Rogue Agents - 1975-1976 - Crises and Continuation

Rogue Agents: The Cercle and the 6I in the Private Cold War 1951 - 1991 is a book by David Teacher. It is reproduced here by permission of the author.
==Rogue Agents - 1975-1976 - Crises and Continuation==
*Rogue Agents: Contents 
*Previous section: 1971-1975 - Outreach and Operations
===Exposure and relaunch===
Turning back to the spring of 1974, the Cercle complex's domestic and international operations were reaching new heights; indeed at this time, Crozier resigned as Chairman of FWF to turn his attention fully to the ISC and its international contacts via the Cercle. Iain Hamilton, "fully conscious and in touch with the CIA officers in London" took over as Chairman (202). Unbeknownst to
Crozier and the Cercle, the first of two major leaks was about to expose the CIA sponsorship of Forum World Features. The seeds of disaster were sown in the spring of 1974 by the publication of the groundbreaking book The CIA and the Cult of Intelligence by CIA veteran Victor Marchetti and former State Department Intelligence official John D. Marks. Although the CIA temporarily staved off the crisis by forcing the suppression of 168 passages from the book, several of which referred to FWF as a CIA operation and one of which named Crozier specifically, it could only be a matter of time before FWF's cover was definitively blown.
The blow would come a year later. Ironically the leak that would expose FWF and then the ISC came not from a CIA dissident like Marchetti but from the heart of the CIA itself. Due to the CIA's sloppy security procedures, a British World in Action television crew filming at CIA Headquarters in Langley in April 1975 caught sight of a very explosive CIA memorandum. Dated May 1968, the memorandum was from then IOD head Cord Meyer (203)* to CIA Director Richard Helms and described CIA funding of Forum World Features, stating: "In its first two years, FWF has provided the United States with a significant means to counter Communist propaganda, and has become a respected feature service well on the way to a position of prestige in the journalism world". A handwritten note on the document also indicated that FWF was "run with the knowledge and cooperation of British Intelligence". At the same time, the CIA discovered that Marchetti and Marks were planning to release the
suppressed material in London. The CIA took the decision to close down FWF in May 1975, just ahead of the publication in June of an article The CIA Makes the News in the alternative London weekly Time Out which quoted Cord Meyer's 1968 memorandum (204).
The closure of FWF after the exposure of its CIA links was only the first setback; no doubt due to the Press revelations about FWF, the offices of the ISC were burgled in June 1975, and some 300 documents amounting to 1,500 pages were taken. Many of the documents found their way to Time Out which published further long articles in August and September detailing the ISC's links to the British, American and South African intelligence communities (205).
The 1975 revelations however largely overlooked the ISC's international collaboration with the Cercle, even though the haul from the Institute's offices had included the January 1972 Council minutes describing Cercle sponsorship of the ISC Special Report and their £20,000 grant to the ISC for 1973. Another revealing document stolen from the ISC's offices was a very recent internal ISC memo dated 2nd June 1975, detailing a meeting between the ISC and the Cercle held at Ditchley Park:
: "Mr. Crozier told the meeting that after the conference at Ditchley Park, the Pinay group should organize similar sessions in Madrid, Rome, Milan, Brussels and Bonn in the autumn with the object of raising money for the Institute and enhancing its reputation" (206)*.
Crozier records that the conference was a study group which yielded a further ISC Special Report, New Dimensions of Security in Europe. Amongst the notable participants were Pinay himself, Carlo Pesenti and another Italian business leader, Eugenio Cefis, President of the chemical giant Montedison and Vice-President of the Italian business association Confindustria; Cefis was an ally of Pesenti in fending off P2 financier Michele Sindona's take-over bids. A helicopter had to be sent to pick up "the aged President Pinay", but whilst certainly elderly, Pinay was still sprite: as well
as attending the Ditchley Park conference, Pinay made an extensive tour of prominent Cercle friends throughout 1975 to muster support for Crozier's Institute and its planned transatlantic expansion. Amongst those he visited were Richard Nixon, Henry Kissinger, Pope Paul VI, Manuel Fraga Iribarne (then Spanish Ambassador in London), Franz Josef Strauß, Giulio Andreotti and Prince Bernhard of
Holland, President of the Bilderberg Group (207). With such a powerful coalition of political and intelligence contacts to call on, the ISC overcame its temporary crisis (208)* and intensified its activities, notably through a new alliance of the British Right, the National Association for Freedom (NAFF).
===NAFF and Shield===
One month after the Cercle launched its international campaign to raise the profile of the ISC, a new organisation was formed in Britain to bring together the various groups that were "concerned about the relentless spread of subversion" (209). The new group, the National Association For Freedom (NAFF), was formed in July 1975, although not formally founded until December. NAFF's first action in August 1975 was to organise a seminar on subversion where veteran espionage journalist and MI5 friend Chapman Pincher served as guest speaker; unsurprisingly, Pincher would later be a major media outlet for the anti-CND propaganda produced by Crozier's private intelligence service, the 6I. By mid-1977, NAFF boasted 30,000 members (210). The list of members of the Executive and National Council of the NAFF shows that the new alliance was a merger of the SIF, the ISC and the Tory Right, including many of the figures involved in the anti-Labour operations of the previous few years.
The Director of NAFF and first editor of its bulletin The Free Nation was Robert Moss. Moss enjoyed close links to the newly elected Conservative leadership and would soon become one of Thatcher's favourite speechwriters - it was a speech written by Moss and given by Thatcher in January 1976, only six weeks after NAFF's foundation, which famously mocked and then adopted the nickname of "Iron Lady" given to her by the Soviet military newspaper Red Star. Alongside Moss on the NAFF Executive, we find Norris McWhirter, a member of the SIF National Executive, and author with his brother Ross of the NAFF Charter. Ross McWhirter would be assassinated by the IRA just before NAFF's official launch in December 1975 (211)*. 
 
With Moss and McWhirter on the NAFF Executive was Michael Ivens, the Director of the anti-union outfit Aims of Industry. Aims of Industry had bankrolled many of the anti-Labour operations in the early 1970s; it also provided the start-up capital for NAFF. Like McWhirter, Ivens had also served on the SIF National Executive. Aims of Industry was further represented on the National Council of NAFF by William E. Luke, a Board member of Aims since 1958. A former MI5 officer during the war, Luke later served as Chairman of the London Committee of the South Africa Foundation and in 1965 was the founding Chairman of the UK-South Africa Trade Association, active in the pro-Pretoria campaign (212).
The NAFF National Council also included the indefatigable Crozier, who provided NAFF with their first offices - in Kern House, headquarters of Forum World Features. Several other ISC friends would serve on the NAFF National Council, amongst them the Czech exile Josef Josten, who ran the Free Czech Information News Agency, close to MI6. Josten was a major channel for dissemination of the
allegations made by Czech defector Josef Frolik. Another ISC friend on the NAFF National Council was Dr. Kenneth Watkins, an author of pamphlets published by Aims. A month before NAFF's foundation, Watkins had joined an ISC Study Group on Communist subversion in higher education that included Lord Vaizey of the Ditchley Foundation and Professor Edward Shils of the USCISC. The Study Group's findings would be published as an ISC Special Report, The Attack on Higher Education, in September 1977.
Alongside Crozier on the National Council of NAFF was another of the key actors in the counter-subversion lobby, ex-Deputy Director of MI6, G. K. Young, founder of the Unison Committee for Action. As Chairman of SIF, Young brought with him into NAFF almost all of SIF's leaders; besides McWhirter and Ivens who served with Moss as NAFF's "inner core" on the Executive, SIF recruits to NAFF also
included Bilderberger Sir Frederic Bennett, Chairman of the SIF Parliamentary Group, and John Biggs-Davison, former Chairman of the Monday Club, member of the SIF National Executive and Deputy Shadow Minister for Northern Ireland under Airey Neave.
Biggs-Davison would be joined in NAFF by other top Tory MPs from the Monday Club, notably the former MI6 officer Sir Stephen Hastings and Winston Churchill, the latter serving as Thatcher's opposition junior frontbench spokesman on defence from 1976 to November 1978. Also on the NAFF National Council were three other members of Thatcher's Shadow Cabinet who would later hold ministerial
office in Thatcher's government: Rhodes Boyson, David Mitchell and Nicholas Ridley.
The NAFF National Council also included three senior military figures, two of whom would serve on the ISC Council. The first was Vice-Admiral Sir Louis Le Bailly, who had recently resigned as Director-General of Intelligence at the Ministry of Defence (213). The second ISC Council member on the NAFF Council was Sir Robert Thompson, a leading counter-insurgency expert with experience in Malaya in the late 1950s and Vietnam in the early 1960s. The third military figure was Field Marshal Sir Gerald Templer, a wartime head of SOE's German section who was appointed Director of Military Intelligence in 1946 and Vice Chief of the Imperial General Staff in 1948, the year that Prime Minister Attlee sent British troops to combat the Malayan Emergency. For Attlee, Templer also chaired a secret committee to investigate Communist subversion in Britain, concluding that the Soviet Union would continue to try to penetrate the Labour Party, the trades unions, the media and the universities.
From 1952 to 1954, Templer served as both High Commissioner and Director of Operations in Malaya, implementing the Briggs Plan which introduced the "strategic hamlet" concept from 1950 onwards. On his return from Malaya, Templer undertook a worldwide investigation of colonial security for Prime Minister Winston Churchill, completed in April 1955; he was then appointed Chief of the Imperial General Staff of the Army in September 1955, advising the government on the Suez Crisis in 1956 and serving until his retirement in September 1958. In late 1960, Templer was called on to head a sensitive government inquiry into a radical reorganisation of British military intelligence, leading to the merger of the three service branches in the new Defence Intelligence Staff in 1964. From 1966 to 1973, Templer occupied a key post for those fighting subversion: as Lord-Lieutenant of Greater London, he was in charge of all contingency planning for Military Aid to the Civil Power (MACP).
Templer had also played a part in the genesis of the private armies by introducing G. K. Young to Major-General Sir Walter Walker. Walker of the Gurkhas had been a Malayan colleague of Templer and Thompson's, having run the Far East Land Forces Training Centre in Malaya from 1948-49, later founding the Jungle Warfare School at Kota Tinggi. In 1954, he was posted back to the UK and helped to plan the 1956 Suez invasion, before returning to Malaya in 1957 as Commander of the 99th Gurkha Infantry Brigade until 1959, when his unit was sent to Singapore to ensure internal security during the elections. Promoted Major-General, Brigade of Gurkhas, in 1961, Walker then commanded Britain's counter-insurgency campaign in Borneo in 1962-65 where Walker's Gurkhas and his innovative use of signals intelligence broke the back of Indonesia's policy of konfrontasi with British Malaysia. Returning to Europe, he served as Deputy Chief of Staff, NATO Army Land Forces Central Europe (AFCENT) until 1967, when he became General Officer Commanding the Northern Command. In 1969, he was appointed Commander-in-Chief of Allied Forces Northern Europe, serving until his retirement in 1972. In 1974, Walker worked alongside Young within Unison before splitting off to form Civil Assistance. Throughout 1976, Civil Assistance held long negotiations with NAFF about a possible merger of the two groups; the talks were abandoned in October 1976 when Civil Assistance shut down due to lack of active support (214).
 
The NAFF National Council also included an impressive array of the leaders of industry – Viscount De l'Isle of Phoenix Assurance who functioned as NAFF's President, Sir Frank Taylor of Taylor Woodrow, ex-CBI chief Sir Paul Chambers and Sir Raymond Brookes, Chairman of GKN Engineering, a member of the CBI Council and a member of William Luke's UK-South Africa Trade Association. As to the day-today running of NAFF, Crozier records: "To avoid the delays implicit in formal Council meetings, a small group of us decided to function as an informal action committee, without reporting to the Council. Bill De l'Isle presided, and the other members were Winston Churchill MP, John Gouriet, a former Guards officer and merchant banker, Robert Moss and myself" (215)*.
 
By bringing together the ISC, SIF, leading industrialists and top Tories from Thatcher's Shadow Cabinet, NAFF acted as an unprecedented alliance between the operators from the counter-subversion lobby and the candidate they worked to promote. On the links between Thatcher and NAFF, one can do no better than to quote Robin Ramsay and Stephen Dorril:
:"NAFF pulled together all the elements of the previous networks: the spooks, the propagandists, the anti-union outfits, and - this is the difference between NAFF and its predecessors - it brought in a group of Tory MPs with connections all the way to the top of the post-Thatcher Tory Party [...] NAFF was formed just after Mrs Thatcher became leader of the Tory Party. It is difficult not to view it as essentially formed around her [...] Mrs Thatcher duly gave her public blessing to this group, appearing as guest of honour at NAFF's inaugural subscription dinner in January 1977" (216).
:"In its first eighteen months, NAFF initiated what an intelligence officer would have called 'political actions': legal actions against strikes, propaganda about 'scroungers', and 'Marxists' in the Labour Party - and, most spectacularly, its strike-breaking intervention in the strike at the Grunwick factory. These brilliantly successful psychological operations gained them oceans of favourable coverage in the Tory Press, anticipating (and to some extent, setting) the agenda for the Conservative Government of 1979 [...] the first Thatcher administration was the National Association For Freedom Government" (217).
Besides these NAFF actions, the counter-subversion lobby kept up the pressure on the Labour Party in the foreign Press: the smears against Labour politicians and Heath and Thorpe were channelled across the Atlantic, reaching American newspapers in September and October 1975. The message was repeated for a domestic British audience in January 1976, when Lord Chalfont provided a platform for Brian Crozier's warnings of the Red Menace in a television programme on subversion called It Must Not Happen Here (218)*.
