City Paper (Baltimore, Washington, D.C.), Jan. 15, 1982

Recent mass defections from the National Caucus of Labor Committees (NCLC) have triggered the gravest crisis in the 14-year history of this wealthy neo-Nazi cult.

On October 30, in a move which apparently took NCLC chairman and 1980 Presidential candidate Lyndon LaRouche by surprise, 117 party members—roughly one fourth of NCLC's inner cadre—announced in an open letter their resignation "from membership and all official positions" in NCLC and in "all other LaRouche-affiliated organizations."

The resignees were led by Midwest NCLC chief Kenneth Dalto and included members from Chicago, Boston, Atlanta and Houston, as well as the entire Detroit chapter, which had played a pivotal role in NCLC's dealings with the Teamsters Union and the mob.

Sources close to the Dalto group say the latter had become cornpletely disillusioned with NCLC's anti-Semitism, authoritarian leadership methods, and political paranoia. In addition, Dalto and several associates had developed a highly profitable financial printing business. They reportedly wish to concentrate on this business and on as-yet-uncharted political activities free of right-wing extremism or of further involvement with LaRouche's underworld contacts.

LaRouche's initial response to the resignations was to issue a series of amazingly indiscreet internal memos from his international command post in Wiesbaden, West Germany. These documents attempt to explain the split in terms of LaRouche's anti-Semitic conspiracy theory and to whip up his loyalists for a political counterpunch against both Dalto and Dalto's alleged Zionist controllers. In the course of the memos, LaRouche discussed openly the dominant role played in his 1980 New Hampshire presidential primary campaign by one Jack Ferris, a close associate of Detroit Teamster and convicted racketeer Rolland McMaster. LaRouche also expressed open sympathy for certain sections of organized crime and alluded to his own attempts to advise them politically. He even discussed a scheme to set up Dalto for a "rub out" by Chicago mobsters.

According to the memos, the mass resignations represent a "coup" within the Midwest NCLC organization carried out by "moles" operating on behalf of "Dope, Inc.," a mythical group of Jewish financiers which the LaRouchians believe is working with Jewish mobsters to undermine America through narcotics trafficking. The key Jewish figure in instigating the coup, LaRouche says, was Detroit financier Max Fisher. LaRouche claims that, as early as 1978, "the Fisher-centered banking apparatus was sinking its dope-soaked teeth into the Dalto-run Detroit grouping...." LaRouche also blames the Anti-Defamation League of B'nai B'rith, which he describes as an integral part of Dope, Inc., and he suggests that the ADL should properly be termed the "Adore Dalto Lobby." He concludes: "We now know how the ADL officials and others have been playing the game...We now know exactly how to proceed to crush this murderous filth."

  • LaRouche's loyalists regard the Dalto group as traitors primarily because the Dalto group has repudiated anti-Semitism. This point is revealed via a barrage of sick "jokes" which accompany the LaRouche memos in daily NCLC "briefings." The jokes attempt to hold Dalto and his group (termed the "Country and Western Sex Club" in the jokes) up to ridicule for their alleged ties to Max Fisher and other "rich Jews." Sample:

    In the back room of Ken Dalto's Country and Western Sex Club, the new battle plans...were laid out.

    "I think it's time I called your attention to a fact some of you have been blocking on," Dalto began, stroking the crotsch [sic] of his trousers. "I mean Jews...I'm talking about real Jews, Jews with money, Jews with lots and lots of money."

    "From now on, we're going to be very friendly to Jews...."

    A henchman nodded enthusiastically, "I'm with you all the way, boss. Do you think Max Fisher would enjoy a night sleeping with my wife?"

    Another joke depicts Dalto as redecorating the lobby of the Club, and renaming it the "Zionist Lobby." A third joke, reflecting NCLC's frustration over losing key contacts in the farm movement (who were close to the Detroit group), includes the quip that Dalto has launched a new periodical entitled, "Jews With Farmers Forever."

