Thursday, April 8, 2010

Bretton Woods: led by a statist and by a communist spy



The wikipedia page on Harry Dexter White
:

According to Henry Morgenthau's son, White was the principal architect behind the Morgenthau Plan.[3] The Morgenthau postwar plan, as authored by White, was to take all industry out of Germany, eliminate its armed forces, and convert the country into an agricultural community, in the process eliminating most of Germany's economy and its ability to defend itself if attacked. A version of the plan, limited to turning Germany into "a country primarily agricultural and pastoral in its character", was signed by President Franklin D. Roosevelt and the British Prime Minister Winston Churchill at the Second Quebec Conference in September 1944. However, someone in White's department with access to details of the plan leaked it to the press, and White himself provided an advance copy to Soviet intelligence.[4] Public protests forced Roosevelt to publicly backtrack. The Nazis and Joseph Goebbels were ecstatic at the revelations, using the Morgenthau Plan as a propaganda coup to encourage their troops and citizens to fight on and to nullify emerging German criticism of the war and arguments for a separate peace with Western governments. White's actions also benefited the Soviet Union, virtually ensuring that the Nazi government or its successors would not negotiate a separate peace with the West. In the end Morgenthau still did manage to influence the resulting occupation policy,[5] particularly through the Occupation Directive JCS 1067, which was in effect until the summer 1947, and which forbade activities designed for economic reconstruction in Germany.

[...]White was the senior American official at the 1944 Bretton Woods conference, which he and Keynes dominated.[7] After the war, White was closely involved with setting up what were called the Bretton Woods institutions - the International Monetary Fund (IMF) and the World Bank.

[...]The FBI [...]included White, in a report entitled 'Soviet Espionage in the United States', which was sent to the White House, the Attorney General and the State Department on December 4, 1945.[16] Six weeks later, on January 23, 1946, Truman nominated White U.S. Director of the International Monetary Fund. The FBI responded with a 28-page memo specifically on White and his contacts, received by the White House on February 4, 1946.[17] White's nomination was approved by the Senate on February 6, 1946, but, as Truman later testiified in 1953, on receipt of the information White was "separated from the Government service promptly", first from the Treasury, and then from the IMF.

[...]NSA cryptographers identified Harry Dexter White as the Soviet agent denoted in the Venona decrypts at various times under the code names "Lawyer",[42] "Richard",[43] and "Jurist".[44] Two years after his death, in a memorandum dated 15 October 1950, White was positively identified by the FBI, through evidence gathered by the Venona project, as a Soviet source, code named "Jurist".[45] Years later, the Justice Department publicly disclosed the existence of the Venona project which deciphered Soviet cable traffic naming White as "Jurist", a Soviet intelligence source.

[...]Another example of White acting as an agent of inflence for the Soviet Union was his obstruction of a proposed $200 million loan to Nationalist China in 1943, which he had been officially instructed to execute,[47] at a time when inflation was spiraling out of control.[48]

Other Venona decrypts revealed further damaging evidence against White, including White's suggestions on how to meet and pass information on to his Soviet handler. Venona Document #71 contains decryptions of White's discussions on being paid for his work for the Soviet Union.

[...]White assisted Harold Glasser, a Treasury executive and NKVD spy, "in obtaining posts and promotions at Treasury while aware of his Communist ties". Because of White's backing, Glasser survived an FBI background check. In December 1941 the Secret Service forwarded a report to Harry White indicating that it had evidence Glasser was involved in Communist activities. White never acted on the report. Glasser continued to serve in the Treasury Department, and soon began recruiting other agents and preparing briefing reports on Treasury personnel and other potential espionage agents for the NKVD. After America became involved in World War II, Glasser received appointments to several higher-level positions in the government on White's approval.[51]
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