While Rand Corporation specialists pondered whether LSD might be an antidote to political activism, the Hudson Institute, another think tank with strong ties to the intelligence community, kept tabs on shifting trends within the grassroots psychedelic movement. Founded by Herman Kahn, one of America's leading nuclear strategists, the Hudson Institute specialized in classified research on national security issues. Kahn experimented with LSD on repeated occasions during the 1960s, and he visited Millbrook and other psychedelic strongholds on the East Coast. From time to time the rotund futurist (Kahn weighed over three hundred pounds) would stroll along Saint Mark's Place in New York's East Village, observing the flower children and musing on the implications of the acid subculture. At one point he predicted that by the year 2000 there would be an alternative "dropped-out" country within the United States. But Kahn was not overly sympathetic to the psychedelic movement. "He was primarily interested in social control," stated a Hudson Institute consultant who once lectured there on the subiect of LSD.

The psychedelic subculture and its relationship to the New Left and the political upheavals of the 1960s was the subiect of an investigation by Willis Harmon, who currently heads the Futures Department at the Stanford Research Institute (SRI). Located in Palo Alto, California, this prestigious think tank received a number of grants from the US Army to conduct classified research into chemical incapacitants. Harmon made no bones about where he stood with respect to political radicals and the New Left. When Michael Rossman, a veteran of the Berkeley Free Speech Movement, visited SRI headquarters in the early 1970s, Harmon told him, "There's a war going on between your side and mine. And my side is not going to lose."

Harmon was turned on to LSD in the late 1950s by Captain Al Hubbard, the legendary superspy, who took a special interest in his new convert. Harmon considered himself a disciple of the Captain. Hubbard's protege became director of the Educational Policy Research Center at SRI. In October 1968 Harmon invited Hubbard, then living in semiretirement in British Columbia, to join SRI as a part-time "special investigative agent." As Harmon stated in a letter to his acid mentor, "Our investigations of some of the current social movements affecting education indicate that the drug usage prevalent among student members of the New Left is not entirely undesigned. Some of it appears to be present as a deliberate weapon aimed at political change. We are concerned with assessing the significance of this as it impacts on matters of long-range educational policy. In this connection it would be advantageous to have you considered in the capacity of a special investigative agent who might have access to relevant data which is not ordinarily available." Hubbard accepted the offer, and from then on he was officially employed as a security officer for SRI. "His services to us," explained Harmon, "consisted in gathering various sorts of data regarding student unrest, drug abuse, drug use at schools and universities, causes and nature of radical activities, and similar matters, some of a classified nature."