According to US Senate records, Belle Haven has paid Alexander Strategy at least US$620,000 (HK$4.84 million) since September 2001.

A review of US Justice Department records by the Washington Post found that the two companies signed a new contract in late 2004 calling for Belle Haven to pay US$840,000 over the subsequent 10 months.

For three weeks that year, while Alexander Strategy represented Belle Haven, Standard Chartered Bank financed and directed part of the lobbying activity, according to Senate filings. StanChart has its own long- standing lobbyist in Washington and spokeswoman Gabriel Kwan declined to comment on the episode.

It's not clear what Alexander Strategy's shutdown will mean for the Hong Kong base. According to a source, although the firm boasted of dual Washington-Hong Kong offices in a 2002 press release, it largely operated here through Belle Haven, which remains open.

Sheffer and Cave operate a second company, Summit International Consultants, from the same premises. Neither Sheffer nor Cave could be reached for comment.

Aside from Belle Haven, Alexander Strategy also worked with at least a half a dozen other Asia-related clients but some of the liaisons were brief.

Shanghai River Resources, a Hong Kong consulting company run by Apple Daily executive and former Republicans Abroad chairman Mark Simon, hired Alexander Strategy in June 2002 to help promote a US- Taiwan free trade agreement on behalf of Taiwanese business interests but dropped the firm three months later.

Simon declined to publicly discuss the fall-out, but the Taiwanese moved their business to a rival lobbying firm two months afterwards.

The American Bondholders Foundation, which represents holders of bonds issued by pre-communist China, dropped Alexander Strategy in May 2002 but the filings do not indicate when the relationship started.

Another client was never mentioned in Senate filings. In December 1999, Ed Buckham traveled to the Pacific island of Saipan with Michael Scanlon, another former DeLay aide, to lobby members of the local legislature there to support Benigno Fitial, a former executive of an affiliate of Hong Kong- listed Luen Thai Holdings, to be House speaker.

The cash-strapped local government had suspended its pricey lobbying contract with Abramoff and Fitial supported its reinstatement.

Though he came from the minority party, Fitial won the speaker's post after two legislators switched their votes. The US Congress subsequently approved funding for special projects in the two legislators' districts and the local government reinstated Abramoff's contract.

Though Saipan yielded no official client for Alexander Strategy, the owners of Luen Thai and other island garment makers donated about US$500,000 to an organization called the US Family Network, which in turn paid hundreds of thousands of dollars to Alexander Strategy, according to a Post investigation of the group.

A similar dynamic may have been at work in Malaysia. In October 2000, Abramoff drew up a proposal on behalf of Preston Gates to assist the Malaysian government to repair an image damaged by political repression, anti- Western and anti-Semitic remarks by then-prime minister Mahathir Mohammed and the jailing of former deputy Anwar Ibrahim.

The plans included a public relations campaign, the organization of pro- government interest groups in the US and exchange trips by Malaysian and American officials.

Abramoff left Preston Gates soon after writing the memo, which is posted on The New Republic's Web site. By the end of 2001, Belle Haven had hired Alexander Strategy for help "promoting and advocating Malaysia's positive investment climate and business opportunities" in connection with a company called PK Baru Energy. A new group called the US-Malaysia Exchange Association also hired Alexander Strategy for support "enhancing the bilateral relationship between Malaysia and the US."

Virtually all of the money Alexander Strategy reported receiving from Belle Haven related to the Malaysian advocacy. Malaysia Exchange directly paid Alexander Strategy less than US$20,000 a year, according to Senate records.

Belle Haven also hired three other Washington lobbying firms, including one run by Heritage senior fellow and former US Senator Malcolm Wallop, around the same time to support its Malaysian campaign, paying them a total of US$780,000.

The Standard's earlier investigation reported that two of the firms indicated that Belle Haven retained their services on behalf of Malaysia Exchange. The US Lobbying Disclosure Act requires consultants hiring lobbyists to provide the identity of their real client, according to Jan Witold Baran, a Washington lawyer specializing in lobbying law.

A report by private investigators found PK Baru to be an inactive company run in part by Megat Junid bin Megat Ayob, a ruling party official and close ally of Mahathir who is also the chairman of Malaysia Exchange.