An indication of this close relationship between NAFF and the new Leader of the Conservative Party came on the 19th January 1976 when Margaret Thatcher gave her historic "Iron Lady" speech - which had been written for her by Robert Moss. However, the close cooperation between NAFF and Thatcher went far beyond speechwriting and public political support: as Crozier revealed in his memoirs,
several members of NAFF set up a secret advisory committee on security and intelligence matters to brief the Conservative leader. The initiative for the committee, called Shield, came from the ex-SAS/MI6 officer and NAFF National Council member Sir Stephen Hastings who would be active in 1977 in giving a Parliamentary platform to NAFF's psy-ops campaigns. On 9th March 1976 at a dinner hosted by Lord De l'Isle, and attended by Margaret Thatcher and NAFF founding members Crozier, Moss, Gouriet and McWhirter, the creation of the Shield committee was given the goahead. Coincidentally or not, the same day, according to the authorised history of MI5, "the maverick former Deputy Chief of SIS, George Young, gave a speech alleging that three of Wilson's ministers were crypto-Communists" (219).
 
The timing for Shield's creation could not have been more critical; within days, the Labour Prime Minister Harold Wilson resigned, worn down by the psy war waged by his enemies within the British counter-subversion lobby, MI5, MI6, the CIA and BOSS. In the vacuum created by Wilson's mid-term resignation, NAFF and their friends in MI5 and MI6 feared that Michael Foot, the left-wing candidate, might be Wilson's successor. NAFF caused a storm in April 1976 by publishing an editorial in the Free Nation urging the Queen to dissolve Parliament and call fresh elections if a Labour government under Foot were to succeed Wilson. Another article in that Free Nation issue was written by "a recently retired counter-subversion chief of MI5" (220).
===The Cercle's Alpine allies===
Whilst the counter-subversion lobby mounted their campaign in Britain against "Communist infiltration" of the government and the unions, Karl Friedrich Grau and his Frankfurt Study Group had also been spreading much the same message from the ISP's safe refuge over the Swiss border. At the same time, Grau was the linch pin of the German PEU section, acting as its Federal Secretary through until 1975. Whilst cooperation between the Belgian, French, German and British components of the Cercle flourished in the period 1974-76, Grau himself ran into controversy, first in Germany, then in Switzerland.
Grau's far-right views became an embarrassment for the CDU party hierarchy when it was revealed in early 1974 that he had held meetings with militants of the neo-fascist NPD party with a view to concluding an alliance for the Hesse regional elections (221)*. The controversy led to the resignation in May of five CDU MPs from Grau's Frankfurt group, the Studiengesellschaft für staatspolitische
Öffentlichkeitsarbeit [Study Group for Political Communication] and Grau's formal exclusion from the CDU in June. In the interim, the co-founder of the Study Group, the CDU's Dr. Walter Hoeres, took over as President. The storm did not last long however, and in a Study Group circular in November, Grau could boast that the loss of the five CDU members had been offset by applications for membership from CSU MPs. In any case, Grau's services as clandestine fundraiser for the CDU/CSU were too valuable to lose, and the CDU quietly readmitted him in May 1976 in time for the national elections.
Grau would score a coup for his Swiss group in early 1976 when he got the agreement of Swiss Air Force Major-General Ernst Wetter to act as President of the ISP. A former Head of Air and Air Defence Forces from 1968 to 1974, Wetter served from 1975 to 1980 as personal advisor to the Swiss Ministry of Defence (Département Militaire Fédéral - DMF/Eidgenössisches Militärdepartement - EMD). However, Grau's coup rebounded on him and became an own goal; a few months later, Wetter was forced to resign from the ISP Presidency by the DMF which did not take kindly to
Swiss military personnel using their rank in their private lives. The incident led to an investigation of the ISP and trouble for Grau. To obtain Wetter's agreement, Grau had claimed that the three International Vice-Presidents of the ISP were the CDU foreign and defence policy spokesman Dr. Werner Marx, Jean Violet, and a Viennese lawyer called Wolfram Bitschnau. Grau had the habit of using people's names without taking the trouble of asking them, and, on checking, all three men denied any knowledge of being an International Vice-President of the ISP.
 
The denials ring hollow: although they may never have actually held office within the ISP, all three men had links with Grau. Marx had been a longstanding speaker for Grau's Frankfurt Study Group, even if he had been one of the five CDU MPs to "leave" the Study Group after the 1974 scandal about Grau's contacts with the NPD. Together with Huyn, Marx had also represented Germany on the International Council of CEDI since at least 1972. As for Violet, Grau was one of the earliest and closest allies of Violet's AESP, and several German AESP members including Habsburg and Huyn spoke regularly at ISP seminars. Bitschnau was the Habsburg family's longstanding Austrian lawyer and also was connected to the AESP; a year later, in 1977, Academy documents listed Bitschnau as an AESP member in his capacity of President of the Institut für Internationale Zukunftstudien [Institute for International Studies of the Future] (222)*. The official investigation into the ISP drew attention to the murky nature of Grau's political activities, and he was issued with a formal warning by the Swiss government in May 1976. Following a parliamentary question, the Swiss government declared "Mr. Grau has received a warning for interference in Swiss internal affairs and for undesirable political activities and has been threatened with expulsion under Article 70 of the Federal Constitution" (223). Whilst Grau had to tone down his operations for a while, the Swiss government would never follow up on its threat to expel him.
What then were these "undesirable political activities" of Grau's that interfered with Swiss internal affairs? An examination of some of the ISP's conferences in 1975 and 1976 shows that Grau was doing in Switzerland exactly what the ISC had started doing in Britain in 1972: giving seminars on Communist subversion to government and police officials. One of the ISP's subversion seminars was held between 29th September and 3rd October 1975 in the Tenigerbad Hotel in Rabius; with heavy irony, a poster in the hotel lobby announced an "Agricultural Seminar on Pest Control". Inside, the keynote speaker on "farming" was General Reinhard Gehlen, former head of the BND. One third of the audience were officers from the Swiss political police; apart from Grau's Swiss partner Dr. Peter Sager of the SOI, all of the speakers were Germans.
The conference timetables for two further ISP seminars on industrial subversion and counter-espionage in March 1976 give us a fuller picture of the ISP's "undesirable activities". At their height, the seminars were held at the rate of two a month; each lasted five days and included some fifteen presentations by government or police officials from Germany, Switzerland and several other countries.
The first of the two March 1976 seminars opened with a presentation by Ernst Wetter, at that time still President of the ISP. Then Grau gave a lengthy introduction to the ISP before handing over to the keynote speaker, Dr. Peter Sager of the SOI who spoke on "the global political situation in the politico-revolutionary war: an analysis of psychological warfare". In the afternoon, a certain Mr. I Reinartz closed the first day of the seminar with a speech on "the importance of industry for Communist strategy and tactics - the company as the battlefield of Communism". Reinartz also gave the morning lecture on the second day on the subject of "the destabilisation of companies by radical left-wing forces - from agitation to action"; the afternoon included two presentations on "protection of data from internal or external access" and "the Communist intelligence services - mission, organisation, function". The seminar would follow the same vein for the five days, giving details of technical and human resources for industrial espionage and counter-tactics against Communist subversion of industry. Inspector W. Dibbern from the Criminal Police, for example, spoke on "the protection of the State today - modern forms of defence" and "when, where and how an infiltration is mounted - how the agent works". 
Another five-day ISP subversion seminar was held at the end of March 1976, and covered much the same topics. This time however, the keynote speaker was not Dr. Sager but Lieutenant-Colonel Ernst Cincera, the most notorious figure in Swiss parapolitics whose long history of collecting files on "subversives" is described below. At the seminar, Cincera spoke on "the clandestine struggle on all levels", a theme that was picked up by the following speaker Dr. J. Kurt Klein, from 1970 until 1989 Scientific Director of the German Army School for Psychological Warfare in Euskirchen, who gave two presentations on industrial subversion. Chief Commissioner Georg Pohl of the German Criminal Police spoke on "terrorism and anarchism in the Federal Republic - a threat to trade and industry", and retired Colonel Rudolf Mischler closed the seminar with three lectures on "action in case of attack by explosive or incendiary bombs (with practical examples)", "what to do in case of attack and hostage-taking?" and "preparations for sabotage and countermeasures".
No wonder the Swiss, touchy about their neutrality, found Grau's seminars undesirable. More information about who was working with Grau in the ISP is given by an ISP speakers' list for 1975-76, a document reproduced in the full third edition of this book (see the frontispiece for download links). Grau himself was of course the most frequent speaker, speaking fourteen times in 1975-76. Grau's speeches concentrated on the Red Menace with titles such as "Is the Bolchevisation of Europe inevitable?" and "The strategy of Communism's clandestine forces". Military psy-ops expert Dr. J. Kurt Klein would be a regular fixture, contributing no fewer than thirteen speeches such as "Soviet espionage in Germany" and "Areas of activity for Communist clandestine forces in Germany". Dr. Walter Hoeres, co-founder of the ISP's Frankfurt parent body and at this time standing in for Grau as its President, would speak eight times throughout the year.
 
Certainly the most controversial Swiss guest of the ISP was Lieutenant-Colonel Ernst Cincera who would soon become the subject of a national scandal in November 1976. "Colonel Ernst Cincera, member of the Radical Party, is well-known for his long and stormy activity as a 'snooper'. Carried out as a private citizen, his activities benefited from close cooperation with the Federal Military Department (DMF) [...] Cincera's information was included on the DMF microfilm files and Cincera worked in extremely close coordination with René Schmid's bureau, the DMF's specialist 'counter-subversion' unit" (224)*. 
For many years, Cincera had been running a private counter-subversion service called Informationsgruppe Schweiz (Information Group Switzerland) which from 1974 on published its denunciations in the private bulletin WasWerWieWannWo - Information über Agitation und Subversion des politischen Extremismus in der Schweiz [WhatWhoHowWhenWhere - information on agitation and subversion by political extremists in Switzerland]. Cincera and his agents worked closely with the Schmid bureau, a secret counter-subversion unit set up within the DMF's Health Department under the leadership of Colonel René Schmid, Chief Medical Officer of the Swiss Army (225)*. The exchange of information between Cincera's group and the Schmid bureau was direct: in 1975, one of Cincera's young agents, Andreas Kühnis, supplied the Schmid bureau directly with a list of participants at a seminar organised by the Salecina Foundation. On the orders of Colonel Schmid, his bureau then sent back to Cincera's group a request for further information and included for each "suspect" an identity photo and a specimen signature drawn from the DMF's personnel records (226)*.
In exchange for its services, Cincera's group regularly received DMF files from the Schmid bureau, a case of illegal access which would be exposed - with the help of Andreas Kühnis - by members of the Democratic Manifesto in November 1976. The national scandal that ensued would be repeated the following year when the members of the Democratic Manifesto revealed that over 1,700 pages of material from Cincera were stocked on one single computer cassette amongst the thousands held by the Army in its MIDONAS database, the Military Document Reference System, which included all articles written about the Swiss Army and military service.
Cincera's material included personal and political data on each "suspect", one of whom was journalist Jürg Frischknecht of the Tages-Anzeiger, one of the authors of Die unheimlichen Patrioten, a comprehensive exposure of the Swiss Right. Frischknecht's case shows the kind of cooperation between Cincera's network and Grau's ISP. At the second ISP seminar in March 1976, described above, Grau had accepted to answer written questions from Frischknecht, but in fact never did so. In 1977, when the members of the Democratic Manifesto obtained the MIDONAS cassette, they found in Cincera's file on Frischknecht the list of questions that he had submitted to Grau the previous year. The DMF kept an embarassed silence about its cooperation with Cincera, but the newspaper close to Cincera, Abendland, confirmed the facts: "One of the people responsible for setting up the DMF's new computer system stayed in contact with Mr. Cincera for several months to clarify to what extent his archives could be linked to this information system" (227).
 
Despite his notoriety, Cincera would be a frequent speaker at ISP seminars, speaking no fewer than seven times in 1975 as well as his contribution to the March 1976 seminar mentioned above. His subjects included "agitation and subversion as a means of Communist strategy" and "agitation against the Army - agitation within the Army" (228)*. Cincera was of course not the only Swiss contributor to the ISP: Jürg Meister, a military journalist and editor of Grau's intern-informationen from 1972 to 1976, spoke six times for the ISP in 1975-76, whereas Dr. Peter Sager, Grau's partner since 1961 in their Frankfurt-based SOI support group, spoke at three ISP seminars in 1975-76 on predictable themes such as "The changing face of Communism - a narcotic to dupe the West" and "Why the Communists in the non-communist world do not want peace". At this time, the SOI was expanding its activities, adding a second monthly review SOI-Bilanz to its bi-monthly journal Zeitbild, both of which were distributed in Germany by Grau (229)*.
Most of the ISP speakers were, however, Germans, including the luminary of the Catholic conservative Right, Brigadier-General Professor Friedrich August Freiherr von der Heydte, the veteran President of the Abendländische Akademie, one of the earliest members of CEDI and a speaker for Grau's Hamburg-based group, the SWG. Heydte spoke three times for the ISP in 1975-76; at this time, he was in his final year as Professor of Law at Würzburg University, handing over in 1976 to Dieter Blumenwitz who is presented below. Another ISP speaker was Wolfgang Reineke, a Heidelberg-based business advisor since 1974, who gave six speeches for the ISP in 1975-76; he would later figure in Cercle/6I anti-disarmament groups in the 1980s.