  • LaRouche boasts of a scheme to set up Dalto for murder by the Mafia. "It has been learned that Ken Dalto was keeping a double set of books to rip off a business contact in Chicago," states an unsigned memo, apparently in reference to one of the alleged mob investors in a Detroit-based NCLC firm. Another memo describes this contact as a "so-called Mafia boss" and as Dalto's "partner." And LaRouche says in a signed briefing: "Let the 'Mafia' rub out Ken....Naturally, we shall not be reticent in mentioning to certain circles certain facts now documented in our possession. Let the creep sweat. Let him run. Let him choose his hiding place."

    Sources close to the Dalto group say they doubt that the officers of the business in question were cheating their investors, but the LaRouche loyalists may have concocted false evidence. For sure, NCLC has developed an obsession with fantasies of bodily harm to be inflicted on Dalto. For instance, the daily jokes: in one, Dalto ends up committing suicide; in another, the "Chicago Mafia" plants a bomb under his Lincoln Continental; in a third, he arrives at the gates of Hell "wearing a new, custom-fitted pair of cement overshoes."

  • LaRouche announces that he will take reprisals against dissidents who remain within NCLC. "From now on..." he wrote, several days after the mass resignations, "I promise you all that I shall a commanding general of a combat organization. Anyone who opposes my orders will, in the moral sense, be shot on the spot for insubordination....I am the 'boss'."

  • LaRouche expresses sympathy for segments of organized crime. In a memo called "The Mafia in U.S. Life," he writes: "Many of the persons and circles which are reputed to be associated with the Mafia are good people...." He argues that these people "hate" the drug traffic, but are infected by an ideological pragmatism that causes them to continue to make deals and keep the peace with the alleged Zionist (or "Drug-Mafia") wing of organized crime. He speaks of his personal attempts to convince trade union leaders (such as a "top official" of the mob-dominated Laborers' Union, as well as Teamster leaders) of this viewpoint, without success. He says that the government's Brilab prosecutions (under which New Orleans crime boss Carlos Marcelo was recently convicted of bribery) are in essence an attempt by the bad Mafia in alliance with the government to destroy the good Mafia; and that if the NCLC ("the last political bastion of resistance against Abscam-Brilab") is destroyed, then "honest trade unionists" (i.e., the Teamsters and the Laborers) "will be picked off by [Justice Department] task-forces like flies."

    The Justice Department's efforts attacked in recent NCLC propaganda include the prosecutions of Marcello, of New Jersey racketeer Anthony Provenzano, and of Florida narcotics kingpin Santo Trafficante, Jr. (the latter, an old associate of LaRouche supporter Rolland McMaster). Most observers of organized crime would dispute strongly any characterization of these underworld leaders as "good people" who "hate" the drug traffic.

  • LaRouche "indicts" himself. NCLC defectors who have examined the secret memos point out a red thread. Again and again, LaRouche alludes to or openly describes questionable practices by his own organization: the mob investments in NCLC businesses; the hiring of Jack Ferris to run LaRouche's New Hampshire campaign (for which Ferris was paid over $96,000, according to Federal Election Commission records); the use of threats of Mafia violence to keep NCLC members in line; the strong influence of "'advisers' in Southfield, Michigan" (apparently, the McMaster crowd); the alleged contacts with Atlanta drug traffickers; the development in NCLC of a "'Mafia Connections' self-image"; and the attempts to influence New Hampshire voters through a policy of "have a hundred-dollar bill."

    LaRouche attempts to blame it all on former aides such as Dalto, but as most former followers of LaRouche agree, NCLC is a total dictatorship in which all major policy decisions are made by LaRouche. If the above allegations by LaRouche are true, then he himself must bear the chief blame.

    In his more lucid moments, LaRouche is apparently aware of the latter fact. In one memo, he cautions NCLC loyalists: "Under no circumstances discuss with contacts the use of the 'Mafia Violence' aura outside of the ranks of the membership....If you were to discuss this publicly, we would prematurely trigger [the] possibility of legal action...."