IMF Historian Attempts To Whitewash The Spy Career Of The Fund's Founder

By Benn Steil

American economist James Boughton recently retired from the International Monetary Fund after nearly two decades as the institution’s official historian. Over his long tenure at the Fund, Boughton labored, according to anarticle in the Fund’s Finance and Development magazine, to shed light on “an organization long criticized for its secrecy and lack of transparency.”

Yet when it comes to the subject of the Fund’s founding architect, FDR Treasury official Harry Dexter White, Boughton was, and continues to be, demonstrably and wilfully inaccurate. Boughton is now virtually alone among contemporary chroniclers of White in exculpating him – in spite of overwhelming documentary evidence, the authenticity of which Boughton does not challenge – of espionage on behalf of the Soviet Union.

President Harry S. Truman’s efforts to keep secret the FBI’s investigation of White’s illegal activities was the reason why White never became managing director of the Fund – and indeed the reason why the tradition of a European heading the Fund, rather than an American, began in the first place. What Truman, and indeed the FBI, had been unaware of in 1946 was that intercepted wartime Soviet intelligence cables would establish White’s culpability. Decrypting of such cables, part of the top-secret “Venona Project,” took place over many decades, and the first one mentioning White’s activities was not known to the FBI before 1950. The cables were only declassified nearly half a century later, in the mid-1990s. Reviewing thousands of them, a Senate commission led by the late New York Democrat Daniel Patrick Moynihan officially concluded in 1997 that White’s complicity in espionage “seems settled.”

Yet Boughton is still having none of it. His latest rendering of this “benign” story in The Nation insists, incredibly, that the cables reveal nothing more than White engaged in “indiscreet gossip” with official Soviet contacts.


In fact, the 18 cables referencing White which I found among 13,000 pages of FBI documentation on him, dated from March 1944 to January 1946 (considerably longer than the range indicated by Boughton), reveal far more than this. They show White passing confidential strategic information to Soviet intelligence through American moles, as well as directly to Soviet operatives, and expressing grave concern over whether and how his activities can continue to be kept secret.

Read the rest here.