 
The CSU's political foundation, the Hanns-Seidel-Stiftung, also contributed to the ISP: the Chairman of the HSS Defence Policy Working Group from 1973 to 1979, CSU MP Franz Handlos, spoke four times for the ISP in 1975-76, as did the HSS representative in Paris, French Army Colonel Ferdinand Otto Miksche. In August 1954, Miksche had attended the III CEDI Congress with Habsburg and Heydte; all three would be ISP speakers in 1975-76 and also contribute to the SWG. Another SWG friend – indeed, with Grau, the co-founder of the SWG - who spoke four times for the ISP in 1975-76 was Hugo Wellems, editor from 1967 until his death in 1995 of both the SWG's Deutschland-Journal and the Ostpreußenblatt, the largest selling German expellee newspaper which regularly advertised SWG and PEU publications and conferences. A further frequent speaker and writer for both the SWG and the Ostpreußenblatt who gave four lectures to the ISP in 1975-76 was Friedrich-Wilhelm Schlomann, who had fled from East Germany in 1950, soon joining the Kampfgruppe gegen Unmenschlichkeit [Combat Group against Inhumanity], a West Berlin-based group funded by the CIC/CIA and Gehlen Org which carried out intelligence-gathering and sabotage missions in East Germany until its dissolution in 1959. Schlomann would then become a veteran mainstay in the Ministry of Defence's Psychological Warfare Directorate founded by Strauß and Marx in 1958; after starting with the Directorate in 1959, Schlomann would work there for over a decade. In 1970, he joined the German state radio broadcaster Deutsche Welle, serving as Editor of its foreign broadcast monitoring service until 1992; during this time, he also produced several books on intelligence matters with a focus on East Germany, Vietnam and China. 
A foreign dignitary speaking three times for the ISP in 1975-76 was Pinochet's Cultural and Press Attaché in Berlin, journalist Lucía Gevert Parada, who was appointed as Chilean Ambassador to Germany in February 1976, serving until October 1978; she also gave lectures to the SWG. A British guest at the ISP was Reginald Steed, the foreign policy lead writer for the Daily Telegraph in the 1960s and 1970s, and its Deputy Editor from 1978 on; he spoke four times for the ISP in 1975-76, having contributed to the SWG and the Ostpreußenblatt from November 1973 on.
Another foreign lecturer for the ISP was veteran French paratrooper Brigadier-General Albert Merglen from Alsace. In 1951-53, Merglen had been Deputy Commander and then Commander of the Foreign Legion's 2e Bataillon Etranger de Parachutistes, seeing service in France's Indochina War; the unit would later be annihilated during the Điện Biên Phủ siege of April-May 1954. After fighting in Algeria with the 1er Régiment de Chasseurs Parachutistes and spending three years at the Infantry and Paratroop School at Fort Benning, from 1961 to 1963 Merglen had been the last commander of the 11e Demi-Brigade Parachutiste de Choc, the famed special forces unit that carried out SDECE operations, which was disbanded in December 1963 due to fears of its sympathy for l'Algérie française. Merglen then ran the French Army's paratroop school before retiring from military service in 1970. Besides giving no fewer than nine lectures for the ISP in 1975-76, Merglen also spoke for the SWG and the Ostpreußenblatt from May 1974 on.
Several of Grau's associates from the Deutschland-Stiftung would also support the ISP. The CSU foreign policy spokesman Count Hans Huyn, a Board Member of the Deutschland-Stiftung, was one of the most frequent contributors, giving eight lectures at ISP seminars in 1975, mostly on his specialist theme of Ostpolitik, Germany's relationship with Eastern Europe. Another Deutschland-Stiftung member
active within Grau's ISP was former Brigadier-General Heinz Karst who had taken early retirement as head of the Army's Education and Training Corps in October 1970 after political differences with Brandt's Defence Minister, Helmut Schmidt. Karst, the Chairman of the Deutschland-Stiftung from 1973 to 1977, spoke at six of the ISP's conferences in 1975-76. Habsburg himself spoke at four ISP seminars in that year and had been writing articles for Grau's Frankfurt Study Group since at least 1965 as well as speaking for the SWG as did Huyn and Karst.
 
Two winners of the Deutschland-Stiftung's Konrad Adenauer Prize also acted as speakers for the ISP in 1975-76: Professor Hans-Joachim Schoeps of Erlangen University, the 1969 prize winner who spoke twice for the ISP and also spoke for the SWG, and Winfried Martini, a journalist for Die Welt, the Rheinischer Merkur and the Bayern-Kurier who was the Deutschland-Stiftung's 1970 prize winner. Martini, who spoke eight times for the ISP in 1975-76, was working closely at the time with Dr. Hoeres to found the right-wing quarterly Epoche; he also wrote for the Ostpreußenblatt, whose 1975 book to commemorate the newspaper's 25th anniversary included contributions from Habsburg, Martini, Merglen, Merkatz, Miksche and Steed.
The close links between the Deutschland-Stiftung and Grau's ISP would be illustrated by one incident when the Deutschland-Magazin quoted Grau's smear bulletin intern-informationen in accusing SPD Minister and Brandt's Head of Chancellory Horst Ehmke of contacts with the Czech secret service. After losing a libel suit, the Deutschland-Magazin was forced to retract its allegations - Grau however could continue to publish them with impunity from intern-informationen's address in Switzerland (230). The Deutschland-Magazin would also work closely with the magazine Zeitbild published by Sager's SOI; as we have seen, it was Grau, Vice-President of the Deutschland-Stiftung, who distributed SOI's publications in Germany (231). When SOI celebrated its jubilee in 1984, it was attended by the President of the Deutschland-Stiftung from 1977 to 1994, Gerhard Löwenthal.
Gerhard Löwenthal was, with Grau and Huyn, perhaps the most important right-wing multifunctionary in Germany throughout the 1970s and 1980s (232)*. Born in Berlin in 1922 as the son of a Jewish businessman, Löwenthal survived internment in Sachsenhausen concentration camp. However, the Communist takeover in East Berlin radicalised him, and he joined the PEU in 1947. Having started a career in broadcasting in 1945 with the American Occupation Forces station RIAS (Radio in the American Sector), Löwenthal was appointed RIAS Deputy Director in 1951, later moving over to the Berlin radio station Sender Freies Berlin after its creation in 1954.
After a spell working at the OECD in Paris from 1959 to 1963, Löwenthal returned to broadcasting, joining the second German television channel ZDF as its European Correspondent and head of the Brussels bureau. He would however soon rise to become one of Germany's most prominent television anchormen as presenter of the fortnightly current affairs programme, ZDF Magazin, which he would present from January 1969 right through until December 1987. This programme gave Löwenthal the media power and public recognition of a Robin Day or a Jeremy Paxman, television access which he used to focus heavily on Soviet repression in Eastern Europe and particularly in East Germany. He was a close political ally of Franz Josef Strauß who was a frequent guest on his programme; Brian Crozier would also later benefit from television airtime thanks to Löwenthal. Löwenthal also had excellent contacts with the BND and particularly with Gerhard Wessel, Gehlen's deputy during and after the war and his successor as BND President from 1968 to 1980; Löwenthal was a frequent personal guest of Wessel's at BND headquarters
(233).
An early example of cooperation between Löwenthal and the Cercle complex's German contacts was the creation in 1973 of the Freie Gesellschaft zur Förderung der Freundschaft mit den Völkern der Tschechoslovakei [Free Society for the Promotion of Friendship with the Peoples of Czechoslovakia]. Alongside Löwenthal as founding members of the Free Society, we find three future speakers at Grau's ISP subversion seminars: Count Hans Huyn, Ludek Pachmann and Walter Becher. Ludek Pachmann was a Czech exile and former Chess Grand Master who would give five presentations on Czechoslovakia at ISP seminars in 1975-76. Throughout the 1970s and 1980s, Pachmann would be an inseparable sidekick of Löwenthal's, a German Crozier-Moss act.
Walter Becher was from the Sudetenland, the German-speaking part of the Czech Republic. In 1931, Becher joined Hitler's NSDAP; in 1933, he joined the Sudetendeutsche Heimatsfront [Sudeten German Homeland Front, later Party] led by Konrad Henlein, who would be appointed Reichskommissar of the Sudetenland when it was annexed by Hitler in October 1938. After the war, following the expulsion of some three million ethnic Germans from the Czech Republic, Becher would play a prominent part in exile politics, sitting in the Bavarian Parliament for a small exiles' party between 1950 and 1962. In 1965, he was elected to the Bundestag; after joining the CSU in 1967, he would continue in the Bundestag as a CSU MP until 1980, sitting throughout the period on the Foreign Affairs Committee where he was one of the most outspoken opponents of Brandt's Ostpolitik. Besides his parliamentary role, Becher would also speak three times for Grau's ISP in 1975-76; the ISP speakers' list gave Becher's address as Pullach bei München, the location of the BND headquarters, where he still lived when he died in 2005.
Two further founding members of the Free Society were Jaroslav Pechacek, Head of the Czech Division of Radio Free Europe, the CIA-funded radio station, and Rainer Gepperth, Director of the International Department of the Hanns-Seidel-Stiftung, the CSU's political foundation, examined in later chapters. The final founding member of the Free Society in 1973 was a person with close links to two early anti-communist propaganda groups, one in Britain and one in Germany: Cornelia Gerstenmaier. 
Cornelia Gerstenmaier was the daughter of Eugen Gerstenmaier, from 1954 to 1969 the longest serving President of the Bundestag, prominent member of the CoE Parliamentary Assembly from 1950 to 1957 and an early CEDI member. In 1970, she would be one of the founding members of the British-based Centre for the Study of Religion and Communism, run by the Reverend and later Canon Michael Bourdeaux. The CSRC would later change names to Keston College and more recently to Keston Research, but would remain focused on the same theme: the repression of the freedom of worship in the Communist bloc. It has been alleged that the CSRC was an IRD/MI6 front similar to the ISC which was created around the same time. The attribution of the CSRC to the IRD is given credence by the revelation in Crozier's memoirs that shortly before the CSRC's foundation, the IRD had officially curtailed publication of its own Christian anti-communist output, the Religious Digest (234). 
The young CSRC certainly had close ties to other intelligence-linked propaganda outlets such as the ISC: Bourdeaux was one of the contributors to Crozier's 1970 anthology for Common Cause, We Will Bury You, and the CSRC's publications were distributed by the same outfit used by the counter-subversion lobby, SOI and Interdoc: Stewart-Smith's FAPC. The KGB was always interested in
Keston: one of the special tasks for former KGB London Resident Oleg Gordievsky was to monitor Keston's activities, and former KGB Major-General Oleg Kalugin later confirmed that the KGB's Counter-Espionage department kept a close eye on Keston (235)*.
However, Cornelia Gerstenmaier's real significance lay in her role in running an organisation which acquired a certain notoriety in the 1980s, the Internationale Gesellschaft für Menschenrechte [IGfM, International Society for Human Rights, ISHR]. The IGfM was first founded in Frankfurt in 1972 as a purely German organisation, the Gesellschaft für Menschenrechte [GfM, Society for Human Rights], which would be chaired from 1973 to 1978 by Gerstenmaier (236)*. It is interesting to note that the GfM was founded around the same time as the trio of ISC, Cercle and AESP launched their Helsinki Appeal on human rights; the foundation of the GfM may represent a German pillar to the complex's campaign.
 
The GfM's future political orientation was illustrated by its founding members, who stemmed from the NTS, a group of former Russian Nazi collaborators funded by the CIA and intimately linked to WACL. The founding members of the GfM included Ivan Agrusov, President of the NTS, and Leonid Müller, the NTS Treasurer. The IGfM also had close connections to the German Right; on the Board of the GfM or IGfM at one time or another were Habsburg, Merkatz, Pachmann and Sager. The GfM became international in 1981, and by 1988 it had 16 foreign sections; its campaigns in the 1980s are described in a later chapter.
Another early organisation of note created by Löwenthal was the Konzentration Demokratischer Kräfte [KDK, Concentration of Democratic Forces, also known as Korrigiert den Kurs - Correct the Course], a right-wing ginger group that campaigned for the CSU. Löwenthal's partner for the 1974 creation of KDK was Dr. Lothar Bossle, whom we will meet again in the late 1970s as a partner in the Cercle's German operations.
No presentation of the Cercle's German friends in the mid-1970s would be complete without mentioning Hans Josef 'Jupp' Horchem, from 1969 until 1981 Director of the Hamburg regional branch of the German security service Bundesamt für Verfassungsschutz [BfV, Federal Office for the Protection of the Constitution]. Having joined the BfV in 1957, Horchem rose to become one of its top analysts on left-wing extremism before moving over in later years to concentrate on right-wing extremism. Horchem's first known appearance in the Cercle complex came in March 1973 when he wrote a Conflict Study for the ISC, West Germany: "The Long March through the Institutions"; this would soon be followed by two further Conflict Studies, West Germany's Red Army Anarchists published in April 1974 and Right-wing Extremism in Western Germany published in November 1975. In March 1976, Horchem joined the ISC trio of Crozier, Moss and Professor Paul Wilkinson as speakers at a major international conference on terrorism in Washington chaired by Robert Fearey (237)*. In 1978, he served as a special consultant to the Spanish government in anti-terrorist measures, and from 1980 on would also advise the Basque regional government. In the early 1980s, Horchem would also work closely with Löwenthal within the right-wing ginger group Konservative Aktion, as well as acting as a prime German channel for Crozier's private secret service, the 6I (238).
===The Iberian Peninsular===
In the mid 1970s, right-wing fears about the rise of the Left were reinforced by the fall of the Iberian dictatorships following the Portuguese revolution of April 1974 and the death in November 1975 of the Spanish Caudillo. Coming after Wilson's victory in the February 1974 elections and Mitterrand's favourable position in the run-up to elections in France, the Portuguese revolution provided further confirmation to the Right of a left-wing landslide throughout Europe. The ISC's 1974-1975 annual review, the Annual of Power and Conflict, focused specifically on Portugal: "An introductory article by Brian Crozier, the editor, on Subversion and the USSR makes special reference to the Soviet Union's activities in Portugal" (239), and in his article for the Annual, Western Europe's Year of Confusion, Kenneth Mackenzie summarised the situation in saying: "By early 1975 Portugal looked in distinct danger of becoming the first country in the Alliance to fall under Communist control" (240).
