CIA: OTHER SIDE OF THE STORY - - WHAT REDS ARE DOING
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Document Number (FOIA) /ESDN (CREST):
CIA-RDP75-00149R000400510016-8
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K
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Document Creation Date:
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Document Release Date:
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Sequence Number:
16
Case Number:
Publication Date:
May 4, 1967
Content Type:
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FOIAb3b
Sanitized - Approved For Relea
y X106 CONGRESSIONAL RECORD HOUSE
[construction of the Soviet Fiat factory] .. announced plans are not so grandiose . . . if history is any any teacher, I see no
in itself represents a sizable allocation of as to require a significant alteration in tradi- particular reason to view the present situa-
resources for peaceful uses, but more will tional Soviet economic priorities, and would tion as a detente. . . . It is a question of
follow to provide the roads, service stations, leave military and space program unimpaired, prudence in protecting the security interests
la
consumer needs is a heartening development
in the Communist countries, one that we
welcome and should support through trade'
Those thoughts echo similar com-
nlents offered by Acting Secretary of
Commerce Trowbridge, who on Novem-
ber 2,' 1966, as Assistant Secretary of
Commerce for Domestic and Interna-
tional Business, said:
-he President's decision to provide for
Export-Import bank financing of American
machine tools and other products for the,
Fiat automobile plant, 17n the U.S.S.R. Is a
good example of how we will oiler our co-
operation on projects. designed to improve
the well-being of ' their people. We support
their allocaton of resources to expand con-
sumer-oriented industries?
The International Trade Subcommit-
tee report contains additional enlighten-
ing information about the campaign un-
derway to gain acceptance for the Fiat
deal. It recites, for example, that
last October, administration spokesmen
sought to convince individual Members
of the House, unidentified in the report,
that "the Fiat deal would support the
increased emphasis which the U.S.S.R. Is
putting on using its resources to produce
consumer good."'
Such wishful thinking actually runs
counter to findings contained in a Cen-
tral Intelligence Agency report which the
subcommittee itself included in its March
1 report.
Claims that if the Soviet-Fiat factory
is built it will cause the Soviets to invest
extensively in tertiary automotive in-
vestments-which means such items us
roads, service stations, repair facilities
and the like-are refuted by the CIA re-
port which states:
The USSR will almost certainly have no de-
sire and little need to duplicate in the fore-
seeable future the heavy tertiary investments
that have been fostered by the automobile in
Western Europe and the United States?
The CIA report points out that the
Soviet program is to produce cars for the
Communist leaders, not the people. It
states:
Essentially, the new Soviet program is do-
signed to produce automobiles for the bu-
reaucratic and managerial elite, not for the
average citizell10
Further. .re, it is the CIA evaluation
that the r:.:ciounced Soviet plans to in-
crease automotive production will not
divert resources L.D n their defense or
space programs:
[Emphasis added.] 11 of this counry.
There is little doubt that if the Soviets BASIC SOVIET PLANS REMAIN UNCHANGED
were required to design and build ma- The leaders of the organization which
chine tools and equipment which closely controls the Soviet industrial empire
approximate those they seek from abroad traditionally have planned for the pro-
in the Fiat deal then they would prob- duction of a relatively small number of
ably have to use engineers, technicians passenger automobiles. That is still true
and capital goods which otherwise could today of the current Soviet leaders.
be employed in programs related to So- The current Soviet Communist Party
viet military and space endeavors. I asked leaders approved of the plans. of the
the Director of the Defense Intelligence State Planning Commission (GOSPLAN)
Agency, Gen. John F. Carroll, about this which calls for the production of an
and by letter of April 25, 1967, he re- estimated 230,000 passenger automobiles
sponded: in 1967. The Central Intelligence Agency
It is true that, if engineering and produc- estimates that over 12 percent of those
tion resources were allocated to the design will be a Jeep-type vehicle, the GAZ 69.11
and fabrication of such machine tools and The CIA also estimates that 23 percent
equipment, the resources would have to be of all Soviet passenger automobiles pro-
taken from other programs, either miiitary or duced in 1967-a total of 54,000, will be
civilian. In the past the Soviet Union has exported. Furthermore, according to the
given priority to military programs over civil
programs, and it is believed that-barring a CIF estimates, that figure will increase
major change in Soviet policy-this practice to 250,000 automobiles exported by the
will continue12 U.S.S.R.-by 19741? Significantly, 1974
Note that General Carroll confirms the year when the proposed Fiat plant is
that the Soviets would have to divert re- scheduled to be in full production.
