In 1955, Carto announced that he was organizing "a lobby for patriotism," which eventually became known as Liberty Lobby — presently the most influential right-wing extremist propaganda organization in the United States. Although Carto is Liberty Lobby's founder and leader, he typically directs the group's operations from behind the scenes. For example, in an August 15, 1993, letter to The Washington Post Book World — itself a rare instance of Carto appearing in a non-Liberty Lobby forum — the veteran hatemonger described himself as "an officer and (low-paid) employee" of the organization he created. Shunning attention, he rarely speaks in public, generally refuses to be interviewed, and even keeps his name off the masthead of Liberty Lobby's weekly tabloid, The Spotlight. His official title of "Treasurer" greatly understates the scope of his authority.
While running Liberty Lobby from the shadows, Carto established a network of extremist publications and organizations. In 1966, he acquired control of the magazine American Mercury, originally associated with H.L. Mencken, and transformed it into a quarterly journal of anti-Semitic propaganda. He issued it in tandem with the bimonthly Washington Observer Newsletter, similarly laced with anti-Semitism. Both are now defunct. Previously, Carto had founded Western Destiny (also defunct), a magazine which during the 1960s produced racist, Nazi-tinged articles; and Noontide Press, which continues to publish and offer for sale anti-Jewish and pro-Nazi books.
One such book was Francis Parker Yockey's 600-page Imperium, which was dedicated to Adolf Hitler and featured a 35-page introduction written by Carto himself. Yockey, an outspoken admirer of Hitler, was arrested in San Francisco in 1960 on passport fraud charges and subsequently committed suicide in prison. His book offers a rehash of Nazi doctrine -- it denounced, for example, "the Church-State-Nation-People-Race of the Jew" as "distorters of culture."
Yockey's ideology pervades the propaganda of Liberty Lobby and its offshoots, such as the Institute for Historical Review (IHR), which specializes in Holocaust-denial propaganda, and the Populist Party, a far-right political vehicle. This extremist agenda persists among these groups in spite of the fact that the Populist Party -- since renamed the American Nationalist Union -- and IHR have broken from Carto and the Liberty Lobby network. Under oath during proceedings connected with an unsuccessful Liberty Lobby lawsuit against ADL in 1979, Carto admitted to remaining faithful to the tenets of Yockey's neo-Nazi philosophy.
As deep as his attachment to Yockey is Carto's antipathy toward Jews. (A racist as well as an anti-Semite, Carto complained during the 1950s that
"Hitler's defeat was the defeat of Europe. And of America. How could we have been so blind? The blame, it seems, must be laid at the door of the international Jews. It was their propaganda, lies and demands which blinded the West to what Germany was doing. . . . If Satan himself, with all of his superhuman genius and diabolical ingenuity at his command, had tried to create a permanent disintegration and force for the destruction of the nations, he could have done no better than to invent the Jews."
In a subsequent memo, Carto elaborated on these beliefs:
"Who is using who [sic]? Who is calling the shots? History supplies the answer to this. History tells us plainly who our Enemy is. Our Enemy today is the same Enemy of 50 years ago and before -- and that was before Communism. The Communists are 'using' the Jews we are told. . . . [W]ho was 'using the Jews 50 years ago --100 or 1,000 years ago. History supplies the answer. The Jews came first and remain Public Enemy No. 1."
Carto's anti-Semitism was further manifested in the Institute for Historical Review, which he founded in 1979 to spearhead a movement to deny the reality of the Holocaust and to market Holocaust-denial propaganda. Carto was aided at the start by William David McCalden, a racist and anti-Semitic British publicist who -- using the alias Lewis Brandon -- served as IHR director until 1981 (when he left due to differences with Carto). Based in Costa Mesa, California, the IHR operated under a guise of scholarship and published spurious "revisionist" studies laced with anti-Semitic themes in its quarterly Journal of Historical Review and the now-discontinued IHR Newsletter. Carto promoted the Institute, contributors to its publications and Holocaust denial generally in The Spotlight and on "Radio Free America." A 15-page "Holocaust supplement" in the December 24, 1979, issue of The Spotlight included headlines that amplified Carto's unique rendition of the holiday spirit: "Were Six Million Jews Exterminated?" "Famous 'Gas Chamber Victims' Living Well," "Need $50,000? Find a Holocaust Victim," "Torture Used to Make Germans 'Confess.'" As Deborah Lipstadt has noted, The Spotlight ran articles claiming that Auschwitz victims were cremated to control typhoid, that the "gas chambers" were actually life-saving delousing showers, that the Diary of Anne Frank was a hoax and that Jews created the six million number to convince the United Nations to support the creation of Israel.