Apart from the weakening of NATO's southern flank, the Portuguese revolution also had strategic implications outside of Europe, due notably to the new Portuguese regime's decision to withdraw from its African colonies of Angola and Mozambique, riven by war between Cuban-backed pro-Soviet forces and pro-Western forces supported by the CIA and the Rhodesian Central Intelligence Office. The Portuguese withdrawal from Africa coincided with the death in Spain of a bastion of Western values, Caudillo Franco. Following the American doctrine of the "domino theory", the Right feared that Spain would also be contaminated by the "Portuguese disease" and that the left-wing upheaval in Portugal could drag Spain down with it. The worrying situation of the Iberian peninsula would be one of the major focuses for the ISC's publications between 1974 and 1976, which included two Special Reports and two Conflict Studies: Revolutionary Challenges in Spain (a Special Report by Robert Moss, June 1974), Southern Europe: NATO's Crumbling Flank (June 1975), Portugal - Revolution and Backlash (September 1975) and Portugal and Spain: Transition Politics (May 1976), a Special Report which was the product of an international seminar held in London in mid-1975 and sponsored by the ISC, Georgetown University's CSIS and the Institute for International Studies of the University of South Carolina.
Whilst the geostrategic experts at the ISC alerted their readership to the danger of a Communist take-over in the Iberian peninsula, the ISC's allies in the Cercle complex channelled financial aid to right-wing leaders in Portugal and Spain through Franz Josef Strauß and Otto von Habsburg. In Portugal, the main beneficiaries of Cercle support were two putschist Generals who would be central
figures in the history of the Portuguese revolution and its aftermath: General Kaúlza de Arriaga, former Commander of Portuguese Forces in Mozambique from 1969 to 1974 and leader of a group of extreme right-wing Army officers, and General António de Spínola, former Governor-General and Commander-in-Chief of Portuguese Guinea (later Guinea-Bissau) from 1968 to 1973. Strauß would give
generous clandestine funding to both Arriaga and Spínola until at least 1979, and both men would be in contact with the top members of the Cercle Pinay. Within a year of an attempted coup in March 1975, Arriaga would attend CEDI's 1976 annual Congress in Spain with top Cercle members; both Arriaga and Spínola would attend meetings of the Cercle itself (241).
Following a serious stroke in 1968, the Portuguese dictator António de Oliveira Salazar had been replaced as Prime Minister by his previous deputy Marcelo Caetano. Caetano's attempt to introduce a modest reform programme of the Estado Novo was strongly resisted and eventually foiled by hardliners in the Portuguese Armed Forces. In December 1973, Arriaga and a group of extreme right-wing officers and politicians approached Spínola to canvass his support for a coup against the Caetano government. Spínola however refused to become involved and revealed the plot to Caetano who rewarded Spínola by appointing him to the recently created and powerful post of Deputy Chief of Staff of the Armed Forces. This promotion would however be short-lived; following the furore caused by Spínola's book Portugal and the Future, which indicated that the wars in Portugal's African colonies could not be ended by military means alone but also required reform at home, Spínola was dismissed in March 1974 as was his superior Costa Gomes who had refused to swear an oath of loyalty to Caetano.
After the Armed Forces Movement's bloodless coup which overthrew Caetano on the 25th April 1974, Spínola was appointed President of the seven-man Junta of National Salvation and President of the Portuguese Republic on 15th May. However, after rumours of his involvement in a planned simultaneous counter-coup in Lisbon and Luanda scheduled for the 28th September, Spínola was replaced as President of Portugal by his deputy Costa Gomes on 30th September, and Kaúlza de Arriaga and three former Caetano ministers were imprisoned. Spínola's supporters then went underground; Spinolist Army officers with experience of counter-insurgency with the FNLA in Angola joined with former agents of the shattered former intelligence and security service PIDE to create a clandestine army, the ELP (Exército de Libertação de Portugal, Army for the Liberation of Portugal). With its cover blown and its offices and archives seized by the Armed Forces Movement, Aginter Presse also took up the fight within the ELP: Guérin-Sérac and his lieutenant Jay Salby were prominent ELP commanders. Further help for the ELP came from supporters of Arriaga, who would later join him after his release from prison in January 1976 in the Movimento Independente para a Reconstruçao Nacional (MIRN). Spínola and the ELP made a second coup attempt on 11th March 1975, which also failed, and Spínola was forced to flee Portugal.
In exile in Switzerland, Spínola founded the MDLP (Democratic Movement for the Liberation of Portugal), a coalition of former Caetano officials and members of the ELP. Throughout 1975, whilst the ELP carried out several hundred bomb attacks in Portugal to destabilise the government of the left-wing Armed Forces Movement, Spínola travelled around Europe, seeking support for a putsch, should the Left win the Parliamentary elections to be held on 25th April 1976, the second anniversary of the 1974 revolution. After meeting the American Ambassador to Portugal, Frank Carlucci, in the US air base at Torrejón in Spain at the beginning of August, Spínola travelled to Bonn where he met a key contact: Franz Josef Strauß, who also arranged for Spínola to meet a friend with international influence in the field of finance, Hermann Josef Abs. Abs, described by David Rockefeller as "the leading banker of the world", was a former head of the Deutsche Bank who also served as a close advisor to Chancellor Adenauer.
Abs had been head of the Deutsche Bank from 1940 to 1945. The Deutsche Bank was the Nazis' bank throughout the war; Abs was in effect Hitler's treasurer. Abs was also on the Board of chemicals conglomerate I. G. Farben and participated at company Board meetings when members discussed the use of slave labour at a Farben rubber factory located in the Auschwitz concentration camp (242). The Deutsche Bank's collaboration with the Nazi regime did not lead to a purge of its staff; after the war, Abs continued on the Board of the bank, serving as spokesman for the Board from 1957 to 1967 before being appointed Honorary Chairman of the Board in 1976.
Besides his banking activities, Abs was also one of the key German partners of Dr. Joseph Retinger in his efforts to set up the CIA-funded European Movement and the Bilderberg Group. Abs was one of the two leaders of the German section of the Independent League for Economic Cooperation, one of the five organisations that made up the European Movement; Abs would chair the EM's Economic and Social
Commission in 1955 (243). Abs was also one of the founding members of the Bilderberg Group, having served on the 1952 organisation committee with Pinay, Voisin, Ball and Bonvoisin. The friendship between Abs and Strauß dated back to at least the mid-1950s when the two men met at meetings of the Bilderberg Group; Strauß, then Nuclear Power Minister, had attended the Bilderberg conference in Garmisch-Partenkirchen in September 1955. One year before the 1975 meeting between Abs, Strauß and Spínola, Abs and Strauß had both attended the 1974 Bilderberg conference held in April in Megève, France (244). Abs was also a longstanding member of CEDI; with Strauß, Abs attended the XI CEDI Congress in 1963 (245). Together with AESP and CEDI member Merkatz, Abs was a member of
CEDI's informal German section, the Europäisches Institut für politische, wirtschaftliche und soziale Fragen (European Institute for political, economic and social issues).
After his meeting with Abs, Spínola moved on to Paris, where he met a representative of the arms company Merex, founded in 1966 by former paratroop Major Gerhard Georg Mertins, a colleague of Otto Skorzeny, the Nazi commando in exile in Spain who was a major rallying point for European fascism. Besides its links to the extreme Right, Merex also had a close working relationship with the BND (246). In Paris, Spínola also had the opportunity of soliciting the support of Western intelligence agencies for his planned coup, meeting the CIA Head of Station Eugen Burgstaller and attending as guest of honour a meeting organised at the Paris Sheraton by Colonel Lageneste, in charge of SDECE foreign relations (247). The Sheraton meeting was in fact a major conference bringing together all the anticommunist forces in Portugal; amongst those present were Spínola, CDS party leader Freitas do Amaral, Manuel Allegre of the Portuguese Socialist Party and Jorge Jardim, leader of the Portuguese colonists in Mozambique, who would later also meet top Cercle members at the 1976 CEDI Congress. Amaral also had close links to the Cercle, as a letter from Habsburg to Damman of 29th August 1975 shows:
:"I sent replies to your previous letters via Pöcking [the Archduke's Bavarian residence] because of my trip to Portugal during which - for good reasons - I didn't dare to write or even take notes. I had very interesting contacts, particularly with the leadership of the CDS, who deserve our support. I am planning to bring their leaders - this is highly confidential - Amaro da Costa and Freitas do Amaral to Bavaria in the second half of September. In the meanwhile, I have suggested to Mr. Strauß that we should set up Portugal Support Committees, whose aim would be to give moral and financial support to the freedom forces in Portugal. We should act as the Communists did in relation to Vietnam in organising public demonstrations, collections, appeals and support groups formed by intellectuals, etc. I hope that Strauß will accept the idea. I don't see why the Communists should be the only ones to support their friends or why we should practice non-intervention" (248)*.
By the end of September, Spínola was in Lausanne where he met John McCone, a former director of the CIA who then worked for ITT; ITT promised $300,000 for Spínola's putsch. Despite the support of several foreign intelligence services and pledges of several hundred thousand dollars from ITT and other multinationals, Spínola's plans were wrecked just before the April 1976 elections by investigative journalist Günter Walraff who, posing as a right-wing militant, had tape-recorded Spínola's conversations about his plans for a putsch (249).
In Spain, the death of Caudillo Franco in November 1975 set a challenge for the Cercle: could the "Portuguese disease" be prevented? From 1975 to 1977, Strauß channelled clandestine funds to a trio of former Franco Ministers who led parties within the Alianza Popular (AP) coalition, founded in October 1976. We have already met the most important of the three, AP's founder and President from 1976 until 1986: Manuel Fraga Iribarne, Franco's Information Minister from 1962 to 1969, and a contact of Damman since 1963 and of Crozier since 1965, joining the AESP in 1970. Removed from his ministerial post in 1969 in a purge of opponents of Opus Dei, Fraga Iribarne served as Spanish Ambassador in London from 1973 on; he would receive a personal visit there from President Pinay as part of Pinay's 1975 European tour to promote the ISC. After Franco's death, Fraga Iribarne returned to Spain in December 1975, formed the Reforma Democrática party and served in the first post-Franco government as Vice-President of the Government and Interior Minister. Fraga also sat on the eight-man committee that drafted the 1978 Constitution.
The second Strauß beneficiary was Federico Silva Muñoz, Public Works Minister from 1965 to 1970, prominent member of Opus Dei, leader of Acción (later Unión) Democrática Española and Honorary President of Fraga's AP coalition. The third recipient of CSU funds was Cruz Martínez Esteruelas, President of the Unión Democrática del Pueblo Español, who had served in Franco's last two cabinets as Planning and Development Minister in 1973 and Education and Science Minister in 1974. All three were given generous covert funding by Strauß: in 1977, Fraga Iribarne received at least DM 135,000, and Silva Muñoz and Martínez Esteruelas DM 100,000 each. Fraga Iribarne had had an opportunity that year to discuss funding with Strauß; the two men met in April 1977 at the Bilderberg conference organised in Torquay by Sir Frederic Bennett (250).
Strauß's support for Fraga Iribarne would continue well into the 1980s via their respective party foundations:
:"In 1986, like its sister foundation the [CDU's] Konrad-Adenauer-Stiftung, the [CSU's] Hanns-Seidel-Stiftung would choose the same path for backdoor funding of its activities in favour of the Contras. On the 6th-7th October 1986, a seminar on Latin America with representatives from the Contras was held in Geneva, organised by the Institut Economique de Paris which has close links with the Heritage Foundation. The conference was sponsored amongst others by the Fundación Cánovas [del] Castillo, politically close to the right-wing conservative Alianza Popular. The former President of Alianza Popular - Manuel Fraga Iribarne - is not only an old friend of Strauß and his CSU, but also a well-known right-wing radical in Spain. The Fundación Cánovas [del] Castillo is supported by the Hanns-Seidel-Stiftung, which benefits the Alianza Popular. In 1985 the German Federal Ministry for Cooperation [which funds party foundations like the HSS] approved a grant of 5 million DM to the HSS for the Madrid foundation" (251)*.
===The AESP, VDB and PIO===
Whilst Strauß was funding Franco friends in Spain, and AESP associates Crozier and Grau were organising seminars on subversion in Britain and in Switzerland, the Belgian members of the AESP were active on the domestic front: Defence Minister and AESP member Paul Vanden Boeynants (VdB) and his advisor de Bonvoisin set up a military counter-subversion and propaganda service, the Public Information Office or PIO. PIO was headed by a longstanding associate of VdB and de Bonvoisin, Major Jean-Marie Bougerol. Bougerol would be a central figure in Belgian parapolitics implicated in previous coup plots: the 1976 Gendarmerie report by Roger Tratsaert stated that one of the plans for a coup d'état in 1973 was jointly organised by the NEM Clubs (funded by VdB and de Bonvoisin) and a group of gendarmes and Army officers centred around Bougerol.
 
PIO's genesis - and that of the coup plots in Belgium and elsewhere - lay in the political upheaval in America and Europe at the end of the 1960s. By 1970, the Army had become seriously concerned by the "internal threat" posed by the anti-Vietnam movement and the students' movement after 1968. Moves to create the Army's own counter-subversion agency bore fruit in April 1970, when Chief of the Army General Staff Lieutenant-General Georges Vivario (by 1973, part of an AESP delegation) together with Colonel Paul Detrembleur established the Division des Services Spéciaux (DSD) as an independent unit reporting directly to the Minister of Defence. The unit, headed by a general, brought together members of the Minister's office and representatives from the General Staff of the Army and the Gendarmerie. Composed of five sections, the DSD's specific task was to counter "protest and subversive propaganda". Part of its task was to set up a "Speakers' Bureau", a pool of military personnel trained as media representatives for public debates, television appearances, etc - this bureau would later give birth to PIO. Despite press uproar and the resignation of Vivario's Deputy Chief in protest, the creation of the DSD went ahead.