sources from their other programs if ~ The ordinary Soviet citizens are today
they were required to undertake the deprived of an automobile not because
automotive project with their own of any action which they, or you, or I
have taken. They are denied an auto-
resources. mobile because Soviet leaders have de-
In other words, to whatever extent creed that they not be permitted one.
the United States or any other nation Everyone who gives serious thought to
provides capital goods to the Soviets, the the workings of the Soviet Union under-
Soviet leadership would be permitted to stands full well that the Soviet industrial
continue its traditional practice of al- empire could right now, today, increase
locating their own resources to military its output of commercial-type vehicles.
programs.
Neither General Carroll nor any other
responsible official of U.S. intelligence
agency . has ever, to my knowledge,
claimed that there is evidence of a
major change in Soviet policy. In other
words, Soviet priorities in the Soviet in-
dustrial empire continue to go to mili-
tary programs.
In spite of this we have witnessed a
band of administration spokesmen, ap-
parently ignoring evaluations of the in-
telligence agencies, touring the country
and giving the impression to the Amer-
ican public, to trade, and business groups,
and to communications media that the
Soviet-Fiat deal will mean less Soviet
tanks and more emphasis on consumer
needs.
SHIPMENT OF MACHINE TOOLS SHOULD BE
DENIED
I would like at this time to cite some
reasons why in my opinion the Export-
Import Bank credits and the machine
tools should be denied the Soviets.
DETENTE NONEXISTENT
One rationale advanced by adminis-
tration spokesmen for shipping and
financing American machine tools to
the Soviets is their claim in seeing in the
present situation a detente. But that is a
claim with little basis in fact. The high-
est ranking member of this Nation's
Armed Forces, General Wheeler, told all
Americans last February 26:
L Address .!'arch 2, 1967 by Anthony M.
Solomon, Assistant Secretary of State for
Economic Affairs, made before the Chicago
Automobile Trade Show luncheon, Chicago,
Illinois.
' Address November 2, 1966 by Alexander
B. Trowbridge, then Assistant Secretary for
Domestic and International Business, U.S.
Department of Commerce, prepared for de-
livery at the International Trade Session,.
.lonal Foreign Trade Convention, New
York City.
The Fiat-Soviet Auto Plant, page 42.
Ibid, page 26.
10Ibid, page 11.
11 Ibid.
11 Letter, April 25, 1967, Lt. General Joseph
V. Carroll to Rep. Glenard P. Lipscomb.
But even if American financial assist- -
ance were granted and machine tools
were exported to build the Soviet-Fiat
plant, the CIA evaluation states:
It seems certain that, within the next
decade at least, the Soviet leadership not
only has no plans to mass produce auto-
mobiles in imitation of the West, but would
strenously resist internal pressure to do
so. Although the USSR may some day join
the circle of nations that provide auto-
mobiles for the average citizen, that day is
not now in sight 10
In other words, the Communist leaders'
plans for automobiles are basically to
use them for rewarding the Soviet Com-
munist Party elite and for exports and
related purposes, not for the average
citizen. The Communists' plans are
designed to make the Communist Party
more efficient in its communications and
travel needs and better equipment to
achieve its political goals.
IMPORTANCE OF MACHINE TOOLS TO DEFENSE
INDUSTRIES
The following are some of the ma-
chine tools desired by the Soviets for use
in the Fiat-constructed plant in the
U.S.S.R.: Numerically controlled ma-
chines for diesinking; multispindle
lathes; gear cutting machines; stamping
presses; machines for mechanical opera-
tions, such as transfer lines; boring,
grinding, broaching machines; high pro-
13 "Moot the Press,". NBC television and
radio program of February 26, 1967 with
General Earl G. Wheeler as guest.
1' The Flat-Soviet Auto Plant, page 13.
15 Ibid, page 19.
10 Ibid, page 11.
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March 7, 1967
CONGRESSIONAL RECORD - APPENDIX A 1103
The editorial concludes that "such
facts are worth knowing when making
decisions on foreign aid." Believing my
colleagues will be interested, under unan-
imous consent I place the editorial here-
DEMOCRACY: WHAT IT MEANS TO ME
Democracy is people-not an undefinable
mass bound together, but unified individuals
staying together.
