Cold War Business

Cover 2 b.png

Few periods of history enjoyed the economic growth and prosperity generated by the fear and mistrust of the Cold War. The aftermath of the Second World War left political alliances frayed and the ambitious governments of Russia and the United States taking diametrically opposite social positions. Previous World War II funding and materials supplied by the United States to Russia was redistributed to set up democratic bulwarks in Western Europe. Stalin and the Communist Soviet regime annexed roughly half of Europe while a deep freeze settled over world policy and these two superpowers drew lines across the world.

The Cato Institute reports between nineteen forty-eight and nineteen eighty-six the United States alone spent over six trillion dollars on military spending with the inclusion of every Cold War engagement.i This includes but is not limited to the reinforcement of Europe, Cambodian and Laotian operations, the Cuban Missile Crisis, the Korean and Vietnam wars, vast troop and material costs, and our nuclear stockpile. According to the study, official groups usually assumed over two thirds of business costs in military spending and the private business paid the remainder. Such lucrative contractual arrangements in the proper circumstance would be a windfall to the right person and might offer a later path to influencing policy making. That person might prove quite useful for gathering intelligence, spreading propaganda, and providing advice to interested officials.

Official Adviser Leo Max Cherne

Official Adviser Leo Max Cherne

Leo Max Cherne was born to poor Russian immigrants on September 8, 1912 in the Bronx. Educated as a youth in New York City, Leo subsequently attended New York University and New York Law School by the early nineteen thirties. Following his education and employment in multiple legal practices, he collaborated with a sales representative and published a book recounting Cherne's financial advice. After a profitable release, the two men expanded their company to become the Research Institute of America and expanded Cherne's public advice to a greater audience with public speaking engagements. Cherne's success drew the notice of United States officials due to his staunchly pro-American and anti-Soviet beliefs. He was instrumental for using business practices to adapt industrial and military cooperation and General Douglas MacArthur utilized Cherne during the post-war reconstruction of Japan's economy. Cherne was a self-styled cold warrior but he publicly supported civil rights and criticized Joseph McCarthy's unethical tactics in fighting the Communist threat.

He became chairperson of the financially troubled International Rescue Committee in 1951 and soon his fundraising saved and propelled the expansion of the charity organization. By nineteen fifty-six, Cherne observed the Soviet repression of revolting Hungarians and reported his experience on the nationally syndicated Ed Sullivan program. This raised a substantial amount of money for support to refugees and provided greater national publicity to Cherne's multiple endeavors.ii The IRC still exists today and from Cherne's work has reportedly aided hundreds of thousands of people during his tenure and his many journeys to far off places to ease refugee suffering has been called a moral crusade. Yet it was not just the need to help others would spur his crusade against the Soviets.

Leo Cherne often had written exchanges with several prominent United States officials for decades and even gave advice to the Franklin Roosevelt's administration. In one nineteen sixty response CIA Director Allen Dulles tried rearranging his schedule but apologized for not being able to attend Cherne's presentation due to a prior commitment.iii The wealthy and largely egotistical Dulles apologizing to a once poor boy from the Bronx and wishing him luck is one mark of how far Cherne's influence extended. Records note he was aiding Cuban refugees during the nineteen sixties and is present for alleged humanitarian reasons in Cambodia in nineteen seventy-five.iv Serving as the Chairman of the President's Foreign Intelligence Advisory Board (PFIAB) Cherne would object to the National Security Agency's foreign intelligence collection guidelines as being too restrictive.v Official desires to prevent the limitation of intelligence collection methods still affects policy decades later as evidenced by the NSA's subsequent invasive PRISM surveillance program.

Central Intelligence Chief William j. Casey

Central Intelligence Chief William j. Casey

CIA Director William Casey thanked "Leo" during nineteen eighty-one in one of their many exchanges for his "prompt and thoughtful" comments on a considered draft paper related to securing US financial structures against Soviet attack or manipulation. These men would establish a powerful friendship that would noticeably influence United States foreign During nineteen eighty-four, Cherne remained on the PFIAB advising Casey on policy to deal with the violent clashes between forces in Salvadoran Civil War. He suggested to Casey that left-wing guerrilla tactics be condemned for "propaganda purposes".vii Cherne according to the New York Times during his service to the administration of George H.W. Bush developed "Team B, a group of experts headed by Richard Pipes, the Harvard historian, which disputed C.I.A. assessments of Soviet military capabilities...the committee's more alarming estimates bolstered the position of the strongest proponents of increased United States military expenditures." He would regularly make contact with intelligence officers in the due course of his various appointments, yet were Cherne's ties with intelligence figures merely the regular course of his official advisory role?

Some would correctly note Cherne's sustained friendly and political interactions do not alone constitute a direct connection or employment with an intelligence group. Nevertheless, a contract summary in the JFK Records Act releases clarifies the matter and presents Cherne's past employment with the Agency. The file dated June 1, 1959 refers to a headquarters support agent using the pseudonym or alias Bruce G. Mastrocola whose listed birth date is September 8, 1912, Leo Cherne was born the same day. "Mastrocola" had superior authority within matters of "government, taxes, foreign trade" and possessed "High-level contacts with the Cuban Government". Leo Cherne was a master of trade, government, and tax law who frequently visited Cuba for humanitarian and business purposes during the period and possessed high-level Cuban influence. Officials list Mastrocola's employment leading a research institute and his membership in the International Rescue Committee. Ironically for all the care taken to hide the subject's identity a notation paper clipped to the cover page of the file reads "Leo Cherne".viii

Cherne would advise nine American presidents, befriend multiple CIA directors, and push for huge spending to establish a thriving military industrial complex. His charity work simultaneously aided thousands while providing cover to gather intelligence and promote his Cold War agenda. While Cherne was proud of his praise garnering charity work and the awards from America's highest officials, his desire to oppose Communism using intelligence operations was directly connected to this. As one former high official and friend visiting a declining Cherne in the hospital offered despite his legacy of charity that Leo said, "I hope I'll also be remembered as a cold warrior."
C.A.A. Savastano

i. Robert Higgs, (November 20 1988), US Military Spending in the Cold War Era: Opportunity Costs, Foreign Crises, and Domestic Constraints, Cato Institute,
ii. Michael T. Kaufman, (January 14, 1999), Leo Cherne, Leader of Agency for Refugees, Is Dead at 86, New York Times,
iii. Central Intelligence Agency, Library Reading Room, Letter to Mr. Leo Cherne , Executive Director, from Allen W. Dulles, March 31, 1960,
iv. Leo Cherne, Refugees' Advocate, Dies at 86, (n.d.), Washington Post,
v. CIA, Library Reading Room, Meeting with President's Foreign Intelligence Advisory Board (PFIAB) Chairman Leo Cherne, June 9, 1976,
vi. CIA, Library Reading Room, Letter to Leo Cherne from William J. Casey, November 2, 1982,
vii. CIA, Library Reading Room, Memo to Leo Cherne from (Sanitized), April 25, 1984, viii. National Archives and Records Administration, CIA file, Mastrocola, Bruce G., National Archives and Record Administration Identification Number: 104-10222-10001,

Related Articles
The Business of Intelligence
Related Podcast
Exceptional American