When the FBI Used a Stamp Collecting Club as a Counterintelligence Tool

Today’s post is written by Dr. Greg Bradsher, Senior Archivist at the National Archives at College Park, MD.

In doing research in declassified Federal Bureau of Investigation records at FBI Headquarters in Washington, D.C., I ran across a file [105 -174254] describing a counterintelligence operation about a Chinese Communist stamp collecting club. Even though the records did not relate directly to my area of research, they piqued my interest. I thought the story of how the FBI in 1970 used a stamp collecting club as a counterintelligence tool would be of interest to readers of this blog. 

The story begins in the mid-1950s when FBI Director J. Edgar Hoover decided that the Bureau’s counterintelligence activities should be proactive as well as reactive. In an August 28, 1956, memorandum, Hoover began a counterintelligence program (COINTELPRO) to disrupt, expose, discredit, and otherwise neutralize the Communist Party USA and related domestic and foreign organizations, such as the Ku Klux Klan, the Black Panthers, and the Socialist Workers Party. 

Counterintelligence Program, page 2, August 25, 1967. Click the image above to open the entire document which has been digitized and is available online.

The Chinese Stamp Collecting COINTELPRO Operation had its origins in the FBI’s concern about the threat posed by the Chinese Communists. Hoover told Congress in 1965 that Communist China represented “one of the greatest long-range security threats” and that the FBI was “continuing to devote close attention to coverage of possible Chinese Communist  agents and sympathizers in the United States. He told Congress that Red Chinese intelligence activities would undoubtedly increase, particularly if Communist China were to be recognized by the United Nations and would thereby be able to establish a diplomatic mission in the United States.

In his fiscal year 1957 report, Hoover observed that the Chinese were increasing efforts to foment revolution and uprising throughout the world, and that Chinese agents would “demand an ever-increasing share of FBI investigative attention.”

In his 1969 testimony before Congress, Hoover first spoke of Chinese probes to obtain material, particularly in the scientific field. He pointed out that in one instance a Chinese-American businessman tried to send electronic equipment that could be used in aerospace research, missile tracking, and radar to the Chinese mainland. He mailed the embargoed equipment, labeled as replacement parts for printing equipment, to a Hong Kong merchant temporarily in Toronto, Canada. Canadian authorities, using FBI information, arrested the individual for making a false customs declaration.

Hoover told Congress in 1970 that during the previous year the FBI had experienced a definite increase in its Chinese investigations due to the stepped-up intelligence activities on the part of the Communist Chinese aimed at procuring technical data both overtly and covertly, as well as their efforts to introduce deep cover intelligence agents into the United States.

Portrait of FBI Director J. Edgar Hoover. 65-HN-4649, (NAID 518187). 

But while Hoover and the FBI were concerned about the intelligence problem posed by the Chinese Communist attempts to obtain American technology, the Nixon administration was beginning to normalize relations with the Chinese government. As part of the U.S. Government effort to improve relations, Foreign Assets Control regulations were amended in December 1969 to remove the one hundred dollar ceiling on non-commercial imports of Chinese Communist goods along with the requirement that these goods be brought into the United States only as accompanied baggage. Restrictions also were eliminated on U.S. business participation (banking, insurance, transportation, and trading) in third country trade in goods originating in mainland China and goods presumed under U.S. regulations to originate there.

Early in 1970 someone in the FBI’s research section decided that this commercial opening with China could be used to the FBI’s benefit in its counterintelligence activities against the Chinese Communists. This person may have been a stamp collector, because he proposed a COINTELPRO-type operation, using stamp collecting as a means of infiltrating Chinese intelligence networks to learn how those programs worked and how to penetrate such programs.  

On March 25, 1970, the FBI’s research section suggested to their San Francisco and Los Angeles field offices, as part of the FBI’s counterintelligence program, that consideration should be given to setting up a counterintelligence operation based on a group of individuals who specialized in collecting Chinese stamps. This operation would involve a cover organization that would make contacts with pro-Chinese Communist elements domestically and internationally, seeking to buy and trade stamps of the People’s Republic of China.

The cover organization would gradually assume a pro-Chinese Communist political orientation in anticipation it would enable sources under FBI control to gain travel to Communist China, to contact domestic and foreign Chinese Communists and pro-Chinese Communists for intelligence purposes, and to hold itself out as a possible vehicle for foreign intelligence use.