Democracy is a voice-appealing to the
spirit of men-for no man can live on bread
alone.
Democracy is America-our past, our pres-
ent, our future, earned by our own merits
through sweat, toil, joy and tears.
Democracy is people speaking to America.
Often it is said ghat Democracy in the
United States is almost invisible among the
members of the "beat generation." Oh, on
the contrary. It is the teenagers who will
soon illuminate the flickering ember of what
many people refer to as "dying Democracy."
Just walk into a "Problems of Democracy"
class and see the contempt with which the
18 year old I-A senior boys hold a draft
dodger. Listen to a glee club singing "Ameri-
ca our Heritage." Observe a girl scout troop's
closing flag ceremony. Or listen to my words.
You see we understand the challenge with
which we are faced and we accept it. We
realize the responsibility confronting us and
we will not turn away from it because
Democracy is our heritage.
In the forthcoming decades it will be up
to us to live up to this heritage and pass it
on, perhaps even in better condition than we
found it. In order to do this we have a
tremendous task to perform. We must edu-
cate ourselves, make our own decisions, stand
on our own two feet. These are the most
important things of all. It's too easy to turn
into a second-rater, that is-seeing every-
thing through somebody else's eyes. If we
can prevent this then we have preserved the
individual, and in a sense, Democracy, for
the individual is the very cornerstone of
Democracy.
And then finally, Democracy is the un-
definable terns-freedom. It is that certain
exultation only those who bother to think
and worry about will ever experience.,
In the lyrics of a modern day song: "Born
Foreign aid is vital to the United States,
apart from the humanitarian motives that
also sustain it.
Foreign aid is an established arm of na-
tional policy. For 20 years, despite some
objectors, every president and Congress have
kept the program going.
Self-interest alone would agree with Presi-
dent Johnson's words: "In the long run, the
wealthy nations cannot survive as islands of
abundance in a world of hunger, sickness and
despair."
Those words come from the President's
Feb. 9 message on foreign aid, in which he
proposes fiscal 1966 programs requiring some-
thing over $3.1 billion.
AID (Agency for International Develop-
ment) recently published figures showing
that in 1966 it spent $604.5 million of for-
eign assistance funds within the United
States for commodities alone.
Ohio was among the top six states in
selling goods to AID. Its share was nearly
$46 million, a very serious chunk of sales,
wages and profits.
Procurement from American sources makes
up 90% of all AID spending for commodities,
from powdered milk to earth movers..
Such facts are worth knowing when mak-
ing decisions on foreign aid.
Democracy: What It Mezns to Me
EXTENSION OF REMARKS
OF
HON. WILLIAM V. ROTH
OF DELAWARE
IN THE HOUSE OF REPRESENTATIVES
Tuesday, March 7, 1967
Mr. ROTH. Mr. Speaker, I would like
to place in the RECORD for my colleagues'
reading a speech written and delivered
by Miss Diane F. Ambrose of Dover in
the Delaware Voice of Democracy con-
test sponsored by the Veterans of For- -
eign Wars and its ladies auxiliary.
More than 350,000 students from all
parts of the country participated in the
contest competing for the five top' prizes
totaling $13,500, and today Diane is one
of the finalists speaking here in Wash-
ington.
Even more important than the
scholarships is the opportunity given
these young people to address their
countrymen and the world, telling is in
their own words the meaning of democ-
racy as they understand it. Much has
been written and said about the "gen-
eration gap," that seeming lack of com-
munication between young and old.
But, reading Diane's words, none of us,
to whatever generation we belong, can
fail to be moved and filled with renewed
confidence in the future.
Diane has made every Delawarean
proud of her. I join with her parents,
her friends and teachers, and with all
the people of Delaware In wishing her
success as she participates in the na-
tional finals.
The speech follows:
free, as free as the wind blows, as free as the
grass grows, born free to follow your heart.
Stay free, while beauty surrounds you, the
world still astounds you, each time you look
at a star. Live free, when no wall's behind outing one man in charge of the CIA, the
you, you're free as the roaring tide, so there's ? p,BI and all of the military intelligence
no need to hide." services.
