Delivered to The Israel Lobby and American Policy 2018 conference March 2, 2018 at the National Press Club

The Israel Lobby and American Policy conference was solely sponsored by the American Educational Trust, publisher of the Washington Report on Middle East Affairs, and the Institute for Research: Middle Eastern Policy (IRmep). This is a rush transcript.

Delinda Hanley: We have the last panel and it’s going to be a really interesting one about American foreign policy. Jefferson Morley will speak first, and he’ll talk about the “CIA and Mossad: Tradeoffs in the Formation of the U.S.-Israel Strategic Relationship.”

Jefferson Morley is a veteran Washington investigative reporter and the author of The Ghost: The Secret Life of CIA Spymaster James Jesus Angleton which is flying off the shelves of our Middle East books and more bookshelves. He’ll be signing his books at 5:00. His latest must-read book sheds new light on Angleton’s close relationship with Israeli intelligence citing such cases as the Israel’s 1967 attack on the USS Liberty and the diversion of U.S. government-owned weapons-grade uranium from Apollo, PA to Israel in the ‘60s.

A native of Minneapolis, Morley attended Yale University and worked as an editor at The New Republic, The Nation, and Spin Magazine before joining the Washington Post in 1992 where he worked for 15 years. His reporting has appeared in The New York Review of Books, Reader’s Digest, The New York Times Book Review, Rolling Stone, the Los Angeles Times, The American Prospect, and Salon. You are going to want to buy his book after hearing his talk. Thank you. Welcome.

Jefferson Morley: Thank you, Delinda. Thank you all for coming. Thanks to Grant for inviting me. Thank you, Gideon, Noura, and Ali who I made friends with for the first time last night. Thank you for being my friends. This is my first time at this conference and everybody has made me feel very welcome. Thanks too to our live stream audience for paying attention. Please share this video on social media. You have your orders, push that thumbs up button early and often.

Since the publication last October of The Ghost, my biography of James Angleton, I’ve spoken to many people all over the country about this protean, unique, and some would say sinister character. But I don’t think I’ve ever spoken to a group this large, so thank you all for coming. If you do like this talk, I hope you will buy the book. In fact I’ve been told that it’s the iron law of this conference that if you like the book, you are obliged to purchase the book. So I’ll be signing here afterwards and you know what to do.

James Angleton’s story is a story for the ages, but it’s also a story of our time. I want to emphasize that in sketching a little bit about him personally, especially the very earliest days of the U.S.-Israeli relationship. When I started writing The Ghost in January 2015, the term the deep state was pretty much unknown publicly save to a handful of political scientists. When I finished the book two years later, in the spring of 2017, I was informed by an ABC News poll that 48 percent of Americans agreed that there is such a thing as the deep state which was defined as military or intelligence officials who secretly manipulate US policy. I realize that Angleton, who was a cold [war] warrior and a zealous defender of America’s leadership role in the postwar world, was also an avatar of this so-called deep state. I don’t mean that in a kind of conspiratorial or spooky way. I mean that in a very specific and concrete way.

Angleton embodied and shaped the CIA’s operational ethos and its internal procedures, especially in the realm of counterintelligence. His theories of Soviet penetration dominated the thinking of Western intelligence agencies, and their legacy can even be seen in the counterintelligence investigation into the Trump campaign and allegations of collusion with Russia. I want to emphasize that I only use the term deep state as a colloquial shorthand term for the array of US national security agencies that operate under the shroud of official secrecy.

Let’s not forget there are a dozen, at least a dozen such agencies based here in Washington. The CIA with its $15 billion a year budget is the largest. The NSA with a budget of about $10 billion is the second largest. The Defense Intelligence Agency is about $4 billion. Then along with some other obscure but still very large agencies like the NGIA. Never heard of the NGIA? I didn’t think so. The National Geospatial-Intelligence Agency is a $4.9 billion a year agency. Collectively, these agencies spend probably $50 billion to $60 billion a year, which make them a very small but powerful potent sector in the American scheme of power.

