"Patman Attacks ‘Secret’ C.I.A. Link: Says Agency Gave Money to Private Group Acting as Its Sub Rosa ‘Conduit’" (New York Times, September 1, 1964)
WASHINGTON, Aug. 31 — Representative Wright Patman disclosed today that the Central Intelligence Agency had given money to a private foundation that, he said had served as a “secret conduit” for the agency.
The Texas Democrat quoted an unidentified official of the agency as having said that the intelligence agency had had an “arrangement” with the J.M. Kaplan Fund of New York City from 1959 until some time this year.
Mr. Patman’s disclosure at a public hearing of his House Small Business subcommittee was the source of some concern and embarrassment to Internal Revenue officials attending as witnesses.
Apparently, the intelligence agency’s involvement with the Kaplan Fund was a secret shared by only a few persons in official Washington.
Mitchell Rogovin, assistant to the Commissioner of Internal Revenue, said that until Aug. 10, the date of the last Patman subcommittee hearing on the subject, he was the only present employe of the service who knew of the C.I.A.-Kaplan relationship.
Even the New York District office of the Revenue Service, which is conducting the Kaplan investigation, was not aware of the relationship, Mr. Rogovin said.
When in 1967 Ramparts exposed the CIA’s role in the National Student Association and other groups, it cited Patman’s 1964 statement as an important early warning:
It is widely known that the CIA has a number of foundations which serve as direct fronts or as secret “conduits” that channel money from the CIA to preferred organizations. An intimation of the scope of this financial web was afforded the public on August 31, 1964, when Texas Congressman Wright Patman, in the course of an investigation into the use of foundations for tax dodges, announced that the J.M. Kaplan Fund of New York was serving as a secret conduit for CIA funds. As soon as Patman made his announcement, representatives of the CIA and Internal Revenue came scurrying to his office for a hasty conference. Patman apparently was satisfied with the results. Without retracting his allegations about the Kaplan Fund he announced: “… The CIA does not belong in this foundation investigation.”
Before bringing down the curtain of secrecy, he did, at least, reveal one fact of substance. It turned out that a number of other foundations had contributed to the Kaplan Fund during the crucial years of 1961-63 when the Fund had been serving the CIA. Five of these foundations were not even on the Internal Revenue Service’s list of tax-exempt foundations. They were the Borden Trust, the Price Fund, the Edsel Fund, the Beacon Fund and the Kentfield Fund. The implication was clear that some or all of these were the channel through which the CIA money passed into the Kaplan foundation coffers.
Ramparts was provided with an unusual insight into the manner in which the CIA uses legitimate foundations with liberal interests, such as the Kaplan Fund, in a recent conversation with the president of a prominent New England foundation who asked to remain anonymous: “I didn’t want my foundation dragged through the CIA mud.” In 1965 he was approached by what he described as “two nice middle-aged Irish cop types who flashed CIA cards at me.” The men asked the foundation president if they could look over the list of organizations that his foundation supports. He volunteered the list to them and after looking it over, the agents said that there were organizations on the list that they would also be willing to support. The CIA men explained, “We are trying to pose an alternative to communism and want to back third-force programs, which we could not do if it was known that this support comes from a government source.”
The agents then proposed to support some of the organizations already on the foundation’s list as well as suggesting new prospective recipients. The agents promised that if this arrangement was accepted, they would be able to channel CIA money into the foundation without it ever being traced back to the CIA. They said that they were very skilled at these manipulations.