This is what Democracy means to me-and The importance that the Soviet Union
I hope-to you. places on front organizations is shown by
this example:
Alexandr Shelepin was a vice president of
the International Union of Students when
CIA: Other Side of the Story-What Red it was founded in 1946. He later became a
vice president of the World Federation of
Are Doing Democratic Youth, Shelepin then shot up to
EXTENSION OF REMARKS
OF
HON. GLENARD P. LIPSCOMB
OF CALIFORNIA
IN THE HOUSE OF REPRESENTATIVES
Tuesday, March 7, 1967
The article follows:
CIA: OTHER SIDE OF THE STORY-WIIAT REDS
ARE DOING
One.ques'tion that keeps coining up in the
latest controversy over the Central Intelli-
gence Agency is this:
Just whom or what is the CIA fighting?
The answer is found in the other side of
the CIA story-the facts on what the Com-
munists are doing all over the world to pene-
trate and grab control of organizations,
underwrite treason and terrorism, stir up
strife, stage revolutions, steal secrets.
It Is the CIA's job to combat these activi-
ties of the Reds in the cold-war struggle
that has been going on in the back alleys of
the world for snore than 20 years.
From intelligence officials in the U.S. and
abroad come authoritative accounts of what
the CIA is fighting, how the Communists
operate and reasons for such CIA programs
as subsidization of work in the foreign field
by some student, labor and other organi-
zations.
Disclosure of this financing brought the
agency under fire, compromised some of its
efforts and even led to demands that the
CIA be abolished.
Reds' use of fronts. As part of its plot to
achieve world domination, Moscow-direceted
Communism maneuvers through interna-
tional front groups.
Worldwide, U.S. Intelligence experts say,
the Communists have 11 such organiza-
tions-all under direct control of the KGB,
the Soviet Committee for State Security,
"operational headquarters" for Russia's
whole cold-war scheme.
These fronts are designed to appeal to
almost every interest. There is a World
Peace Council, and there are international
fronts for labor, youth, women, students,
teachers, scientists, lawyers, newspapermen,
radio-TV workers and "resistance move-
ments."
The head of the KGB-who at this time
is Nikolai Anisimovich Shchelokov-is one of
the world's most powerful Communists be-
cause his agency controls all of Russia's
foreign and military intelligence as well as
Soviet internal security.
become head of the all-powerful KGB. He
now is a top official of the Soviet Communist
Party.
Methods of operation. How do Commu-
nist fronts operate? Here is one way:
Fronts recruit young Africans, Asians and
Latin Americans for training in Communist
countries-as labor leaders or guerrilla
fighters. The brightest are taught how to
overthrow governments and set up Cosn-
Mr. LIPSCOMB. Mr. Speaker, under crmunist ust young regimes. An ultimate aim is to re-
leave to extend my remarks, I submit for A major Americans.
objective of KGB, working
inclusion in the RECORD an important through fronts, is to draw non-Communists
article which appeared in the March 13, into unity with Communists. Such a drive
1967, issue of U.S. News & World Report now is on the upswing in Western Europe,
entitled "CIA: Other Side of the Story- spearheaded by two of the groups, and the the World
What Reds Are Doing." Federation Union of Students.
I believe it is essential at this time that tional A former KGB official who defected to the
there is it complete understanding of the West says that 80 per cent of Soviet person-
serious, ruthless nature of the Commu- nel abroad are "trained professional spies."
nist offensive and the tremendous job The KGB, this man says, rates the U.S. as
CIA faces in this regard. This is what its No. 1 target and seeks to isolate America
the article discusses and I believe it will from its allies on the theory that, when this
be of interest to the Congress and the isolation is accomplished, the U.S. will
public. "crumble from within."
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A.1.104 CONGRESSIONAL RECORD - APPENDIX March 7, 1967
The "unite and capture" theme runs bees of other Intelligence organizations- One of those groups-the Campaign for
through all Communist-front efforts, such excels. But Venezuelan terrorists continue Nuclear Disarmament-mobilized strong op-
al the World Youth Festivals that draw to get arms and money from the Commu- to position to ericans nuclear strategy Treaty
thousands from all over the world. nists.
Costs of these events are high. The Mos- One Communist faction in Venezuela re- Organization. The British Union of Stu-
cow festival In 1957, for instance, Is osti- ccives weapons and training from Fidel dents is now the top target for Communist
mated to have cost up to 150 million dollars. Castro's Cuba-where, only 90 miles from penetration.