Want to know how the NGIA spent your $4.9 billion? Good luck. Want to see a line item budget of CIA activities in Africa last year? Move along. It’s true that Congress nominally has oversight powers over these agencies. Our elected officials do have their security clearances that we don’t have, so they can go in and look at selected operations. But the intelligence oversight system is very weak as even its defenders will admit. The intelligence committees polarized and politicized can’t even agree on what kind of secret activities they’re supposed to monitor. The FISA court system is supposed to protect Americans from surveillance by their government, but it largely functions as a rubberstamp of the secret agencies. A secret government is the norm in America in 2018 which is why the discourse of the deep state has such currency today.

Angleton, I’m going to put to you, was a founding father of what we call the deep state. So who was he? Born in December 1917, James Angleton grew up as the oldest son of James Hugh Angleton, a brash self-made American businessman who moved to Milan, Italy during the Depression and made a fortune during the time Benito Mussolini selling cash registers. Angleton attended private school in England. He went to Yale College, and then to Harvard Law school. He was a precocious good-looking young man with sophisticated manners and a literary frame of mind.

As an undergraduate, he befriended his fellow expatriate – Ezra Pound – in Italy. Pound was the modernist poet in the mad tribune of Mussolini’s fascism. In their correspondence, which I found at Yale, Angleton sometimes ape the anti-Semitic rhetoric of Ezra Pound. For example, criticizing the Jewish book merchants who he thought overcharged for Pound’s books.

In 1943, Angleton was recruited into the Office of Strategic Services, America’s first foreign intelligence service stationed in Rome during and after World War II. He excelled at secret intelligence work. I tell a story in The Ghost of how he rescued a leading Nazi and a leading Italian fascist from postwar justice. Among other tasks, he reported on the flow of Jews escaping from Germany and heading for Palestine. The revelations of the Holocaust transformed his disdain for Jews into something of sympathy. He began to develop sources among the leaders of the Jewish and Zionist organizations – including Teddy Kollek who was a British intelligence agent, and a German operative named Arthur Pier who later became known as Asher Ben-Natan.

With the passage of the National Security Act in July 1947, Angleton went to work at the CIA. The CIA came into existence and Angleton became the chief of the foreign intelligence staff with responsibility for intelligence collection operations worldwide. In those days, the CIA was right here in the heart of Washington. It’s hard for people to believe now, but the CIA was located in a series of temporary buildings located along the reflecting pool next to the Lincoln Memorial. The tempos, as they were called by CIA people, were drafty in the winter, hot in the summer, and devoid of charm year-round. But this is where Angleton worked, at what was known as the Office of Special Operations.

Angleton, while sympathetic to Jewish suffering, was still very wary of Israel when he started his career at the CIA. Before the 1948 war, the Jewish army had been largely armed by Czech arms manufacturers and communist Czechoslovakia. The Soviet Union was the first country to recognize the state of Israel in 1948. Angleton initially feared that the Soviets would use Israel as a platform for injecting spies into the West. The Israelis, for their part, were looking to cultivate American friends. Stalin’s anti-Semitic purges in 1948 showed that his allegiance to the Jewish state was superficial at best.

In 1950 a man named Reuven Shiloah, the founder of Israel’s first intelligence organization, came to Washington. He visited the CIA and he came away very impressed with how it was organized. He went back to Israel and in April 1951, he created out of a very fractious collection of security forces what was known as the Institute for Intelligence and Special Tasks – inevitably known as Mossad, Hebrew for institute.

In 1951 Prime Minister David Ben-Gurion came to the United States and brought Shiloah with him. Ben-Gurion met privately with President Truman, and Angleton arrange for Ben-Gurion to also have lunch with his friend Allen Dulles who would shortly become the director of the CIA. The purpose of this meeting, Efrain Halevy, a retired director of the Mossad and a longtime friend of Angleton’s told me in an interview in Tel Aviv, the purpose was in Halevy’s words to clarify in no uncertain terms that notwithstanding what had happened between Israel and United States 1948 and notwithstanding that Russia had been a key factor in Israel’s survival, Israel considered itself part of the Western world and would maintain the relationship with the United States in this spirit.

Shiloah stayed on in Washington to work out the arrangements with Angleton. Shiloah, according to his biographer, soon developed a special relationship – quote/unquote – and Angleton became the CIA’s exclusive liaison with the Mossad in 1951. Angleton return the favor by traveling to Israel often. He was introduced to Amos Manor, chief of counterespionage for Israel’s domestic security service known as Shabak or Shin Bet.