The Special Agent in Charge (SAC) of the FBI’s Los Angeles field office notified Hoover on March 30, 1970, that his agents had made contact with two of the larger commercial stamp collecting outlets in the Los Angeles area to determine the available sources for Chinese Communist stamps. In each instance, the agents were informed that there were no local sources for acquiring such stamps because the importation of such items were prohibited. The Los Angeles SAC reported that his office made contact with officials of the Customs Service and the U. S. Post Office Department and learned the importation of Chinese Communist stamps fell within the jurisdiction of the Foreign Assets Control Section of the Treasury Department. In making this report, the SAC attached a statement from page 234, volume 2 of the 1970 edition of Scott’s Standard Postage Stamp Catalogue that noted “Stamps issued by the People’s Republic of China are not listed because the United States Treasury Department (Foreign Assets Control Section) had prohibited their purchase abroad and importation.”

Hoover notified the Los Angeles field officer on April 10, 1970, that “because it is intended the proposed cover would act in a ‘casual’ manner as opposed to an incorporated or commercial fashion, it is felt it will not conflict with Foreign Assets Control, Treasury, or Customs regulations.”  The Bureau, Hoover wrote, had made inquiries with the Treasury Department to identify specifically any regulations or controls which could restrict the functioning of the proposed cover. He informed the Los Angeles field office that the fact that regulations existed would assist the operation in functioning, as the open objective of the stamp club would be to secure and exchange stamps in a “semi-clandestine manner.”

“This,” Hoover noted, “will authenticate the small scale maneuvers of the cover and lend credence to its later developing interest in matters of a political nature. It will also enable the operation to point out to its selected contacts its need to operate in secret and thus will project [blacked out] as a possible vehicle for Chicom intelligence use.” Hoover concluded his communication by saying that the Los Angeles and San Francisco field officer would be furnished any pertinent additional information received relating to regulations that could have a restrictive effect on the proposed operation. In the meantime, if the Los Angeles SAC felt the proposal had merit, he was to suggest recommendations on a step-by-step basis, as outlined in the Bureau letter of March 25, 1970.

To get the FBI counterintelligence rolling, an FBI agent who was an active member of a San Francisco area stamp club attended the regular meeting of the club on April 10, 1970, which was held at the home of the club secretary. In an FBI report about the meeting, this man was identified as semi-retired and no longer operating a retail stamp business. He continued to be active as an appraiser of Chinese stamps and as a wholesaler, importing stamps from various foreign philatelic agencies for distribution to retail dealers in the San Francisco area. At the meeting the FBI agent made certain that the collection of Chinese Communist stamps and the restriction of the importation of such stamps became a topic of discussion.

During the meeting “a spirited discussion” took place among the club members as to whether recent changes in the Foreign Assets Control regulations concerning the importation of goods from Communist China might make it possible to import Chinese Communist stamps into the United States.

In a report on the meeting, a listing of members present who had an interest in collecting Chinese Communist stamps was included, along with a brief description of each person. The report also noted that the FBI agent had contacted three individuals, all stamp dealers whom he personally knew, who had a particular interest in Chinese stamps. One, who was described as working for a well-known firm, spoke fluent Mandarin, was retired from the U.S. Marine Corps, and had spent many years in China, marrying a White Russian refugee there in the 1940s. Another individual was described as a veteran of the First and Second World Wars, who spent time in China while in the U.S. military service. He was described as being very active in veterans’ and civil affairs; participating in the leadership locally of the Veterans of Foreign Wars, Disabled American Veterans, and the Military Order of the Purple Heart. The third individual, who was described as being of a German background, had lived for many years in Shanghai and spoke fluently the Shanghai Mandarin dialect.

When discussing Chinese stamps with them, each stated that the importation of Chinese Communist stamps had been prohibited by government regulations and that there had been no changes in those regulations that would permit any commercial importation of Chinese Communist stamps. All three expressed the opinion that although recent changes in regulations might possibly permit individuals to bring Chinese Communist stamps into the United States as personal possessions purchased abroad, reputable dealers were hesitant to deal in such stamps for fear of arousing suspicion that they had imported such stamps commercially in violation of government regulations.

The San Francisco field office SAC informed Hoover on April 27, 1970, that his office believed the Bureau’s suggestion regarding the formation of stamp clubs consisting of persons interested in the collection of Chinese Communist stamps had merit “as a cover for a counterintelligence operation.” However, the SAC believed, to be successful such a club would have to include someone who had a genuine interest in and knowledge of Chinese Communist stamps. The SAC informed Hoover such a person existed. This person, who was probably a Chinese-American, was described as “a genuine liberal,” who was an instructor in a school “where militant activities had been manifest.” The SAC offered his opinion that if this person established the club, he would in no way “be suspected of organizing such a club at the instigation of the FBI. His sincere Christian convictions and his pride in being an American should guarantee that he would honor any commitment he might make to assist the FBI” in establishing the stamp club. The SAC requested permission to establish contact with him in participating the club. Permission also was requested to contact another person about participating.