The Vienna affair in 1959 cost 50 million. U.S. shores, the KGB has a big stake. Cuba How Asia Is affected. In Asia, the World
The Communist outlay on the youth festival is a transfer point for the Red paymasters Federation of Trade Unions has been the
in Helsinki In 1962 was around 30 million. and spymasters in Latin America. principal transmission belt for Communist
Another one is to take place next year in From the inside-. Throughout South orders.
Sofia, Bulgaria-and the Russians already America, Communist "political action" The series of Communist insurrections
are blaring propaganda against the Ameri- agents infiltrate student groups and labor which broke out over recent years in coun-
can delegation because of the revelation that unions, whip up agitation among peasants try after country-Vietnam, Indonesia, In-
CIA. money financed trips by some young and subsidize bandits. die, Burma and the Philippines-received
Americans to previous festivals. Communists, Western intelligence sources the "go" signal from trade-union centers.
Bonanza for the enemy, The "expos6" of say, control all but four of the national stu- Although the attempted Red revolution
this CIA subsidy-which was carried out dent federations in Latin America-in all in Indonesia in 1965 was smashed, large
under national policy established years ago- countries except Costa Rica, Bolivia, Chile numbers of Communists remain. Both Mos-
is described by U.S. officials as a windfall for and perhaps Uruguay. The Communist- cow and Peking are trying again, U.S. in-
the Communists. At earlier festivals, the front International Union of Students telligence officials believe, to rebuild for
Americans-even though few of them knew claims, in fact, that 82 of the world's na- another revolt.
that CIA money was helping to pay their tional student federations are affiliated with In the Philippines, where suppression of
expenses-succeeded in blunting effects the It. the Huk uprising in the early 1950s Is
Communists hoped to achieve. In the Middle East, the present Soviet ob- counted as one of the CIA's great, but largely
c w U c icinls the
bilclzeA victories the Communists
p
Communist funds also have financed travel
by the Reds' American sympathizers-in-
eluding students-to points behind the Iron
Curtain and to Red Cuba.
The KGB is said to have almost unlimited
funds at its disposal-despite Russia's short-
age of foreign exchange-and more man-
power than the CIA, the FBI and U.S. mili-
tary intelligence combined. One division of
the KGB-the "Department of Disinforma-
tion," or Department D-operates in the
propaganda field. It plants false informa-
tion, including forged documents, wherever
an opportunity exists to smear and discredit
the U.S. specifically and the West generally.
In this, Department D gets help from such
fronts as the World Peace Council, the World
Federation of Trade Unions, the Interna-
tional Union of Students and the World
Federation of Democratic Youth.
An illustration: The World Peace Council
spread charges during the Korean conflict
that the U.S. was using germ warfare. And
two other fronts, the International Associa-
tion of Democratic Lawyers and the World
Federation of Scientific Workers, sent "in-
vestigating commissions" to obtain "evi-
dence" in support of the charge.
What do Reds seek? What the Commu-
nists are attempting to accomplish by under-
cover methods in every country was made
clear in a recent public statement by the
chief espionage official in the Security Minis-
try of Communist East Germany. He was
talking about Germany, but he was enunci-
ating the KGB line for all non-Communist
countries. This top Red spy said:
"To procure information and material is
only one task of our organization.
"The other and more important task Is to
make use of the material and the knowledge
gained for political purposes-to blackmail
the enemy, to demoralize the population,
and to make the Communist Party victorious
in the whole of Germany."
Like all spymasters in satellite states, the
East German official is under KGB control.
In every part of the world, secret Com-
munist activity poses a threat.
scene, 15 tO Stir up eliuugii t,rvuu+c w w++cawu z~sniu iii. l+y+++g o-a, +v.. ~...? . .-.~ .. ?-~ ?-_--?
the stability of countries in which the U.S. A staff study just released by the U.S.
has influence-particularly those where Senate's Internal Security Subcommittee
Americans control big oil reserves. says this:
Examples of the KGB at work in the
Middle East include riots instigated by Com-
munist agents in Jordan, massive supplies
of arms to Syria, bombings in Saudi Arabia
and floods of Communist propaganda pour-
ing from Cairo, which is headquarters for a
number of Communist fronts, such as the
Afro-Asian Peoples' Solidarity Organization.