New impetus was given to the DSD's work in 1972-73 when the new Defence Minister, VdB, introduced reforms of the Army including a plan for the "Military Defence of the Territory" (DMT) designed to counter leftist and pacifist influence by a dramatic reinforcement of the Gendarmerie and greater involvement of the Army and its reserve officers in counter-subversion work. Faced with massive student protests in early 1973 against the DMT plan, the Army tightened military service rules and hardened its stance; in a study on "Objectivity and the Mass Media" dated 13th
September 1973, Lieutenant-Colonel Weber, head of Counter-Information in the Belgian military intelligence service SDRA (252)*, wrote in apocalyptic terms of the threat to freedom and democracy posed by professional agitators within the media and the peace movement, and urged the creation of a permanent group within the SDRA to combat subversion. Weber's study came at a critical moment: in mid-August, the Press had reported the existence of a planned coup. Three days before Weber wrote his study, the Gendarmerie General Staff had received Major de Cock's report alleging links between VdB, de Bonvoisin and the NEM Clubs (253). However, Weber's report and similar concerns within the Army General Staff led to a decision in 1974 to strengthen the Army's counter-subversion and propaganda roles by creating the Public Information Office PIO, headed by Major Bougerol, as an autonomous group within the Army General Staff.
Despite its independent status, PIO had considerable links to the SDRA: Bougerol claims he was given the use of an office within the Counter-Information section of SDRA in 1974-75 whilst he was setting up PIO, and one of his closest collaborators was Commissioner Fagnart of the Military Security section of SDRA. PIO had two official missions, the first of which was to expose Soviet disinformation in the media, largely through the publication of a press review called Inforep. PIO's second task was to act as a clearing-house for information on subversion, distributing information to the Army, the Gendarmerie, the Sûreté de l'Etat - Belgium's internal security agency, and the Foreign Ministry Security Division. Unofficially, Bougerol used PIO to mount the same kind of aggressive counterintelligence programmes that the FBI had been conducting in America under COINTELPRO against the Students for a Democratic Society, the Black Panther Party and the American Indian Movement from 1969 until at least 1976 (254). It is probably no coincidence that PIO's title - unusual for being in English in the original - copied FBI jargon:
:"PIO (Public Information Officer): the FBI classification for the agent whose speciality is providing intentionally inaccurate "facts" (disinformation) to the media; the FBI counterpart to the military psychological operations (psy-ops) specialist" (255).
Amongst PIO's operations were organised sabotage of left-wing conferences, promotion of groups favourable to the Army, and seminars on Soviet subversion. Through such operations, Bougerol set up a network of unofficial correspondents baptised the Miller network, a pseudonym he used when writing in letters to the Belgian newspapers. The 445 known correspondents were a gathering of officers from the Sûreté, the SDRA, the Gendarmerie and police, members of the EEC's security division, militants from the NEM Clubs and other fascist groups, private "security operatives" and innocent or not so innocent journalists (256)*. 
To gain experience of counter-intelligence and propaganda operations, Bougerol went on a European tour in 1976, visiting Northern Ireland, Spain, Portugal, Italy, France and Holland. In several of these countries, Bougerol was hosted by AESP contacts. It is likely that during his visit to the UK, Bougerol had the opportunity of meeting Brian Crozier and the AESP's partners at the ISC - as we will see in the next chapter, Bougerol, de Bonvoisin and Crozier had already met in February 1976 at the AESP's IX Chapter Assembly and would meet again in November that year at the CEDI Congress. Bearing in mind that SDRA Commissioner Fagnart's 1978 letter, quoted in full below, warned Bougerol "we could imagine another danger [...] if there was a leak about the Saud affair or the affairs concerning Formosa, Spain or the UK", it would be interesting to know what Bougerol was up to in the UK. The AESP also provided Bougerol with a host for his visit to Italy the same year: Ivan Matteo Lombardo (257), present at the Parco dei Principi birth of the strategy of tension in 1965, a member of the AESP since 1970 and implicated in the 1974 Sogno coup only two years earlier.
The mention of Formosa in SDRA Commissioner Fagnart's 1978 letter refers to another 1976 trip, this time to Taiwan for training in psychological warfare and counter-information. In this context, it is interesting to note that the Political Warfare Cadres Academy in Peitou (Taiwan), which trained counter-subversion forces for many of the Latin American death-squad states, had extremely close links to WACL which both prospected for business for the Academy and recruited WACL members from the ranks of Academy graduates (258). The Academy has in fact had the closest links with both WACL and the CIA since its foundation: the Academy co-founders were Chiang Kai Shek's son and Ray S. Cline, CIA Chief of Station in Taipei from 1958 to 1962. During this period, Cline was also a channel for financial and logistical support for the founding meeting in 1958 of the Asian Peoples' Anti-Communist League (APACL), forerunner of WACL. Cline would rise to become CIA Deputy Director of Intelligence from 1962 to 1966, and, after resigning from the CIA in 1969, would serve as Director of the Bureau of Intelligence and Research (INR) at the State Department, where he contributed considerably to the anti-Allende operations of 1973, the year which saw his official retirement from intelligence work. The interconnections between the Peitou Academy, WACL, the CIA, Cline and Bougerol seem all the more significant in the light of a reference by Cline in a 1992 BBC interview about Gladio to "the counter-insurgency training given to the Belgian Major Jean-Marie Bougerol and his men in the US" in the early 1970s (259).
Whatever Cline's possible links to Bougerol and PIO in the early 1970s, the CIA veteran and the PIO chief would later share a common friend who did much to help PIO - the American disinformationist of Belgian descent, Arnaud de Borchgrave. Arnaud, Comte de Borchgrave d'Altena, sixteenth in line to the Belgian throne, was the son of Baudouin de Borchgrave, head of Belgium's military intelligence service exiled in London during World War II who then served as Belgian Military Attaché in Washington from 1946 on (260). After war service in the British Navy, Arnaud de Borchgrave started his journalistic career in 1947 as Brussels bureau chief for United Press, also working as a correspondent of Europe-Amérique, forerunner of the Nouvel Europe Magazine subsidised by Bougerol's political master Benoît de Bonvoisin. In 1950, de Borchgrave joined Newsweek as its Paris bureau chief and would stay with the magazine for thirty years, serving as Senior Editor from 1953 on and starring as its chief international correspondent throughout the 1960s and 1970s. During this period, de Borchgrave played a key role in the genesis of PIO; as Bougerol recalled in an interview, it was de Borchgrave who, in the early 1970s, introduced Bougerol to PIO's future patron, Benoît de Bonvoisin. According to a May 1981 Sûreté report on de Bonvoisin's contacts in Paris, de Borchgrave also allegedly acted as an intermediary between de Bonvoisin and the CIA (261).
In the late 1970s, de Borchgrave was one of PIO's prized foreign press contacts; when PIO chartered a plane to fly journalists to the Zairean province of Shaba in 1978, the plane had to wait on the tarmac for one late VIP - de Borchgrave. De Borchgrave subsequently filed reports for Newsweek alleging Cuban involvement in the Katangese invasion of Shaba; Moss drew attention to de Borchgrave's
Newsweek articles in a piece he wrote for the Heritage Foundation's Policy Review in its Summer 1978 issue (262)*. De Borchgrave and Moss were already longstanding friends; they had met in 1972 when de Borchgrave, in hiding in London after writing an article on Black September for Newsweek, asked to meet a specialist on subversion (263). The meeting would herald the beginning of a long partnership between the two men which would reach its peak in the 1980s.
De Borchgrave would also benefit from close contacts with SDECE chief Alexandre de Marenches, who, when asked where would be an interesting place to spend the Christmas of 1979, advised de Borchgrave to go to Afghanistan. De Borchgrave was one of the few Western journalists on the spot during the Soviet invasion (264). De Borchgrave would be fired by Newsweek in 1980 after he was discovered to have been building files on his colleagues for several years. At the time, he was working with Robert Moss on the first of two notorious disinformation novels, The Spike and Monimbo, both heavily influenced by the veteran CIA Counter-Intelligence chief James Jesus Angleton and filled with plots of Soviet subversion launched with the assistance of the Sandinista government in Nicaragua and the complicity of left-wing journalists in Europe.
In 1985, de Borchgrave would become editor-in-chief of the Moonies' newspaper, the Washington Times. The Unification Church would be a forum for cooperation between de Borchgrave and Cline: Cline was on the Editorial Board of The World and I, the Moonies' monthly edited by de Borchgrave. De Borchgrave was a former Board member of the Moonies' US Global Strategy Council, chaired by Cline in the late 1980s. Cline and de Borchgrave also shared a platform with William Casey as speakers at a special conference series on intelligence held at the Ashbrook Center, Ohio in 1986, one of Casey's last public appearances before his death in May 1987. At this time, de Borchgrave was working with Moss and John Rees of the John Birch Society in a "risk analysis" company, Mid-Atlantic Research Associates (MARA); the three also edited a monthly private intelligence report called Early Warning (265)*.
To return to PIO, from the outset, Bougerol used his earlier contacts with the extreme Right for PIO operations. As part of his counter-subversion work, Bougerol gave lectures to reserve officers, many of whom were recruited as PIO agents. One of the reserve officers' clubs at which Bougerol lectured was the Brabant Reserve Officers' Club (BROC), which in 1975 was given the task of bolstering the patriotism of other reserve officers' clubs. BROC's members included not only AESP member Baron Bernard de Marcken de Merken and Colonel Paul Detrembleur, who helped set up the DSD and would later head the SDRA from 1981 to 1984 at the height of the strategy of tension in Belgium, but also Paul Latinus, the Belgian Delle Chiaie, protégé of de Bonvoisin. A former leader of the Front de la Jeunesse financed by de Bonvoisin, Latinus would later emerge as commander of the fascist parallel intelligence service Westland New Post (WNP), a key component in Belgian parapolitics in the 1980s covered in detail in a later chapter. According to Sûreté sources, Latinus was recruited into PIO by Bougerol in 1977; in his limited testimony to the Belgian Parliament's Gladio Inquiry, Bougerol at least admitted having met Latinus (266).
Bougerol's contacts with the extreme Right also extended to de Bonvoisin's other protégé, veteran fascist putschist Emile Lecerf, editor of the Nouvel Europe Magazine, and to future WNP militant Michel Libert, who was introduced to Bougerol by Lecerf. Bougerol and Lecerf were not only personal friends; Bougerol also gave lectures on subversion to the NEM Clubs. These close links between de Bonvoisin's protégés Latinus and Lecerf and Bougerol's PIO are not surprising in the light of the considerable support given to Bougerol by de Bonvoisin, political advisor to Defence Minister VdB under whose jurisdiction PIO fell. 
De Bonvoisin had already provided PIO with much of its logistic structure and would play an ever-increasing part in the running of PIO in the late 1970s. PIO's civilian offices were located in the same building which housed CEPIC, the political ginger group run by VdB and de Bonvoisin; de Bonvoisin's company PDG was also housed at the same address and ensured the printing of the PIO press review Inforep'. From 1976 onwards, PDG contributed more than a million Belgian francs a year to PIO, which received total external funding of some 600,000 Belgian francs a month. De Bonvoisin exerted increasing influence on PIO; by early 1980 the editorial team producing PIO's Inforep consisted of Emile Lecerf and Jacques Van den Bemden, drawn from the other PDG beneficiary, the neo-nazi magazine Nouvel Europe Magazine. The PIO/PDG operation was finally blown in May 1981 when the CEPIC/MAUE/PDG/PIO building was raided as a result of a Sûreté note about de Bonvoisin's patronage of fascist groups. It quickly became apparent that PIO's files had been transferred wholesale to PDG.
Apart from this funding of PIO by de Bonvoisin and the links that Bougerol had with Detrembleur and AESP member de Marcken within the reserve officers club BROC, Bougerol also had frequent direct contacts with the leadership of the AESP and the Cercle. The first trace we find of direct links between the AESP and Bougerol dates from February 1976 when Bougerol attended the IX Chapter Assembly of the AESP together with many of the Cercle's international contacts.
===The Academy in 1976===
On the 6th February 1976, the AESP held its XIX Grand Dîner Charlemagne in the Hotel Métropole in Brussels, before meeting the next day in the more private setting of the Cercle des Nations club for the IX Chapter Assembly of the AESP, devoted to the subject "After Helsinki" - the Helsinki Final Accord had been signed in July 1975. The attendance lists of these two events give us an overview of the Academy's contacts and of their preoccupations. Besides continuing its work on the theme of free movement of persons and ideas linked to the Helsinki Conference on Security and cooperation in Europe, the Academy was a vocal advocate of the Doomsday message that the Third World War had already begun and was being lost by the West, passively submitting to a war of Soviet subversion corrupting the very pillars of Western civilisation. Under the title "Are we at war?", Damman's editorial on the front page of the January 1976 issue of the AESP/MAUE journal Europe
Information which announced the Charlemagne Grand Dinner and the AESP Chapter Assembly opened with the words:
::"One would have to be blind not to notice that the Third World War is in full swing with a new weapon of extraordinary power, acting upon the spirit, the intellect and morale: subversion, slowly contaminating all sectors of society and all regions of the world, is gaining the upper hand because we refuse to confront it head on. All of our political parties including the Communist Party are infiltrated by the agents of Soviet imperialism which has never renounced its goal of world hegemony. The West is still unaware of the power of the subversive forces infiltrating every organisation under the most varied disguises, both in Europe and America and in the countries of the Third World. The Atlantic Alliance ignores this tactical weapon following an extraordinary reasoning which has led it since the end of the last World War to surrender on all fronts to Soviet imperialism [...] Soviet imperialism has in the Western camp a gigantic and ever-active organisation, skilfully structured to maintain anarchy and confusion where they are needed, studied in exact detail to confuse the mind and stoke antagonism. We have become puppets, and it is our enemies who pull the strings". 
