Ramparts Magazine Exposes CIA Foundation Funding Network, Ending Olin Money Laundering Operation

Ramparts magazine publishes Sol Stern’s article “NSA and the CIA” in March-April 1967, exposing that the Central Intelligence Agency has been secretly funding the National Student Association and revealing “the whole system of anti-Communist front organizations in Europe, Asia, and South America” operating through foundation cutouts. The exposures trigger political furor and force the CIA to fold its covert propaganda programs that had been laundering money through tax-exempt foundations including the John M. Olin Foundation, which served as a secret CIA “bank” from 1958 to 1966, channeling $1.95 million to “anti-Communist intellectuals and publications” while concealing government involvement in domestic influence operations.

The scandal reveals a broader pattern of CIA covert funding—in 1966-67, a series of high-profile newspaper stories document that the CIA secretly funded various civil society groups and organizations including well-known media outlets such as Encounter Magazine and the Paris Review. The Church Committee later concludes that the CIA maintained “covert relationships with about 50 American journalists or employees of U.S. media organizations.” The revelations have immediate foreign policy implications as the Soviet Union exploits the news in propaganda efforts, demonstrating how the exposure undermines U.S. credibility in the Cold War information campaign the covert operations were supposedly designed to support.

President Lyndon Johnson responds by establishing a committee chaired by Under Secretary of State Nicholas Katzenbach to address the crisis. The committee’s major recommendation, which Johnson accepts, is that no agency of the U.S. Government should provide covert financial assistance or support to any American educational or private voluntary organization in either a direct or indirect manner. The exposure ends the Olin Foundation’s eight-year run as a CIA money laundering operation, though the foundation remains largely inactive until 1969 when John M. Olin is disturbed by the Willard Straight Hall takeover at Cornell University—armed Black students occupying a building sparking his commitment to using philanthropic giving to combat campus radicalism. The 1967 scandal demonstrates how the CIA weaponized philanthropic infrastructure for domestic propaganda, revealing the blurred lines between intelligence operations, private foundations, and political advocacy that enables the later rise of dark money networks operating beyond public accountability.