Manor headed up Operation Balsam which was the Israeli’s conduit to the Americans. “They told me I had to collect information about the Soviet bloc and transmit it to them,” Manor recalled about the Americans. “I didn’t know exactly what to do, but I had the idea of giving them material we had gathered a year earlier about the efforts of the Eastern Bloc to use Israel to bypass an American trade embargo. We edited the material and informed them that they should never ask us to identify our sources.” From such arrangements, the CIA-Mossad relationship began to grow. Manor would be friends with Angleton for the rest of his life.

In 1963 a man named Isser Harel was succeeded as the chief of Mossad by a military intelligence officer named Meir Amit. Amit found Angleton to be a little eccentric, but he noted that his – quote – identification with Israel was a great asset for Israel. Asher Ben-Natan, Angleton’s source dating back to the OSS days, was playing a key procurement role in the secret Israeli program to obtain nuclear weapons. Teddy Kollek, one of Angleton’s closest contacts and friends in Washington, later became the mayor of Jerusalem. Angleton’s Israeli friends in short were really the architects, some of the architects of the Zionist state.

As I came to learn his story from talking to CIA veterans and Israelis and reading a lot, a couple of things stood out to me. First of all, the Israeli recruitment of Angleton was extremely astute. In the early 1950s, Angleton was a rising star at this new agency, the CIA, but he was not a senior figure and not even particularly powerful. The Israelis recognized the latent qualities that would make him powerful.

Second, Angleton’s creative intellect and his operational audacity inspired deep feelings of loyalty among the Israelis. While Angleton’s counterintelligence vision would become very controversial within and bitterly divisive within the CIA, he was widely admired in Israel as a stalwart friend. He still is to this day.

In 1954 Angleton became the chief of the CIA’s counterintelligence staff, the first one. In 1956 Amos Manor passed him a copy of Nikita Khrushchev’s secret speech to the Soviet Communist Party in which he criticized the cult of personality around the deceased dictator, Joseph Stalin. This intelligence coup made Angleton a legend within the CIA and the power within the agency as well, and it was very much made possible by the Israelis.

Angleton’s formative and sometimes decisive influence on US policy towards Israel can be seen in many areas – from the impotence of US nuclear nonproliferation policy in the region, to Israel’s triumph in the 1967 Six-Day War, to the feeble US response to the attack on the Liberty, to the intelligence failure represented by the Yom Kippur War of 1973. I tell a lot of the story in The Ghost, but the story of Angleton in Israel is really so large and so profound that it probably deserves its own book. I could certainly not do justice to it in the 18 minutes that I have, so I’m going to confine myself to one narrow question about the tradeoffs that became implicit in this arrangement between the CIA and the Mossad and its implications for us.

The question, which was put to me by Grant but is right on point, was why didn’t the CIA help the FBI investigate the diversion of US weapons-grade material from the United States to Israel in the 1960s and 1970s? The short answer is because Jim Angleton didn’t want to. Angleton played a key role in enabling Israel to obtain nuclear weapons, and he did so in a subtle way that characteristically left few fingerprints. He was not a man to investigate himself. Many of these details are now known thanks to Grant Smith, Roger Mattson, John Hadden, Jr. and others.

I want to just give you a sense of how this transpired. So the Nuclear Materials and Equipment Corporation, otherwise known as NUMEC, started processing highly-enriched uranium in the United States in 1959. NUMEC had been created by David Lowenthal, a Zionist financier who financed the postwar boatlift from Europe to Palestine that was romanticized in the book and movie Exodus. He hired Zalman Shapiro, a brilliant young metallurgist to run the company.

At that time, the US government owned all of supplies of nuclear fuel which private companies, like NUMEC, were allowed to use but ultimately had to return to the government. Within a few years the Atomic Energy Commission noticed worrisome signs that the Apollo Plant – NUMEC had a plant in Apollo, Pennsylvania – that the plant’s security and accounting were very deficient. Unexplained losses of nuclear material did happen at other companies, but NUMEC’s losses were proportionately much larger. By October 1965, the AEC estimated that 178 kilograms of highly-enriched uranium had gone missing from the NUMEC facility, by March 1968, that figure was 267 kilograms.