This apocalyptic vision of the West slowly being strangled by the invisible forces of Soviet subversion fits entirely with the philosophy of the intelligence-backed counter-subversion and disinformation operations of the day such as the ISC, the Monde Moderne and PIO, all three of which were represented at the 1976 XIXth Charlemagne Grand Dinner and the subsequent IX Chapter Assembly of the AESP: the list of participants includes Crozier from the ISC, Vigneau and Leguèbe from the Monde Moderne, and Benoît de Bonvoisin and "Major de Bougerolle" from PIO (267)*. This would be the first of at least two occasions for the Cercle's counter-subversion propagandists to meet in 1976; as we will see in a subsequent chapter, the same people would meet again at the XXV CEDI Congress in November.
At the February AESP gathering, the Belgian Academy team was fully represented by Damman, de Merken, Jonet, Vankerkhoven and de Villegas. Also attending were three longstanding AESP members whom we have not yet met. Vincent Van den Bosch was another key partner of Damman's, a lawyer and Catholic activist who served as International Secretary-General of CEDI, a core AESP member on the Permanent Delegation, Secretary-General of Damman's MAUE and Administrator of the Cercle des Nations whose Vice-President was Vankerkhoven. Bernard Mercier, an Academy member, served on the Board of the conservative ginger group CEPIC alongside de Bonvoisin, de Kerchove and AESP members Vanden Boeynants and Vankerkhoven; he worked in the cabinet of several PSC ministers. Jean-Paul R. Preumont was Deputy Secretary-General of Damman's MAUE under Van den Bosch, and Secretary-General of the Collège des Jeunes Dirigeants Europeens [CJDE, College of Young European Leaders], an AESP youth offshoot. Preumont had been involved with Damman since at least July 1974, when he had attended the XXIII CEDI Congress along with Habsburg, Sánchez Bella, Huyn, Damman, Jonet, Vankerkhoven and Marcken de Merken (268).
Although Jean Violet himself was not present, most of his closest associates from France were in attendance: Collet, Vallet, Father Dubois and Picard of Wilton Park. The Academy's German members, Dumont du Voitel and Merkatz, were there, bringing along the CDU Vice-President of the Bundestag, Kai-Uwe von Hassel, who had served as the CDU's Deputy Chairman from 1956 to 1969 and had been Regional Prime Minister for Schleswig-Holstein from 1954 to 1963. Following the 1962 Spiegel Affair, Hassel replaced the disgraced Strauß as Defence Minister in 1963, a post he held until 1966 when he was appointed Minister for Expellees, Refugees and War Victims in the Grand Coalition Cabinet in which Strauß was Finance Minister. In 1969, Hassel replaced Eugen Gerstenmaier as President of the Bundestag, serving until the SPD's victory in 1972 when he became CDU Vice-President of the Parliament, a post he filled until 1976. He would remain a CDU MP until 1980. Hassel would also represent Germany in the CoE Parliamentary Assembly from 1977 to 1981. The roll-call of core Academy members was brought to a close by Pons of the PEU and Sánchez Bella of CEDI. 
However, it is the Italian connections of the AESP that are the most fascinating. The former high-ranking P2 member Giancarlo Elia Valori attended both the Charlemagne Grand Dinner and the AESP Chapter Assembly; he would become a member of the AESP's organising core, the Permanent Delegation, the following year. His presence is particularly interesting in the light of the allegations concerning P7 - two of the Academy members allegedly involved in P7, Pons and Töttösy, were also at these meetings with Valori. Valori's attendance at Academy events from 1972 on also points to possible connections between the sniffer plane scandal and P2. Most of the key members in the sniffer plane negotiations were present at the 1976 Grand Dîner and Chapter Assembly with Valori: de Villegas, Father Dubois and Vallet. Vallet and de Villegas would join Valori on the AESP Permanent Delegation by 1977. At the time of these February 1976 AESP events, final agreements were being reached with Elf; the contract between de Villegas' Fisalma and Elf would be signed at the end of May, saving the Cercle Pinay complex from financial ruin, as described in the next chapter.
Valori and Lombardo already provided the AESP with high-level contacts to P2 and the group involved in the 1974 Sogno coup. A new face at the February gathering strengthened the Academy's links to Italian politics and to the Sogno coup: former Minister Giovanni Malagodi, a participant with Pinay at the Bilderbergers' inaugural conference in May 1954; Malagodi later attended the Bilderberg conferences in 1957 (again with Pinay), in 1958 and in 1965 (269). Sogno had fought Communism during the war as a contact of the British secret service; in 1953, he was one of the founders of the Italian section of Paix et Liberté, the virulently anti-communist Vatican-backed propaganda group whose Belgian section was run by the Chevalier de Roover (270).
Both President of the Liberal International and President of the Italian Liberal Party PLI, Malagodi was an influential member of the PLI's Sogno faction in 1974 when Sogno, a future member of P2, was insisting that a coup of "liberal" inspiration was necessary to save Italy from Communism. The "liberal coup" that Sogno proposed was scheduled for August 1974 and included the capture of the Presidential Palace, the dissolution of Parliament and the nomination of a government of technocrats, but the plan was aborted shortly beforehand.
Despite the failure of their plan, the Sogno fraction continued to insist that the rise of Communism threatened the very basis of the Italian State. One month after the planned Sogno coup, in September 1974, Malagodi participated in the 7th Study Conference of the PLI's youth group along with fellow Bilderberger and PLI Senator Manlio Brosio, from 1964 to 1971 the Secretary-General of NATO who had previously served in de Gasperi’s first post-war coalition as Defence Minister responsible for the re-organisation of the Italian intelligence community and the establishment of SIFAR
(271)*. At the September 1974 conference, Brosio declared that only communism - and not fascism - presented an immediate danger to stability in Italy. The judicial inquiry into the Sogno coup was blocked in November 1974 by the death of the main witness, secret service Colonel Giuseppe Condo. Condo, aged 42, died of a "heart attack" a week before magistrates were due to question him. Sogno and one of his coconspirators were arrested on charges of attempting a coup d'état in 1976, but this second inquiry failed to get to the bottom of the coup plans because of the State secrecy imposed on documents showing foreign support for Sogno's plans (272).
===Cash Crisis and the Sniffer Planes===
In the midst of such international networking, the Cercle Pinay went through a severe financial crisis. The main source of funding for the Cercle had been Carlo Pesenti, who had also financed the launch of de Villegas' sniffer plane project. However, following the 1972 acquisition of a one-third stake in Italcementi by P2 financier Michele Sindona, Pesenti was forced to borrow from his own banks to hold off the threat of a take-over. Pesenti's straitened finances obliged him to make drastic cuts in his funding of Violet. Pesenti was ultimately able to beat back Sindona's offensive with the help of Philippe de Weck, Director of UBS Zürich and administrator of de Villegas' sniffer plane company Fisalma, but his assistance triggered an investigation by the Bank of Italy: "the inspectors went through the books of the banks of Pesenti, exposing the dubious means by which he had extricated himself from Sindona's grip" (273).
This was not the first time Pesenti had been raided by Sindona; Sindona's 1968 attempt to take over Pesenti's empire permanently weakened Pesenti's finances. Obliged to borrow money from his own three banks to buy Sindona out, Pesenti was later forced to sell off those banks one by one to settle his debts, as well as selling the lossmaking Lancia car company to the Fiat Group in 1969. Pesenti also shored up his indebted Italmobiliare group by substantial borrowings from Banco Ambrosiano and its various Italian offshoots, secured by large blocks of shares in companies controlled by Pesenti. Another of Pesenti's suspect dealings later to be investigated was "a curious 50 billion lire loan granted to Pesenti in 1972 - apparently by the IOR - and indexed to the Swiss franc. The latter's appreciation meant that the sum eventually reimbursed was 185 billion lire. A decade after that loan was signed, magistrates in Milan were still unsure whether the Vatican Bank had excogitated a brilliant deal, or whether it had acted as a 'fiduciary' once more, this time for an irregular capital export by Pesenti" (274). Pesenti used the loan capital to buy shares from Roberto Calvi, head of the Banco Ambrosiano, but kept the loan off Italmobiliare's books until 1979 when it fell due. This led some Italmobiliare shareholders to challenge the very existence of the loan, believing that Pesenti was under pressure to pay the vast sum to IOR for other unspecified reasons. The case wound up in court but was not resolved before Pesenti's death in September 1984
(275)*.
Following Sindona's attack on Pesenti's financial empire and Pesenti's reduction of funds to the Cercle, the Cercle went through a disastrous cash crisis, above all in the light of the ambitious scope of its operations. Violet's cassette message to Damman of 31st March 1976 was so serious that, despite specific instructions to the contrary, Damman transcribed it in full: 
:"Considerable financial difficulties mainly due to the storm on the lira. The situation that has arisen has led to people cancelling their contributions, having to submit to a fait accompli.
:Closure of the Centre du Monde Moderne and probably of the Bulletin de Paris. 
:With these limited means, the keystone to any action is money. I will devote myself to setting up structures of financial groups so as to essentially develop the Academy and all that revolves around it, as well as the London group [the ISC], and set up Edicercle on a serious basis, and launch the Bible-prisoners operation on that basis [...] we will ensure the vital minimum for the Academy which is a priority" (276)*.
On the 16th April, Damman received another cassette from Violet, which this time he only partially transcribed: "Search for backers in progress. Meeting in Paris end of May/beginning of June" (277). The timing and the mention of backers allows us to make an almost certain connection to the negotiations taking place between Elf, the French state oil company, and Fisalma, the sniffer plane company set up by de Villegas, represented by de Weck of UBS and assisted by Violet. Elf had been testing the sniffer planes for some time and was now interested in acquiring exclusive rights over the invention. At the meetings with Elf, de Villegas was accompanied by the "inner circle" of Pinay members: not only Violet, but also Pinay himself and Father Dubois frequently participated. The contract between Elf and Fisalma was signed on 29th May 1976, and the meeting between Valéry Giscard d'Estaing, Elf President Pierre Guillaumat, and Pinay, representing Violet, was held on 2nd June.
For exclusive rights over the invention for a period of one year, Elf undertook to make four quarterly payments of 50 million Swiss francs to Fisalma, the first scheduled for the 15th June, the second for 15th October. The Cercle's financial situation dramatically improved after the key discussion between Pinay and the French President. On 8th October, Violet sent another cassette to Damman, this time much more optimistic about funding for the AESP: "Good perspectives for 1977. The President [Antoine Pinay] and a group of friends. Essential resources. Modifications to means". Damman replied to the good news from Violet on 13th October: "I was very happy to receive your cassette message guaranteeing funding for the Academy for 1977 [...] my warmest thanks for the essential minimum you have provided us with, we will do the rest" (278).
===The Foreign Affairs Research Institute===
Shortly after attending the Academy's Grand Dinner and Chapter Assembly in Brussels in February 1976, Brian Crozier would launch a regrouping of British Cercle friends, the Foreign Affairs Research Institute (279). The new geopolitical institute brought together under one roof the disinformation assets of the ISC and top Conservative politicians in the Thatcherite NAFF and SIF who had worked with BOSS to oppose demonstrations against sporting links with South Africa. FARI appears to have been the British-based counterpart to the Centre d'Etudes du Monde Moderne, the Cercle's Parisian pro-Pretoria outfit. As had been the case with the Centre du Monde Moderne, it was the South Africans who footed the bill for FARI, providing £85,000 a year for several years; South Africa continued to finance FARI until at least 1981 (280). Funding for FARI was reportedly also forthcoming from the Lockheed and General Dynamics corporations.
In terms of personalities, FARI represented a coming together of Crozier's NAFF and ISC with Stewart-Smith's Foreign Affairs Circle and Foreign Affairs Publishing Company; FARI continued publication of Stewart-Smith's previous fortnightly bulletin East-West Digest, distributed free to all British MPs, and cooperation with the FAPC's foreign associates, notably Interdoc and Dr. Peter Sager's Swiss SOI (281).
The President of FARI was veteran Bilderberger Sir Frederic Bennett, a member of SIF and NAFF. The FARI Director was Geoffrey Stewart-Smith; the Deputy Director was Ian Greig, co-founder of the Monday Club, Chairman of its Subversion Committee and probable contact of Damman's since 1973. On the Council of FARI we find the inseparable duo of Crozier and Moss of the ISC, NAFF and Shield, who brought along Air Vice-Marshal Stewart Menaul, an ISC Council member who would become a FARI mainstay. Having served as Senior Air Staff Officer, HQ Bomber Command from 1961 to 1965, Menaul would go on to become the Commandant of the Joint Services Staff College and Director General of the influential thinktank, the Royal United Services Institute (RUSI), from 1968 to 1976 – a critical timespan in British politics. Besides joining the ISC Council, Menaul had also provided the ISC with their first registered address in the premises of the RUSI. Another member of the FARI Council alongside the ISC team of Crozier, Moss and Menaul was Michael Ivens of Aims, SIF and NAFF.
The political support FARI enjoyed is illustrated by the Council membership of four top Conservatives whom we have met before – Thatcher's leadership campaign manager and Shadow Minister for Northern Ireland Airey Neave, his deputy John Biggs-Davison of SIF, NAFF and at this time Chairman of the Monday Club, Julian Amery and Lord Chalfont. Another member of the FARI Council was Colonel Ronnie Waring, lecturer in counter-insurgency at the Royal Defence College and an associate of G. K. Young's within Unison (282)*. 