Megat Junid said in a 2004 interview with the Standard that he organized Malaysia Exchange after talks with Ed Feulner, whose deputy, Sheffer, served as a director. Wallop was deputy chair.

"We felt strongly when Bush won the presidency it was time to establish closer economic and social connections between the two countries," Megat Junid said. Sheffer told the Post, "These guys wanted to hire some people to figure out how can we start to improve our relationship with the US."

The new group generated fast results. In 2001, DeLay and three other congressmen traveled to Malaysia with their spouses on a trip officially sponsored by Heritage. Wallop, who went on the trip, told Time magazine that Belle Haven's financial involvement was more important to the trip than Heritage's.

In the following months, more congressmen made their way to Kuala Lumpur and senior Malaysian officials began beating a path to Washington, an interchange that climaxed with Mahathir visiting the White House in May 2002, his first state visit in eight years.

"We did a good job to create a good atmosphere between the two leaders," said Megat Junid, who was part of the delegation.

During Mahathir's visit, two House members who had recently traveled to his country launched an official Malaysia Trade, Security and Economic Cooperation Caucus. Though in past years Heritage had been publicly critical of Mahathir, Feulner hosted a dinner reception to honor the prime minister.

The Post, citing a former Heritage official, said Feulner that year pushed his staff to boost Malaysia's ranking in the Index of Economic Freedom, but the group denied such intervention.

Abramoff may have earned a return from coming up with the Malaysia action plan. A US Senate committee last year released an invoice for US$300,000 sent to the Malaysian Embassy in Washington by the American International Center in 2001. Two former Abramoff associates told the Post that the center was "a front created in part to hide Abramoff's representation of Malaysia."

The National Journal reported recently that the Malaysian government sent nearly US$1 million to the center in 2001 and 2002 and that the center in turn paid Greenberg Traurig, the firm Abramoff joined in January 2001 after leaving Preston Gates, US$1.5 million.

Intriguingly, a firm set up by close Abramoff ally Grover Norquist was retained to lobby on behalf of Anwar, the then-imprisoned former Mahathir aide whose cause celebre was cited in Abramoff's 2000 memo as a key justification for the government to commence its Washington drive.

Alexander Strategy's other big Asian client was the Korea-US Exchange Council, augmented by Universal Bearings, a company owned by the Hanwha Group of council chairman Kim Seung-youn.

Kim formed the council and hired Alexander Strategy to establish himself "as the leading Korean business statesman in US-Korean relations," according to a strategy document obtained by Time.

Feulner was on the council's board and Sheffer served as an adviser.

The Exchange Council and Universal Bearings have together paid Alexander Strategy close to US$1 million since 2001. Kim made key headway on his goal, hosting or traveling to Washington to meet DeLay, Vice-President Dick Cheney, House Speaker Dennis Hastert and then- Attorney General John Ashcroft, among others.

The junkets have come under scrutiny in part because House rules forbid members from accepting trips paid by the registered agents of foreign interests. The council registered as a foreign agent in 2001.

This picture of the C.I.A.'s secret war of ideas has cameo appearances by scores of intellectual celebrities like the critics Dwight Macdonald and Lionel Trilling, the poets Ted Hughes and Derek Walcott and the novelists James Michener and Mary McCarthy, all of whom directly or indirectly benefited from the C.I.A.'s largesse. There are also bundles of cash that were funneled through C.I.A. fronts and several hilarious schemes that resemble a "Spy vs. Spy" cartoon more than a serious defense against Communism.

Traveling first class all the way, the C.I.A. and its counterparts in other Western European nations sponsored art exhibitions, intellectual conferences, concerts and magazines to press their larger anti-Soviet agenda. Ms. Stonor Saunders provides ample evidence, for example, that the editors at Encounter and other agency-sponsored magazines were ordered not to publish articles directly critical of Washington's foreign policy. She also shows how the C.I.A. bankrolled some of the earliest exhibitions of Abstract Expressionist painting outside of the United States to counter the Socialist Realism being advanced by Moscow.

In one memorable episode, the British Foreign Office subsidized the distribution of 50,000 copies of "Darkness at Noon," Arthur Koestler's anti-Communist classic. But at the same time, the French Communist Party ordered its operatives to buy up every copy of the book. Koestler received a windfall in royalties courtesy of his Communist adversaries.

