unfounded, and got retractions. (Levenstein also got the date wrong; the foundations were exposed in 1967, not during the early 1970s.) The only thing in his account that's easy to believe is the part about retractions. No newspaper is going to risk challenging IRC's hardball players over the facts surrounding a mere $15,000 foundation grant.

Snyder, Alvin A. Warriors of Disinformation: American Propaganda, Soviet Lies, and the Winning of the Cold War. New York: Arcade Publishing, 1995. 321 pages.

Alvin Snyder, a former executive with CBS and NBC, worked for the U.S. Information Agency under Charles Wick. Snyder was in charge of Worldnet, the USIA's new effort in satellite-based TV broadcasting. Up until the Reagan years, government broadcasting used only shortwave radio, which was often jammed by the Soviets. But satellite transmission was a new technology, and a new opportunity for official propaganda. (If you can't nuke 'em, then you can always destroy their brains with countless "Bay Watch" episodes.)

Charles Wick, a former bandleader and Hollywood agent, waged Reagan's cold war in his lead-lined overcoat and phalanx of bodyguards. Snyder is less brash. He knows that both U.S. and "Evil Empire" propaganda relied on outright disinformation, and the U.S. won because it spent more money. Star Wars, Snyder says, was an outright bluff. The Reagan rhetoric on the KAL 007 shoot-down was a lie; the portion of the cockpit transcript that proved the Soviet pilot was following reasonable procedures was deliberately deleted by Reagan's people. By now it's easy to see why the Soviets felt that Reagan was trying to start World War III. The only comic relief in this book concerns the gross incompetence at the Voice of America, and in Miami's anti-Castro community, as they forced the TV Marti silliness on Congress.

Vise, David A. and Coll, Steve. Eagle on the Street. New York: Charles Scribner's Sons, 1991. 395 pages.

The phrase "eagle on the street" is a euphemism for the Securities and Exchange Commission, the federal agency that keeps an eye on Wall Street. SEC's role is similar to the role of a cop or regulator posted at a casino, who is there to make sure the dealers aren't stacking the decks. It was created in the wake of the excesses of the 1920s, the crash of 1929, and the depression of the 1930s. With its policy and enforcement decisions, the SEC is constantly asking and answering this question: "How much greed is too much, and at what point does it threaten the system?"

Reagan appointee John Shad replaced Stanley Sporkin as SEC chairman in 1981. Shad believed that a healthy economy required deregulation. By the time he left in 1987, the junk bond raiders and inside traders had created numerous scandals, and the crash of 1987 was just around the corner. "My only regret," Shad said at his farewell party, "is that I will be a distant observer of the exciting events that are unfolding before this great institution." Shad went on to become the chairman of Drexel 1989, but the job lasted only ten months (which meant that he earned a mere $3.175 million). He lost this job because this was the firm where Michael Milken had done so much damage. By 1990 Drexel had used up all of its privileged treatment and special favors, and declared bankruptcy.

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