Major propaganda themes for FARI were to be the West's dependence on strategic minerals from South Africa and the country's significance for defence of the Cape oil route in the face of rising Soviet naval power in the Indian Ocean and Soviet encroachment in Mozambique, Angola and Namibia. In June 1976, Peter Janke visited Swaziland to speak at a mining conference organised by a South African Department of Information front group, the Foreign Affairs Association. At the conference, "Janke of the Institute of the Study of Conflict in London stressed the importance of South Africa's minerals to the West and dangers of the Soviet threat"; on his return to London, Janke prepared an edited version of the conference speeches for distribution to "persons of influence", published by FARI as The West cannot survive without minerals from Southern Africa (283). The same theme was echoed by Grau's Frankfurt Study Group, which published a brochure called Südafrikas
strategische Bedeutung für die Rohstoffversorgung des Westens [South Africa's Strategic Significance for the West's Supply of Commodities], stating: 
:"The cutting-off of contacts between South Africa and the industrialised countries of the West as the result of a Soviet Navy blockade or as a result of the fall of the current South African government and its replacement by a Communist or Communist-influenced government would leave the West entirely defenceless" (284).
Working in partnership with FARI, the ISC continued their campaign in favour of South Africa with a total ISC budget for 1976 of over £30,000. July 1976 saw the publication of a Conflict Study by Janke, Southern Africa: New Horizons, followed in November by another Conflict Study, Soviet Strategic Penetration of Africa by David Rees. A further project to support South Africa in 1976 was The Angolan File, a South African television "documentary" which attacked the Americans for pulling out of Angola. The programme, broadcast on South African television, had been produced by the South African Directorate of Military Intelligence (DMI), who had commissioned Crozier of ISC/FARI to write the script (285).
Besides its defence of apartheid, FARI was also active in domestic politics in the UK, one of the major propaganda themes being the laxity of the Labour government in dealing with a "Soviet-dominated" IRA. On three occasions between August and September 1976, the two Conservative spokesmen for Northern Ireland, Neave and Biggs-Davison, both FARI Council members, used IRD disinformation to attack the "failure" of the Labour government to combat the "Czech and Cuban agents stoking revolution in Northern Ireland". The source of this disinformation was Colin Wallace of the Information Policy Unit in Northern Ireland. In 1974-75, Infpol was being pressured by MI5, rival to MI6 for control of the province, to go beyond black propaganda against the IRA and to turn its disinformation capability to the themes of KGB penetration of the Labour Party and Soviet manipulation of the IRA. 
As mentioned above, in 1974 Wallace was tasked by MI5 to produce defamatory documents for press release on the basis of smears and analyses of political, sexual and financial vulnerabilities of several dozen Westminster MPs. When Wallace refused to participate in this operation codenamed Clockwork Orange 2 without guarantees of ministerial approval, MI5 arranged for his removal from the
province and his dismissal from the Civil Service, a fate that befell other actors in the secret war who would not toe the MI5 line. With a broken career behind him, Wallace did not refuse when in 1976 Neave, Shadow Minister for Northern Ireland, proposed that Wallace work for him as a consultant. Part of Wallace's work consisted in providing the Neave-Biggs-Davison team with the information that Wallace had collated on Soviet subversion in Northern Ireland. Wallace has given the Press a letter addressed to him from Neave, written in August 1976, in which Neave asked specifically for a report that Wallace had prepared for Infpol, Ulster - a State of Subversion. This document of Wallace's was based on a unattributable IRD Press briefing called Soviets Increase Control Over British Communists. Neave then recycled the report's main allegations of Soviet subversion in Northern Ireland and KGB penetration of the Parliamentary Labour Party in a speech given in August. A few days later, FARI published a brochure written by Neave's deputy Biggs-Davison entitled The strategic implications for the West of the international links of the IRA in Ireland. The brochure was also based on the unattributable IRD briefing and made the same references to the alleged laxity of the Labour government in dealing with Soviet subversion in Northern Ireland. Neave would repeat the allegations in a second speech on 11th September, and the same theme of Soviet manipulation of the IRA would be featured in a Conservative Party Position Paper on Northern Ireland published later the same month (286).
===The Madrid meeting===
Two months later, from the 25th to the 28th November 1976, CEDI held its XXV International Congress in Madrid, a second international gathering of Cercle contacts after the February Chapter Assembly of the AESP described above. The Madrid meeting brought together most of the major characters we have met so far. Presiding over the Congress was Archduke Otto von Habsburg, assisted by two familiar faces: Alfredo Sánchez Bella and Hans-Joachim von Merkatz. The conference participants came from all over the world, showing the kind of international outreach CEDI and the Cercle enjoyed; besides more than one hundred Spanish delegates, some 120 foreign guests from Europe, America and South Africa gathered in Madrid.
Despite such broad participation, the 1976 CEDI Congress was for the first time given scant mention by the Spanish media in contrast to the lavish coverage of earlier years; a mere ten lines in one newspaper briefly announced the Congress and its speakers "Brian Crozier, Arvid Fredborg, Fourie, Gomez Hurtado and Otto von Habsburg" (287). This reticence was no doubt due to the sensitive political climate in Spain in late 1976 at a time when the Cercle's trio of former Franco ministers had just launched their Alianza Popular coalition; the fawning exposure previously given to CEDI under Franco could now compromise their electoral chances. Fortunately, despite this dearth of reporting, both the full list of participants and the programme of the 1976 CEDI Congress have been published, and give unprecedented insight into the complex's international contacts.
Of the groups previously mentioned, the CEDI Congress brought together the Cercle, the AESP/MAUE and PIO from Belgium, Le Monde Moderne from France, the ISC, Shield and FARI from Britain, the USCISC from the US, the major Portuguese figurehead for a right-wing coup against the government elected in April, election candidates from Spain supported by the Cercle, and senior South African diplomats -
a true reunion of the international Right and their friends with intelligence links. 
From Belgium came the Secretary-General of both CEDI and MAUE Vincent van den Bosch and his colleagues within the core of AESP/MAUE organisers: Florimond Damman, Damman's deputy and later whistle-blower Aldo-Michel Mungo, CEPIC President Paul Vankerkhoven, Jacques Jonet and MAUE Deputy Secretary General Jean-Paul R. Preumont. The most significant new face from Belgium attending a CEDI Congress for the first time - according to the documents at our disposal - was Baron Benoît de Bonvoisin, who, as at the February AESP Chapter Assembly, was accompanied by Major Bougerol, described in the participants' list as Head of the Public Information Office of the Army General Staff. At this time of course, PIO was in full swing; Bougerol had just completed his European tour, visiting AESP contacts and gathering experience in counter-subversion for use in PIO's Belgian operations. Bougerol's visit to Madrid was sensitive - in his 1978 letter to Bougerol warning him of the growing hostility in official circles to PIO's wideranging missions, Commissioner Fagnart of the Belgian military security service specifically mentioned the dangers of a leak concerning four dubious operations: the "Saud affair" and Bougerol's visits to Formosa, the UK and Spain.
Bougerol came to the Madrid Congress in the company of CEPIC Senator Angèle Verdin and CEPIC Board member Bernard Mercier; the latter had also attended the February Chapter Assembly. Along with fellow CEPIC members Vankerkhoven and de Bonvoisin, Mercier would also be implicated in the funding of the fascist NEM Clubs and the Front de la Jeunesse in the 1980s. Before arriving in Madrid, Bougerol, Mercier and Verdin had stopped off to pay their respects at the grave of the recently-deceased Caudillo Franco; Mercier wore a black shirt for the occasion.
A final important member of the Belgian delegation was Ernest Töttösy, the Hungarian WACL leader who, as we will see later, would be accused of being a member of P7, a covert CIA funding channel for Gelli's P2 lodge. Also present at the CEDI Congress was another alleged member of P7, the PEU International Secretary-General, Vittorio Pons from Lausanne. Pons was already increasing contact with the ISC at this stage: in September 1977, the ISC would publish a Conflict Study written by Pons, The Long-term Strategy of Italy's Communists.
Ten Britons attended the CEDI Congress, four of whom were members of the Cercle Pinay itself. The first three were the key FARI Board members Crozier, Moss and Amery, who was accompanied by his former colleague in SOE's Albanian operations, Lord St Oswald (288)*. FARI had cause for celebration: the countersubversion lobby's campaign against Harold Wilson had finally borne fruit in mid-March that year, when Wilson tendered his resignation and was succeeded by James Callaghan.
The CEDI Congress also offered Crozier and Moss a second opportunity that year to meet the PIO team of Bougerol and de Bonvoisin. Bougerol had visited the UK earlier in the year and most probably also met Crozier and Moss then; if so, Commissioner Fagnart's 1978 warning to Bougerol about "the affair concerning the UK" is intriguing. Whatever the truth about possible FARI/PIO collaboration, Moss could reminisce with de Bonvoisin and Bougerol about a common friend, Arnaud de Borchgrave, who by 1976 was a prized PIO contact on the staff of Newsweek. Bougerol was no doubt keen to add Moss to his PIO Press list; as editor of the Economist Foreign Report, Moss would be a powerful relay for PIO's output.
Apart from Crozier, Moss and Amery, the fourth British Cercle member to attend the CEDI Congress was banker Sir Peter Tennant who, as Crozier records, would share the chairmanship of Cercle meetings with himself, Amery and Pesenti (289). Tennant had been one of the earliest members of SOE, recruited in 1940 by Sir Charles Hambro, a later head of SOE in 1942-43. Tennant worked for SOE under the cover of Press Attaché at the British Embassy in Stockholm during the war before being sent as an Information Counsellor to the British Embassy in Paris from 1945 to 1950, where he probably had contacts with Antoine Pinay, soon to become French Premier. Tennant then served as Deputy Commandant of the British Sector in Berlin from 1950 to 1952 before occupying various senior posts in the Federation and later Confederation of British Industry, acting as Director-General of the British National Export Council from 1965 to 1971. At the time of this 1976 CEDI Congress, Tennant was President of the London Chamber of Commerce and Industry and a longstanding advisor to Barclays' bank (290)*.
Besides Amery, two other Conservative MPs from the Monday Club attended the 1976 CEDI Congress. The first was Sir Peter Agnew, who sat in Parliament continuously from 1931 to 1966 (except for 1950-55) before rising to serve as Conservative Party Secretary in 1975. Agnew had attended CEDI Congresses since at least 1960 and had sat on CEDI's Steering Committee since at least 1972; this
Congress would be his last of his two-year mandate as CEDI International President. 
The second Monday Clubber was Sir John Rodgers, an MP from 1950 to 1979 and a CEDI regular since at least 1963, serving as CEDI International President from 1965-67 and sitting as ex officio CEDI Vice-President since 1974. The leader of the British Conservatives in the Council of Europe, Rodgers had recently been involved in supporting one of the Cercle's three post-Franco election candidates, Federico Silva Muñoz, attending Silva Muñoz's UDE National Assembly in February 1976. After the three former Franco ministers joined forces in October 1976 within the Alianza Popular coalition, Rodgers would attend its Constituent Congress held in March 1977. Within the UK, Rodgers had been President of SIF from 1970 on alongside National Executive members Biggs-Davison, Bennett and G. K. Young. At the time of this November 1976 Congress, Rodgers was the Vice-President of the General Affairs Committee of the Western European Union; the Committee's rapporteur was Bennett, the President of FARI who was working closely with Young as parliamentary coordinator of Unison. Rodgers and his fellow Congress participant Agnew would join Biggs-Davison as AESP Life Members by 1977.
From France came the Cercle core: Antoine Pinay himself, accompanied by Violet, Vallet and Father Dubois. Also attending was René-Louis Picard, whom we have previously met as President of the International Society of Wilton Park. A Swiss section of Wilton Park had been set up earlier in 1976 and an Italian branch would be founded the following year. In 1978, Picard would join with three of the other 1976 CEDI Congress participants - Violet, Sánchez Bella and Jacques Jonet - to set up CLEW, the European Liaison Committee of Associations and Friends of Wilton Park.
The editorial team of the Monde Moderne, Jean Vigneau and Jacques Leguèbe, were also present at the 1976 CEDI Congress, giving the South African-backed propaganda outfit another opportunity that year to confer with their British sister organisation FARI, represented by the three FARI Board members Crozier, Moss and Amery. As we have seen, the Monde Moderne team had already met Crozier earlier at the beginning of 1976 at the AESP's Charlemagne Grand Dinner and Chapter Assembly when the PIO duo of de Bonvoisin and Bougerol were also in attendance. At the November Congress, not only could the Monde Moderne team and the FARI group compare notes, they could also talk directly to their South African paymasters: the most prominent diplomatic representatives at the CEDI Congress were none other than the South African Secretary of Foreign Affairs Brand Fourie, and South African Ambassador to France Mr. Hating, who had taken over Cercle - Pretoria coordination after the departure of Mr. Burger, his predecessor.
A final and eminent member of the French delegation was the French-born American Ridgway B. Knight, by then the Paris-based Director of International Relations of the Chase Manhattan Bank and David Rockefeller's principal advisor on European affairs. The CEDI participants' list did not however detail Knight's extensive previous career as an American diplomat. Having spent four years from 1946 onwards as Special Assistant to the US Ambassador in Paris with responsibility for liaising with the French political parties, Knight returned to Washington in 1950 to handle Western European affairs, NATO and the budding European movement at the State Department. From 1955 to 1957, he was the political advisor to the NATO Supreme Allied Commander Europe, first to General Gruenther (a contact of Violet's) and then to Gruenther's successor, General Norstad.
