Gerald Ford paid for secret labor operations to block Communist rule in Portugal

By Harlan Pryce · August 17, 2026

Portuguese workers and political moderates became the targets of a program marked "Outside the System" to keep the nation from falling to radicals, with the cost still blacked out today.

Portuguese workers and political moderates in the mid-1970s found themselves the quiet targets of a Washington gamble to steer their country away from totalitarianism. The cost of this intervention remains hidden, the dollar amounts scrubbed from the record, but the objective was absolute: ensure Portugal did not slide into the Communist orbit.

In August, the 40 Committee—the inner circle responsible for overseeing covert action—recommended a program designed to "support moderates and resist Communist and other radical attempts to impose totalitarian rule." This was not a diplomatic effort conducted in the sunlight of the State Department. It was an operation marked "Secret; Eyes Only; Outside the System," a designation that, in the trade, suggests a level of compartmentalization designed to protect the sponsor from any trace of linkage.

Labor operations

By November, it became clear that the initial strategy required adjustment. Ambassador Carlucci, with the concurrence of the CIA, proposed "reprogramming" and new funding to meet the shifting needs on the ground. The most telling detail in the memorandum is the request for the release of funds specifically for "labor operations."

In the lexicon of clandestine HUMINT and covert action, "labor operations" are rarely about the benign improvement of working conditions. They are about the strategic infiltration of unions and the financial cultivation of labor leaders who can neutralize the influence of the far left. To keep a nation from tipping toward totalitarianism, one does not simply lobby the government; one manages the street and the shop floor.

The Office of Management and Budget (OMB) reviewed these proposals and determined that the requested amounts "appear to be reasonable" and that budget justifications existed. The 40 Committee approved the shifts on November 14, ensuring the machinery of influence remained funded.

December 4, in China

While the Portuguese moderates struggled for survival against the radical left, the man signing their checks was halfway across the globe. President Ford initialed the approval of Scowcroft's recommendation on December 4, adding a handwritten note beside his initials: "(in China)."

It is a stark image of the era's global chess match—a president in Beijing, authorizing the flow of secret money into Portuguese labor unions to prevent a collapse in Lisbon. The memorandum notes that because the purpose and direction of the program had not changed since the original Presidential Finding on August 10, it was "not necessary" to submit a new finding to the Congress. Instead, the record simply states that "appropriate committees of the Congress will be informed of this."

Outside the System

This operation highlights the enduring tension in American intelligence: the overlap between clandestine collection and covert action. As the public record notes, the question of whether these two functions should reside in the same agency remains unsolved. The arguments for centralization—avoiding duplication in cover identity support and secret communications—are clear. However, the mindset required to run a long-term asset is fundamentally different from the mindset required to execute a rapid covert action to stabilize a foreign government.

In Portugal, the goal was not merely to know what the radicals were doing, but to actively counter it. This required a fluidity in funding that the 40 Committee provided, bypassing standard bureaucratic hurdles to move money where it could do the most damage to the Communist cause.

Despite the clarity of the objective, the ledger remains blank. Every single dollar amount in the memorandum has been redacted, leaving the actual scale of the investment invisible. We know the program was "important to the national security of the U.S.," and we know the President approved the spending while visiting China, but we do not know the price of the Portuguese moderates' survival.

The memorandum refers to a "Tab A" which would have provided the granular breakdown of how the funds were utilized and who, specifically, was being paid. That tab was not attached to the file. The record leaves us with the intent and the approval, but the specific names and accounts of those paid to hold the line in Portugal remain missing.