Memorandum re China Lobby

DECLASSIFIED E.O. 12065, Sec. 3-402 State Dept. Guideline, June 12, 1979 By NLT HL NARS, Date 7-17-f1 CHINA LOBBY Large swis, it is alleged, have been transferred to Chinese Nationalist account in the United States to be used for bribery and propaganda. There are recurrent reports that one or more members of the Kung and Soong families control and distribute such funds, allegedly in concert with Alfred Kohlberg and possibly others, such an Maurice Williams, William J. Goodwin, Allied Syndicates, Inc., etc. Some of the available material is as follows: 1. It is reported that a substantial our has been withdrawn from the Bank of China for purposes of propaganda work and bribery in the United States. Those funds are said to have gone to Madame Chinng Kai-Shek and certain other persons for use in bribing American officials. 2. Mr. Marriner Eccles has said that he could cite book, chapter, and verse to show that 125 million dollars of the amount grented on loan by this country to the Chiang Kei-Shek regime found its way back to this country and was used to subsidise the attacks by McCarthy and others on the administration and our Far Eastern policy. 3. It is reported that L. Kung, who is the son of H. H. Kung and the nephew of Chiang Kai-Shek, is active in the firm of Allied Public Relations, Associates and is putting a good deal of money into the firm for pro-Nationalist propaganda. It was also reported that the firm has been the go-between for Chinese contributions to political campaigns, money being transmitted from Tangier through a New York bank. 4. A key figure in the activities of the Chins Lobby is Mr. Alfred Kohlberg. Mr. Kohlberg is the guiding spirit and chairman of the Board of Directors of the American China Policy Association, Inc. Mr. Kohlberg is an energetic pomphleteer on Chinese matters, and his pamphlets have been circulated by William Goodwin, a former lobbyist for the Chinese Nationalists. Kohlberg was also the principal figure in the bitter attacks on the IPR and Ambessador Jessup. Kohlberg founded the magazine "Plain Talk" in October 1946, and recently the "Freeman". Oz Macy 10, 1950, there was inserted in the Conressional Record an exchange of letters between Mr. Kohlberg and Dr. H. H. Kung and Dr. T. V. Soong, in which he asked them whether they had objections to making available any information which the State Department or the Treasury might have on their holdings in this country. They replied to him that if the U.S. Government had any such information they would have no objection to making it public, but did not volunteer any information themselves. Mr. Kohlberg is a men of independent means. His business consists of purchasing linen in Ireland and shipping it to Swatow, where the linen is made up into handkerchiefs by Chinese home labor. Mr. Alfred Kohlberg is the cousin of Jerome Kohlberg, the President of the Kone Import Company, which recently was involved in a