After a posting as Ambassador to Syria from 1962 to 1965, Knight served as American Ambassador to Belgium from June 1965 to April 1969, when he had to contend with France's ejection of NATO headquarters and its resettlement in Belgium in 1966-67. Knight's tour of duty in Brussels also encompassed the December 1967 creation of the Belgian section of LIL by Vankerkhoven, Damman and their
associates; throughout 1968, they were preparing the launch of the AESP in January 1969 and the Cercle des Nations in April 1969, events that Knight must have followed, bearing in mind the considerable political and diplomatic support they enjoyed. Knight's diplomatic career then concluded with another significant posting as Nixon's Ambassador to Portugal from July 1969 to February 1973 with a particular focus on the situations in Angola and Mozambique – as we will see below, the Portuguese participants at this CEDI Congress included the former Commander-in-Chief of Portuguese Forces in Mozambique and the leader of the Portuguese colonists in that country, key figureheads for a potential right-wing coup against the minority Socialist government elected in April 1976.
The Cercle's representation would, of course, not have been complete without the core members from Germany. We have already noted the presence of Otto von Habsburg and Hans-Joachim von Merkatz as Chairmen of the Congress; also attending was Strauß's right-hand man in the Cercle, Count Hans Huyn. The 1976 Congress therefore again brought together the Cercle's operational triumvirate - Violet, Crozier and Huyn.
Another future "leading German member of the Cercle" at the 1976 CEDI Congress was Franz Josef Bach. A qualified engineer, Bach later studied political science at the University of Virginia in 1949 before attending the German Diplomatic Service school in 1950-51, being posted to Sydney from 1951 to 1954 and to Washington from 1954 to 1957. After returning to Germany, he would fill the posts of Head of Foreign Office Affairs in the Chancellor's Office in 1957 and ministerial advisor in 1958 before running Adenauer's private office from 1959 to 1961. Returning to foreign duty, Bach would serve as General Consul in Hong Kong until 1964 when he was posted to Teheran as German Ambassador until 1968. Between 1969 and 1972, Bach then represented Aachen – Charlemagne's city - as a CDU MP in the Bundestag. In 1975, Bach had been interviewed by Senator Church's committee investigating bribes paid by aviation manufacturer Northrop. By the late 1970s, Bach would work closely with Crozier in taking over the practical organisation of Cercle meetings from Jean Violet (291)*. 
Three other Germans of note attended the 1976 CEDI Congress. The most prominent was Dr. Richard Jaeger, a member of Hitler's SA from 1933 on (292)*. After the war, Jaeger sat as a CSU MP in the Bundestag from 1949 to 1980, serving as Chairman of the Parliamentary Defence Committee from 1953 to 1961 (Strauß was Defence Minister from 1956 to 1962) and Vice-President of the Bundestag continuously from 1953 to 1976 apart from a brief post as Justice Minister from 1965 to 1966. Jaeger also provided access to the Council of Europe, sitting in the CoE Parliamentary Assembly from 1958 to 1966. As for CEDI, Jaeger had been a member since at least 1959, acted as a co-founder of the revamped CEDI German section CEDI Deutschland in 1972 and served as CEDI President from 1972 to 1974. From 1957 until 1990, he was President of the German Atlantic Association. Another top CSU politician at the CEDI Congress was Dr. Fritz Pirkl, Bavarian Secretary of State for Labour from 1964 to 1966, then Bavarian Labour Minister until 1984; Pirkl also occupied the key position of Chairman of the CSU's Hanns-Seidel-Stiftung from its creation in 1967 until his death in 1993. The third German was Major-General Heinz Hükelheim from Cologne who had an interesting early connection with the Belgian Gladio network; as a colonel in the German military security service, the Militärischer Abschirmdienst (MAD), in the 1950s, Hükelheim had been the German partner of André Moyen in his clandestine campaigns against Communism (293)*.
Another German-speaking participant of note at the 1976 CEDI Congress was Alfons Tomicic-Dalma, Director of News and Information for Austrian radio and television (ÖRF), who had attended CEDI Congresses since at least 1955 (when he was Chief Editor of the Münchner Merkur) and who had represented Austria on CEDI's International Council since at least 1972. Dalma may have discussed the Washington ISC with Schmidt at the CEDI Congress. Dalma had met two USCISC members one month after the USCISC's foundation in March 1975, when he attended the April 1975 Bilderberg conference in Cesme, Turkey, with George Ball and Zbigniew Brzezinski of the USCISC, Sir Frederic Bennett of NAFF and future President of FARI, and two Cercle beneficiaries, Franz Josef Strauß and Margaret
Thatcher.
The Italian participants at the CEDI Congress were characterised by their links to the world of Catholic high finance. One Italian Congress participant we've already met before was Carlo Pesenti of Italcementi and Italmobiliare, financer of Stefano Delle Chiaie, the Cercle, the AESP and the sniffer plane project. Accompanying Pesenti at the CEDI Congress was another Catholic financier, Orazio Bagnasco. Both Pesenti and Bagnasco would later be central figures in the Banco Ambrosiano just before its collapse in 1982.
Amongst the hundred or so participants from Spain were three Cercle contacts. CEDI founder Alfredo Sánchez Bella was one of the co-chairs for the Congress; also attending was one of the Cercle-sponsored candidates in the Spanish elections, Cruz Martínez Esteruelas, President of the Unión Democrática del Pueblo Español, which had just joined Fraga Iribarne's Alianza Popular. The CEDI Congress was an opportunity for Martínez Esteruelas to meet Franz Josef Strauß's foreign policy representative, Hans Huyn; over the next twelve months, Strauß would channel some DM 100,000 to Martínez Esteruelas for his election campaigns. 
Besides this German-Spanish axis, the French Monde Moderne team of Vigneau and Leguèbe also met an old friend, Colonel Juan Manuel Sancho Sofranis, a Spanish military representative at the 1974 Paris launch of the Centre d'Etudes du Monde Moderne.
The two Portuguese representatives attending the CEDI Congress had been central figures in Portugal's colonial wars, the first of whom was Brigadier-General Kaúlza de Arriaga. As the Commander-in-Chief of Portuguese Forces in Mozambique from 1969 to 1974, Arriaga had conducted Operation Gordian Knot in 1970, the most extensive counter-insurgency campaign ever undertaken in Portuguese Africa. During his spell in Mozambique, Arriaga had liaised closely with the second Portuguese participant at this 1976 CEDI Congress, millionaire and "former king of the Portuguese colonists" Jorge Jardim.
Jardim was the secret backer and leader of the Uniao Nacional Africana de Rombezia (UNAR), a splinter group from FRELIMO whose goal was to set up a buffer state between Tanzania and Zambese to block FRELIMO's advance - Jardim would be closely linked to the 1969 assassination of FRELIMO's founder and first leader Eduardo Mondlane, killed by a parcel bomb. Together with leading counterinsurgency expert Captain Alpoim Calvao, later one of the commanders of the Aginter Presse/Spínola underground army ELP, Jardim had set up the Flechas in Mozambique, a "counter-gang" of black mercenaries under white leadership who operated from Jardim's estates on the Mozambique/Malawi border. After Machel's victory in Mozambique in June 1975, Jardim fled to Gabon and became a major source of finance for RENAMO, the Mozambican counter-revolutionary guerrilla force set up by the Rhodesian Central Intelligence Organisation. Besides his African operations, Jardim was also active on an international level to support Spínola's plans for a coup in Portugal, attending the SDECE's Sheraton Hotel conference for the putschists in September 1975. After Spínola's preparations for a coup were exposed just before the April 1976 elections, Jardim switched support to Arriaga who was now a key rallying point for the Right in Portugal.
Having been imprisoned in September 1974 for his involvement in a planned coup, Arriaga was released in January 1976, regrouping his supporters within the far-right Movimento Independente para a Reconstruçao Nacional (MIRN) and campaigning throughout Portugal against the minority Socialist government under Prime Minister Soares. This led the American Ambassador in Lisbon, Frank Carlucci
(later to become Deputy Director of the CIA under Carter and National Security Advisor and Secretary of Defense under Reagan), to send a now declassified State Department cable 1977LISBON01147 on 10th February 1977:
:"Kaulza is far rightist disguised as democrat. Caetano used to refer to Kaulza as the danger on the Right. Although he has no significant current backing in military, Kaulza is dangerous. He has the potential for catalyzing public support."
Such support for Arriaga was considerably boosted a year after this CEDI Congress when Arriaga visited the United States in November 1977, claiming to have met Henry Kissinger and Zbigniew Brzezinski, which, if true, implied high-level backing for his virulent campaign against the Portuguese government. Carlucci nervously sent cable 1977LISBON08893 of 18th November 1977: 
:"Ultra-rightist General Kaulza de Arriaga held press conference on his return from US in which he claimed he lunched with Henry Kissinger and dined with NSC Director Zbigniew Brzezinski. Given the tension here at the moment, the concern over possible right wing coups, and the widespread belief that Kaulza is one of the potential coup plotters, Embassy expects to receive a number of questions on the alleged lunch and dinner. Request ASAP any information Department can provide. Carlucci."
Secretary of State Cyrus Vance responded the next day in priority cable 1977STATE277883, calming the concerns expressed which allowed Carlucci to then reassure Soares on 28th November as reported in cable 1977LISBON09146. Of greater interest however is the private information ("FYI") that Vance had given Carlucci in his priority cable 1977STATE277883 which reads in full:
:"1. About 30 guests attended each of the affairs mentioned by Arriaga (reftel). They were part of November 10-13 meetings of European and American businessmen and politicians. Arriaga was accompanied by his aide Costa da Noruega. NSC Director Brzezinski was present at a November 12 dinner and former Secretary of State Kissinger attended a luncheon, but neither held private discussions with Arriaga.
:2. FYI: other participants included Antoine Pinay, France; Franz Josef Strauss, Germany; David Rockefeller, US; Alfredo Sanchez Beya [sic], Spain; and senior Italian industrialists. The group has no formal name and does not seek wide press coverage, but it is occasionally called the Pinay Group or the Cercle Violet, the latter derived from the name of a French lawyer instrumental in forming the group 20 years ago. The meetings began as discussions of international issues by European Christian Democrats. End FYI Vance" (294). 
Besides the Cercle's European contacts, the 1976 CEDI Congress also brought together several of their transatlantic allies; we have already met Rockefeller's representative, Ridgway B. Knight. Two other recently retired American Ambassadors also attended the Congress, the first of whom was the OSS veteran, NATO diplomat and Cercle member Adolph W. Schmidt who had served as Ambassador to Canada from September 1969 to January 1974. In March 1975, eighteen months before this CEDI Congress, Schmidt had joined the US Committee of the ISC which then set up Crozier's American offshoot, the Washington ISC. The same year, Schmidt had become a member of the Advisory Council of the NSIC, serving until at least 1985.
The second recently retired American Ambassador was Henry J. Tasca whose career had started at the US Embassy in Rome during the 1948 election campaign, later serving as Ambassador to Morocco in 1965-69. It was however his second ambassadorial posting that would prove the most controversial – from January 1970 onwards, Tasca was Nixon's Ambassador in Athens during the junta of the Greek
Colonels. His period of service encompassed the November 1973 overthrow of junta leader (and possible 1960s CEDI contact) Georgios Papadopoulos by his hardline deputy Dimitrios Ioannidis, Ioannidis's July 1974 coup against Cypriot President Archbishop Makarios, the swift Turkish invasion of the island and the subsequent fall of the Greek junta later that month. Tasca, known for his close links to the military junta, would not long survive it; his withdrawal as American Ambassador to Greece was announced in mid-August 1974. In 1976, Tasca gave secret sworn testimony to the House Intelligence Committee that the Greek KYP intelligence service had channelled funds to Nixon's election campaign in 1968. Tasca would die in a car accident in 1979.
Another American participant of note at the 1976 CEDI Congress was Crosby M. Kelly, a Cercle member from at least 1970 on and the public relations expert for the American aviation industry originally intended as a source of seed capital for the sniffer plane project. In January 1976, Kelly had been appointed Vice-President for Communications at Rockwell International, a major defence contractor and developer of the B-1A Lancer strategic nuclear bomber whose cancellation was promised by Jimmy Carter during the 1976 federal election campaign. Kelly would run into controversy one month after this CEDI Congress when he gave a press interview to the Pittsburgh Post-Gazette alleging that opponents of the B-1A programme were funded by the Soviet Union. When pressed for details, "Kelly offered no specific documentation for Soviet activity in the B1 controversy, but he said the Institute for the Study of Conflict in London supports his thesis in general". An action for libel against Rockwell and Kelly would be upheld before being finally dismissed by the Supreme Court of Pennsylvania in December 1981 (295).
A final American participant was Charles T. Mayer of the Foreign Policy Discussion Group, a group about which little is known. The FPDG must however have continued contact with the Cercle complex, as Mayer would later be invited to attend a 1989 Cercle meeting with Pinay, Amery, Crozier and Huyn, all present at the 1976 CEDI Congress.
This CEDI Congress allows us to draw certain conclusions about the Cercle's operations. In 1976, there would be two opportunities for the main Cercle propagandists to meet; the ISC/FARI team, the Monde Moderne staff and the PIO duo of de Bonvoisin and Bougerol would all meet at both the AESP Chapter Assembly in February and the CEDI Congress in November at a critical time for their respective operations. Without being able to deduce any indication of mutual assistance, these meetings do indicate the close communication between the national groups that made up the Cercle complex. The few internal documents from the ISC, the AESP, the ISP and CEDI that are available can only afford a glimpse of their international networking. Despite the scarcity of documents from other years, there can be no doubt that this coalition of top right-wing politicians and covert operators held meetings several times a year throughout the 1970s. This glimpse in 1976, another in 1979-80 and a third in 1982-85 may be fragmentary, but they certainly show only the tip of the iceberg.
==Notes==
Category:Rogue Agents