John Hadden was the CIA station chief in Israel from 1964 to 1967. He worked very closely with Angleton throughout this period. He would later concur with the near unanimous assessment of CIA’s nuclear scientist that Israel had indeed stolen fissile material from NUMEC and used it to build their nuclear arsenal. This story is now very well documented. In the spring of 1965, a technician working at the night shift at NUMEC went out on a loading dock for a breath of fresh air and saw an unusual sight. Zalman Shapiro was pacing on the dock while a foreman and truck driver loaded cylindrical storage containers, known as stovepipes, onto a flatbed truck.

The technician saw a clipboard saying that the material was destined for Israel. It was highly unusual to see Dr. Shapiro in the manufacturing section of the Apollo nuclear facility, the technician said. It was unusual to see Dr. Shapiro there at night, and it was very unusual to see Dr. Shapiro so nervous. The next day NUMEC’s personnel manager visited the technician and threatened to fire him if he did not keep his mouth shut, that’s a quote, concerning what he had seen. It would be 15 years before the employee told the story to the FBI.

What did Angleton know about NUMEC? Well, he knew that the AEC and the FBI were investigating starting in 1965. As the Israel desk officer of the CIA, he talked about the NUMEC case with liaison agent Sam Papich who was monitoring the investigation for the FBI. He also spoke about it with his colleague John Hadden.

On the crime scene particulars, Hadden defended his former boss. “Any suggestion that Angleton had help the Israelis with the NUMEC operation was totally without foundation,” he told journalists Andrew and Leslie Cockburn. But Hadden didn’t deny that Angleton had helped the Israeli nuclear program. Why would somebody whose whole life was dedicated to fighting communism have any interest in preventing a very anti-Communist nation for getting the means to defend itself, Hadden asked. The fact they stole it from us didn’t worry him in the least, he went on. I suspect that in his inmost heart he would have given it to them if they had asked. Hadden knew better than to investigate any further. I never sent anything to Angleton on this – the nuclear program – because I knew he wasn’t interested, Hadden later told his son, and I knew he’d try to stop it if I did.

With the fissile material diverted from NUMEC, Israel was able to construct its first nuclear weapon by 1967 and become a full-blown nuclear power by 1970 – the first and still the only nuclear power in the Middle East. Angleton, it is fair to say, thought collaboration with Israel was more important than US nonproliferation policy. He believed that the results proved his point. When he started as chief of the counterintelligence staff in 1954, the state of Israel and its leaders were regarded warily in Washington – especially at the State Department. When Angleton left government service 20 years later, Israel held twice as much territory as it had in 1948. The CIA and Mossad collaborated on a daily basis and the governments of the United States and Israel were strategic allies knit together by expansive intelligence sharing, multibillion-dollar arms contracts and coordinated diplomacy.

Angleton’s influence on U.S.-Israeli relations between 1951 and 1974 exceeded that of any Secretary of State with the possible exception of Henry Kissinger. His influence was largely unseen by Congress, the press, other democratic institutions, and much of the CIA itself. He was empowered by his own ingenuity and the clandestine arrangements rationalized by doctrines of national security and counterintelligence. The arc of his career breathes life into the concept of the deep state.

I thought of this story when I visited one of the memorials to Angleton in Israel in 2016. The memorial is located on a winding road outside the city of Mevaseret Zion, which is now really a suburb of Jerusalem. Historically, control of this high ground has been seen as key to the control of Jerusalem and of Palestine itself. A nearby ruins of a castle built by 12th-century Christian crusaders for exactly that purpose stands in mute testimony to the importance of its strategic location.

The Angleton memorial consists of a pedestal of stones topped with a black plaque. To James Angleton, a friend it says. This plaque was dedicated in 1987, a few months after Angleton died, and it has been maintained by his Israeli friends ever since. It’s still in perfect condition. The location is no accident. In the course of his extraordinary career, Angleton, more than any other American, enabled the Americans to gain and hold this strategic high ground in the Middle East. He was, as his friend Meir Amit said, the biggest Zionist of the lot. Thank you.