Carto was also able to gather virtually all of the world's foremost deniers at IHR's annual conferences, as well as surviving Nazis, children of Nazis, anti-Jewish polemicists not known for their views about the Holocaust and nonracist iconoclasts (like Hitler biographer John Toland and journalist John Sack). Carto set the tone for these events with his remarks at the organization's first conference in 1979, calling the Holocaust "atrocity propaganda" and declaring Zionists to be "predators" who exploit the "guilt" of the West and "offer us expiation for the sins of our fathers by giving us the magnificent opportunity to contribute to the building of God's promised land for God's chosen people with our tax money."
In September 1993, the Institute's editorial staff and board of directors voted to terminate its association with its founder. On October 4, 1993, Carto received a letter announcing that he had been "fired." According to court documents, the falling-out stemmed from the purchase of a new Cadillac by Carto's wife using IHR funds, Carto's purchase of an insufficient insurance policy prior to a 1984 arson that destroyed IHR's warehouse and offices, his skimping on pay and health benefits and his "launching and subsequent mishandling of the reward offer" in the Mel Mermelstein affair. The latter referred to a civil judgment successfully brought against IHR by Auschwitz survivor Mermelstein after the Institute failed to pay him a $50,000 "reward" it had offered for "proof" that the Nazis had operated execution gas chambers during World War II. (The 1985 court judgment forced IHR to pay both the $50,000 reward and an additional $40,000 for pain and suffering.) IHR's director at the time, Tom Marcellus, also alleged that Carto planned to redesign the Journal for Historical Review into a more straightforwardly racist publication.
The most significant stake in this controversy was control of as much as $10 million in stock certificates bequeathed to IHR's parent corporation, The Legion for the Survival of Freedom, by Jean Farrel, an heir of Thomas Edison. The summer before Carto's "dismissal," Marcellus reportedly discovered a $100,000 bank order for Liberty Lobby drawn from the Farrel bequest. According to Marcellus, Carto had directed his wife to set up a corporation for the sole purpose of controlling Farrel's money and loaning it back to the Legion -- thus making the Legion a less attractive target for potential lawsuits. Because the IHR defined itself as the Legion, the senior staffers demanded control of the money bequeathed to the parent company. Marcellus discovered that while Carto had long claimed to be merely the corporation's "agent," the Legion listed as a corporate director a person who had been dead for five years; the board had never met; and Carto was the sole and controlling voice. Marcellus and his colleagues and lawyer were able to assemble a new board that terminated all association with Carto.
Carto's immediate response was to arrange a meeting with the IHR principals and their lawyer. While they waited for Carto at the lawyer's office, he went instead to IHR headquarters with his wife and three others and began disconnecting telephones, changing locks and tampering with computers; he also faxed the IHR attorney, stating that he was "now in control of the IHR office." A scuffle ensued, and he was ultimately dragged from the premises by police as he screamed, "You're killing me."
As the dispute entered a long and complicated litigation that would involve several lawsuits -- and prompt a relentless campaign of vituperation and false rumor by Carto -- The Spotlight announced in August 1994 that Liberty Lobby was launching a new publication devoted to historical revisionism called The Barnes Review (after the 20th century revisionist historian Harry Elmer Barnes). In a Spotlight editorial, Carto stated:
"Real news, like real history, is very controversial in this day of the politicization of both. So what is more appropriate than for The Barnes Review to be assisted by the staff of the one American newspaper, The Spotlight, which has proven ... to be far ahead of the rest of the news media in reporting events ... which are habitually hushed up by that same media which touts myth and lies as history?"
Fortune has not smiled on Carto in recent years. On November 15, 1996, California Superior Court Judge Runston G. Maino ruled in favor of IHR, saying Carto owed the group and the Legion for the Survival of Freedom, $6.43 million of the estimated $7.5 million bequeathed by Farrel. Judge Maino further characterized Carto's role in the proceedings:
In response to the decision, both Carto and Liberty Lobby filed for bankruptcy. After three years of legal and extralegal maneuverings to slow or avoid making debt payments and, allegedly, to shield his assets in corporate shells, a series of Federal Bankruptcy Court decisions in June and July 2001 forced him to relinquish control over The Spotlight and Liberty Lobby. He also lost the Washington, D.C., offices Liberty Lobby had occupied for 40 years. Hardly slowing, Carto and his associates produced a rejiggered version of The Spotlight in August called the American Free Press.