Africa: Agents busy. In Africa, the Reds
are trying to keep the whole continent in
turmoil.
Moscow and Red China bankroll opponents
of President Jomo Kenyatta In Kenya. Com-
munist Influence in Tanzania has grown to
the point where the Government has under-
taken to nationalize most private business,
The Chinese Communists used their em-
bassy in Burundi as a relay point for weap-
ons and funds sent to rebels operating against
the Congolese Government in Kinshasa.
In the other Congo, of which Brazzaville
is the capital, Communists-including Cu-
bans-control the military forces. In Ghana,
until they were thwarted by the coup that
ousted Kwame Nkrumah, Soviet agents had
penetrated the Government to the point
where they controlled Nkrumah's personal
army and were building a military base to
be used for operations throughout West
Africa.
The Communists regularly supply weap-
ons to rebels in Portuguese: Angola and Mo-
zambique. In Somalia, the Army is equipped
and influenced by the Communists. Soviet
agents are fomenting trouble in Ethiopia.
In Tunisia, Communist penetration is mainly
through students. In Algeria, Soviet eco-
nomic aid is a lever used by the KGB.
North of Africa, in the Mediterranean area,
a step-up of Communism's covert actions
coincides with the growing Soviet rival
presence. All along the fringe of the Medi-
terranean, KGB men are busy. One piece
of evidence: secret stockpiles of weapons, un-
covered in Greece.
Sometimes these activities are flushed into Communist-front efforts are paying off in
the open, on one such occasion, in 1965, West Germany and elsewhere in Europe.
Communist financial support for terrorists in In 1968, for the first time, West German
Venezuela was exposed when three Rod non-Communist unions were persuaded to
couriers carrying $330,000 in cash were send delegations to Poland, Czechoslovakia
seized and jailed. and Russia. A British trade-union group
Venezuelan officials said that the three- sent representatives to Russia. A Catholic
two women and a man-were agents of the federation of trade unions in France was in-
Italian Communist Party, which Moscow had duced to take joint action with the Cozn-
assigned the job of smuggling money to munist-controlled French labor federation,
guerrillas in Venezuela. Some of Britain's non-Communist organi-
The Communist move failed in that in- zations have been heavily infiltrated by
stance because of counterintelligence like Communists and used to promote Soviet
that in which the CIA-according to mesa- propaganda against the U.S.
Previous hearings have established that
Moscow has, in the past, distributed vast
sums, along with its directives, through
various secret channels to support sub-
versive activities in countries outside Russia,
including the United States, and there is
every reason to believe that this practice
continues."
The CIA's role. Countering Communist
activities inside the U.S. is a task of the
Federal Bureau of Investigation. It is the
CIA which has the responsibility for combat-
ting actions in the rest of the world which
are inimical to the interests of this country.
In carrying out that mission, the CIA
must face enemies of many kinds-enemies
masked as "do-gooders" as well as enemies
trained In the dark arts of subversion, es-
pionage, blackmail and assassination-all
dedicated to the Communist aim once stated
bluntly by Nikita Khrushchev and never
denied by his successors: to "bury" the U.S.
WHEN THE "COVES WAS BLOWN"
A veteran U.S. intelligence official, dis-
cussing public disclosure that CIA funds
were being userl secretly to finance sonze
American students at international confer-
ences, said this:
"The U.S., not just the
severe defeat in this thing.
"The U.S. still must fight to prevent the
Communists from having all their own way
in international meetings of students-or
teachers, or scientists, journalists, labor
unions, whatever.
"But now that the CIA cover has been
'blown,' the job will cost much more. And
it will take a long time before any U.S. orga-
nization or group can regain the effectiveness
that the National Student Association had.
"These students were not instructed how
to act, except in a very few cases. Main re-
liance was on the American instincts and
patriotism of almost all the students who
were financially helped to attend.
"The main arm of the Soviet Government's
constant battle to discredit everything Amer-
ican-Moscow's so-called 'Department of
Disinformation'-has been sniping at the Na-
tional Student Association for years. But it
never was able to prove anything.
"Now the Americans have given them the
ammunition-perfect ammunition with
which to fight any American delegation at
any international meeting.
The Americans have acted to 'devour our
own children."'
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