The CIA’s Psychological Warfare Workshop was run by E. Howard Hunt in the 1950s, the spymaster later jailed as one of President Richard Nixon’s Watergate ‘plumbers’. Hunt’s psych ops workshop was buried in the innocently-named Office of Policy Coordination, with a big budget and a wide remit: propaganda, economic warfare, sabotage, and subversion.

During WWII, Hunt served in the Navy, Army Air Corps, and Office of Strategic Services, the precursor to the CIA, in China. He refined his dark arts in Mexico and Guatemala: “The predisposition among Latin American intellectuals and students is a pro-Communist stance - they're good; the United States and democracy are bad. And I thought that we have to do something to change this mindset if we can, otherwise the whole continent is going to turn red.”

Under his leadership, the CIA transformed into America’s ‘Ministry of Culture’, an Orwellian doublethink operation channeling anti-communist messages through blockbuster books and movies like Animal Farm.

The spymaster decided to influence American hearts and minds by making a full-length animated film based on British author George Orwell’s Animal Farm, a political satire where rebel animals seize their farm.
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Animal Farm: the CIA pitch

Animal Farm would be the first feature-length animated film ever made in the UK and a colossal challenge. The CIA and British Foreign Office’s clandestine Information Research Department (IRD) weren’t the only ones interested in acquiring the film rights.

The US Army also wanted to make Animal Farm, as well as the producers of Woody Woodpecker cartoons.

Hunt dispatched Carleton Alsop, an undercover CIA agent at Paramount Studios, and Finis Farr, a Los Angeles writer, to meet Orwell’s widow, Sonia, when the author died in 1950. The men weren’t in England to pay their respects. Their job was to persuade Sonia to sell the rights to Animal Farm.

“This she duly did, having first secured their promise that they would arrange for her to meet her hero Clark Gable,” star of Gone With the Wind, writes Frances Stonor Saunders in Who Paid the Piper?

Hunt then spent $500,000 bankrolling Louis De Rochemont, a US producer who’d worked with the FBI on the anti-Nazi spy movie The House on 92nd Street (1945).

The CIA used hundreds of millions of dollars from the Marshall Plan for European recovery to finance its ‘cultural’ activities, according to Stonor Saunders. In the early years, money was seemingly no object.

''We couldn't spend it all,'' Gilbert Greenway, a former CIA agent, recalled in The Assassinations. ''There were no limits, and nobody had to account for it. It was amazing.''

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The CIA borrows from the KGB psyops playbook

The CIA had taken a leaf from the KGB propaganda playbook, using literary and artistic expression as organs of state policy.

Animal Farm was part of a larger CIA culture war that extended to sponsoring Abstract Expressionist art exhibitions, musical concerts, magazines, and Hollywood movies to push the anti-communist agenda.

De Rochemont chose British animators Halas and Batchelor to design Animal Farm’s memorable characters, possibly because the duo had experience working on British propaganda movies or because De Rochemont questioned the loyalty of some Hollywood artists.

The ending of Orwell’s acclaimed novel would need to be changed to meet the CIA’s objectives. The book ends - [spoiler alerts ahead!] - with the animals and humans indistinguishable as corrupt, evil powers. In the movie, there is no mention of humans. Only the pigs are totally corrupt.
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Animal Farm: a 'vivid and biting animation'

The animated movie was released to acclaim in 1954 with a gala at the UN in New York. Many praised it. The New York Times called it "a vivid and biting animation of Mr. Orwell's popular tale of social revolution and disillusion".
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The British also found Orwell's work useful for propaganda. Britain’s National Archives later revealed that UK spies funded a newspaper comic strip in the early 1950s based on Animal Farm which ran in Brazil, Burma, Eritrea, India, Mexico, Thailand, and Venezuela.
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E. Howard Hunt, the CIA officer who once said he “thought black”, later served 33 months in prison for organizing the bugging of the Democratic Democratic National Committee HQ during the ‘70s Watergate scandal that brought down Richard Nixon’s government. Hunt spent his later years writing spy novels and died at age 88 in 2008, unrepentant to the end. 
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Asked if he had any regrets, Hunt told Slate: “No, none,” before reflecting on the disastrous CIA-backed invasion of Cuba in 1961. “Well, it would have been nice to do Bay of Pigs differently.”