As it turns out, "Animal Farm" was not the only instance of the C.I.A.'s dabbling in Hollywood. Ms. Stonor Saunders reports that one operative who was a producer and talent agent slipped affluent-looking African-Americans into several films as extras to try to counter Soviet criticism of the American race problem.

The agency also changed the ending of the movie version of "1984," disregarding Orwell's specific instructions that the story not be altered. In the book, the protagonist, Winston Smith, is entirely defeated by the nightmarish totalitarian regime. In the very last line, Orwell writes of Winston, "He loved Big Brother." In the movie, Winston and his lover, Julia, are gunned down after Winston defiantly shouts: "Down with Big Brother!"

Such changes came from the agency's obsession with snuffing out a notion then popular among many European intellectuals: that East and West were morally equivalent. But instead of illustrating the differences between the two competing systems by taking the high road, the agency justified its covert activities by referring to the unethical tactics of the Soviets.

"If the other side can use ideas that are camouflaged as being local rather than Soviet-supported or -stimulated, then we ought to be able to use ideas camouflaged as local ideas," Tom Braden, who ran the C.I.A.'s covert cultural division in the early 1950's, explained years later. (In one of the book's many amusing codas, Mr. Braden goes on in the 1980's to become the leftist foil to Patrick Buchanan on the CNN program "Crossfire.")

The cultural cold war began in postwar Europe, with the fraying of the wartime alliance between Washington and Moscow. Officials in the West believed they had to counter Soviet propaganda and undermine the wide sympathy for Communism in France and Italy.

An odd alliance was struck between the C.I.A. leaders, most of them wealthy Ivy League veterans of the wartime Office of Strategic Services and a corps of largely Jewish ex-Communists who had broken with Moscow to become virulently anti-Communist. Acting as intermediaries between the agency and the intellectual community were three colorful agents who included Vladimir Nabokov's much less talented cousin, Nicholas, a composer.

The C.I.A. recognized from the beginning that it could not openly sponsor artists and intellectuals in Europe because there was so much anti-American feeling there. Instead, it decided to woo intellectuals out of the Soviet orbit by secretly promoting a non-Communist left of democratic socialists disillusioned with Moscow.

Ms. Stonor Saunders describes how the C.I.A. cleverly skimmed hundreds of millions of dollars from the Marshall Plan to finance its activities, funneling the money through fake philanthropies it created or real ones like the Ford Foundation.

"We couldn't spend it all," Gilbert Greenway, a former C.I.A. agent, recalled. "There were no limits, and nobody had to account for it. It was amazing."

When some of the C.I.A.'s activities were exposed in the late 1960's, many artists and intellectuals claimed ignorance. But Ms. Stonor Saunders makes a strong case that several people, including the philosopher Isaiah Berlin and the poet Stephen Spender, who was co-editor of Encounter, knew about the C.I.A.'s role.

"She has made it very difficult now to deny that some of these things happened," said Norman Birnbaum, a professor at the Georgetown University Law School who was a university professor in Europe in the 1950's and early 1960's. "And she has placed a lot of people living and dead in embarrassing situations."

Still unresolved is what impact the campaign had and whether it was worth it. Some of the participants, like Arthur M.

Schlesinger Jr., who was in the O.S.S. and knew about some of the C.I.A.'s cultural activities, argue that the agency's role was benign, even necessary. Compared with the coups the C.I.A. sponsored in Guatemala, Iran and elsewhere, he said, its support of the arts was some of its best work. "It enabled people to publish what they already believed," he added. "It didn't change anyone's course of action or thought."

But Diana Josselson, whose husband, Michael, ran the Congress for Cultural Freedom, told Ms. Stonor Saunders that there were real human costs among those around the world who innocently cooperated with the agency's front organizations only to be tarred with a C.I.A. affiliation when the truth came out. The author and other critics argue that by using government money covertly to promote such American ideals as democracy and freedom of expression, the agency ultimately stepped on its own message.

"Obviously it was an error, and a rather serious error, to allow intellectuals to be subsidized by the government," said Alan Brinkley, a history professor at Columbia University. "And when it was revealed, it did undermine their credibility seriously."