In his April 27 letter to Hoover, the SAC also raised the question about a name for the stamp club. He indicated that the term “New China” should be avoided. Such a term, he wrote, “is a flag to indicate Chicom interests to anyone who is knowledgeable concerning Chicom fronts” and thus would be a reason why persons they had in mind to participate in the club would hesitate to join. He then proposed a name, which was still classified, that he thought would appeal to many Chinese, “both anti-Chicom and pro-Chicom, who hope for the eventual unification of Taiwan and mainland China.”

Hoover, in a letter dated May 7, 1970, granted authority to the San Francisco field office to make the two contacts it had requested in its April 27 letter. It was not until June that the San Francisco office conducted its first interview. On June 12, an FBI agent contacted an individual about his availability to assist in the organization of a club that would specialize in the collection of the stamps of Communist China. This individual said that he would be unable to be active in such a group because of his personal commitments but added that if such a club were organized, he would be happy to provide advice based upon his personal study of Chinese Communist postal issues.

San Francisco informed Hoover in July that other than this individual, the office had no suggestion for an appropriate person to head up the cover stamp club. The field office further informed Hoover that the newly elected president of the Chiu Chin Shan chapter [San Francisco Bay area] of the China Stamp Society was a capable person, “whose integrity and loyalty are undoubted, but he is in poor health and too elderly to function properly” in helping establish a Chinese Communist stamp club. 

In making the report to Hoover, the San Francisco SAC reported that he continued to believe “that the plan to organize a stamp club devoted to the collection of Chicom postal issues has merit as a cover for a counterintelligence operation.” He wrote that his office would “remain alert for a reliable source who is capable and willing to undertake the organization of such a club.” However, his field office had no source on mind, and unless advised to the contrary by Hoover, the San Francisco field office was placing the matter in a “Closed Status for a period of six months, at which time it will be reopened.” The SAC concluded the report by noting “it is quite possible that the trend to liberalize the importation of Chicom goods will continue, and that six months from now restrictions on the importation of Chicom postal issues will have further relaxed, this making it more feasible to organize the…stamp club.”

From the lack of evidence in the FBI files made available to me, it appears that the stamp club was never established. In part this was probably because the Bureau could not find a suitable candidate to head the club, but probably more so due to the ending of formal COINTELPRO operations in April 1971.

In early March 1971, burglars broke into the FBI Resident Agency in Media, Pennsylvania, and stole many documents related to COINTELPRO operations. These documents quickly made newspaper and magazine headlines, bringing much embarrassment to Hoover and the Bureau. Soon after the break-in, on April 27, 1971, a high-ranking FBI official, C. D. Brennan, wrote a memorandum to William C. Sullivan, the FBI assistant director in charge of the domestic intelligence division, recommending:

to afford additional security to our sensitive techniques and operations, it is recommended the COINTELPROS operated by the Domestic Intelligence Division be discontinued. These programs involve a variety of sensitive intelligence techniques and disruptive activities which are afforded close supervision at the Seat of Government [i.e., Bureau Headquarters}. They have been carefully supervised with all actions being afforded prior Bureau approval and an effort has been made to avoid engaging in harassment. Although successful, over the years, it is felt they should now be discontinued…because of their sensitivity…

In exceptional instances where counterintelligence action is warranted, it be considered on a highly selected individual basis with tight procedures to insure absolute security.

The next day, April 28, Hoover informed all field offices of the immediate discontinuance of all COINTELPRO operations. They were informed that “in exceptional instances where it is considered counterintelligence action is warranted, recommendations should be submitted to the Bureau under the individual case caption to which it pertains. These recommendations will be considered on an individual basis.” Hoover added a reminder that “prior Bureau authority is required before initiating any activity of a counterintelligence nature.”

In late 1971, the People’s Republic of China was admitted to the United Nations. The Bureau’s attention turned to the domestic threat Chinese officials in America would present. And so ends the Chinese Stamp Collecting Club Operation.

The Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities, chaired by Senator Frank Church during 1975 and 1976 investigated, among other things, the FBI’s COINTELPRO operations. After holding 126 full committee meetings, 40 subcommittee hearings, interviewing some 800 witnesses in public and closed sessions, and combing through 110,000 documents, the committee published its final report on April 29, 1976. The final report included 96 recommendations, legislative and regulatory, designed “to place intelligence activities within the constitutional scheme for controlling government power.” The committee observed that “there is no inherent constitutional authority for the President or any intelligence agency to violate the law,” and recommended strengthening oversight of intelligence activities.

For further reading about FBI records see: The Challenge of Federal Bureau of Investigation Records: Abbreviations and Euphemisms

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