“In the late 1950s, the CIA were worried about what they saw as the PAP’s close ties with pro-communist elements. They even approached the British Special Branch about it but the SB told the CIA not to worry (the British knew Lee better than the Americans). The CIA, naturally, decided to take matters into their own hands, and mounted their own covert op to infiltrate Singapore’s intelligence apparatus. This was discovered in 1960.
The local CIA station chief then apparently tried to bribe Lee to hush up the matter, offering him US$3.3 million. Lee refused and counter-proposed US$33 million in aid to Singapore. Eventually, Dean Rusk, Kennedy’s Secretary of State, who had inherited the mess, wrote Lee a formal letter of apology in 1961 for the affair.
But when Lee recounted the story a few years later, the CIA issued one of its automatic denials. Lee was enraged – not only had the CIA tried to bribe him like some tin-pot third world dictator, now they were calling him a liar. He produced the letter and threatened to broadcast tape recordings of the incident.
The CIA hastily retracted its denial.
Lee said, “The Americans should know the character of the men they are dealing with in Singapore and not get themselves further dragged into calumny. They are not dealing with Ngo Dinh Diem or Syngman Rhee. You do not buy and sell this Government.”